At a time when lots of Care Home companies are on the verge of collapse and many homes have already closed, one company is moving in the opposite direction. HC- One is company that grew out of the ashes of Southern Cross. (You can see my posts on the Southern Cross storey by clicking on it in the Tag Cloud)
HC-One was set up by Chi Patel, a doctor who moved into merchant banking. Not an obvious career path, but one which led him to later switch to developing and managing nursing and residential care homes. Now his most recent incarnation has bid to takeover BUPA’s clutch of former Southern Cross homes, at a reported cost of up to £450 million for 150 homes. This will make HC-One the largest residential care provider in the U.K. with 22,000 beds.
This, in a market full of gloom. Squeezed Local Authority funding for Social Services, a jump in staff wages on the way and a vendor in BUPA that has reached the opposite conclusion about its Care Homes. Generally thought to be ” low quality”, they have been trying to sell them for more than a year.
So is Chi Patel a fool or just foolhardy ?
Well he has made himself a fortune out of running Care Homes, so I don’t think he is a fool. But he is taking a big risk, probably with other people’s money.
The things in his favour are :-
- the demographics of the older population and their increasing frailty won’t go away;
- NHS hospitals are being swamped with older people who can’t be discharged;
- later stage dementia cannot easily be coped with at home, but neither is hospitalisation a solution;
- capital funding should be able to be secured against the homes, at relatively low rates compared to the past;
- many residents will have homes that can be eventually used to fund their care, which would suit future Governments.
He is betting on older people’s lives, but I wouldn’t bet against him. In the aftermath of the Southern Cross demise there were many lessons learned :-
- the Regulaters can precipitate a collapse, but they can’t prevent it;
- lenders have no easy exit routes, once they are in, they are in for the long haul;
- the residents may be in for a bumpy ride if things start to fail, but they are also locked in, probably literally.
Even though I don’t favour Care Homes as answer, at least he is trying to do something.