Evidence on costs associated with NHS-funded nursing care in 2021 to 2022

Introduction

In November 2021, a cost collection survey was sent out by the Department of Health and Social Care (“DHSC”) to gather evidence in relation to the cost to care homes of providing NHS-funded nursing care (“FNC”) in 2021 to 2022. The subsequent evidence was used to inform the retrospective payments to reflect additional costs associated with COVID-19 as well as the setting of the 2022 to 2023 FNC rate.

NHS-funded Nursing Care

The  NHS FNC rate is the contribution provided by the NHS to care homes with nursing to support the provision of nursing care by a registered nurse.

When assessing the cost of FNC, the DHSC sought data on the below costs:

  • Gross registered nurse pay, including any additional allowances, bonuses, incentives, introduction payments, overtime, holiday, sickness and maternity pay
  • Backfill for holidays, sickness absence and training, relocation, redundancy
  • Compromise agreement payments and any under or over payments applied in the period
  • On-costs, including employers’ National Insurance and employers’ pension contributions and any other relevant payroll on-costs relating to registered nurses

They did not seek data on costs that are not considered relevant to the definition of ‘nursing care by a registered nurse’, including:

  • Non-pay training costs
  • Nursing equipment, including personal protective equipment (PPE)
  • Recruitment expenses and professional nurse registration fees

Data Collection

The department issued the cost collection survey as an Excel spreadsheet to 2,500 nursing providers in November 2021 and asked respondents to submit the following information:

  • Name and Care Quality Commission (CQC) ID
  • Funding classification of current residents
  • Payroll costs for May 2021 and October 2021 for employed registered nurses, agency registered nurses, managers (where they are registered nurses) and supernumerary staff (where they are registered nurses)
  • Payroll hours for the above staff types for a recent period of time
  • Estimates of the proportion of manager and supernumerary staff time spent on nursing tasks
  • Details of any additional costs providers wished to report

There were 1,002 responses and 892 were used by the DHSC.

Analysis

To calculate the cost to nursing homes of providing FNC in May 2021 and October 2021 (per FNC-eligible resident per week), the following equation was used:

  • The ‘total registered nurse costs’ divided by the ‘number of residents with nursing needs’. The outcome is then multiplied by the ‘FNC weighting factor’.
  • Total registered nurse costs: the total payroll costs for the relevant staff type in the reference period, normalised to one week.
  • Number of residents with nursing needs: the number of residents with nursing needs in the reference week submitted by the survey respondent.
  • FNC weighting factor: not all registered nursing tasks are eligible to be counted towards the FNC rate. The per-resident cost of providing nursing care was adjusted to reach the cost of providing FNC per eligible resident.

This adjustment was made using an ‘FNC weighting factor’ of 0.85 determined by the 2018 to 2019 “LaingBuisson report.”

Results

The above equation was used to calculate FNC costs for each staff type in each operator type. Qualifying registered nurse unweighted costs per NHS FNC-eligible resident per week in May and October 2021 based on all operator scales:

Validated records

  • May: 892 | October: 892

Employed registered Nurses cost

  • May: £196.17 | October: £202.40

Agency registered Nurse cost

  • May: £30.01 | October: £42.02

The above war costs were weights to account for variation across operator sizes. Below is the qualifying registered nurse costs per NHS FNC-eligible resident per week for all operator scales in May 2021:

Total registered nurse cost £ per week

  • May: £198.19 | October: £209.53

Total nursing home bed capacity

  • May: 224,695 | October 224, 695

For FNC costs that are more specific to operator size visit this link: https://www.gov.uk/government/publications/evidence-on-costs-associated-with-nhs-funded-nursing-care-2021-to-2022/evidence-on-costs-associated-with-nhs-funded-nursing-care-in-2021-to-2022#results

Following the evaluation of this evidence, the standard weekly rates paid to care homes for NHS-funded nursing care was increased by 11.5% in England. Care sector leaders have commended the government for recognising the rising costs experienced by care providers.

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