Speech by Mr. Micheál Martin T.D., Minister for Health and Children, at the launch of the Expenditure Review of the Nursing Home Subvention Scheme


I am particularly delighted to be here today to launch the much-anticipated Review of the Nursing Home Subvention Scheme in tandem with the Mercer Study on the Future Financing of Long-Term Care in Ireland.

As you have heard Professor Eamon O´Shea and his colleagues carried out the review and I would like to start by thanking him and his colleagues for giving unstintingly of their time and expertise in carrying it out.

I would also like to thank the members of the Steering Committee which oversaw the study and the officials of the Health Boards and ERHA who shared their vast knowledge of the operation and administration of the Scheme with Prof. O´Shea and his colleagues.

Finally, I wish to thank all the nursing home proprietors who completed questionnaires and provided essential information on the operation of the Scheme from the perspective of the nursing home sector.

Background to Review

This review came about following a Government Decision on 25th March 1997, and in line with commitments made in “Delivering Better Government”, wherein a programme of expenditure reviews was initiated by the Department of Finance. These reviews are a key part of the financial management systems that are central to the Strategic Management Initiative and are intended to ensure greater predictability in resource planning. As part of this process, my Department and the Department of Finance agreed to conduct an expenditure review of the Nursing Home Subvention Scheme.

Mercer´s Report

As I said the review is being launched simultaneously with the Department of Social and Family Affairs´ “Study on the Future Financing of Long-Term Care in Ireland” and it is in this wider context of long-term care that the Review will be considered. It is our hope that both reports will generate public debate about the financing of long-term care and raise awareness of the need to plan for the delivery of services to older people in the future.

Costs of the Scheme

When the Nursing Home Subvention Scheme was introduced in 1993 as part of the Health (Nursing Homes) Act 1990, a sum equivalent to€5m was allocated to cover the cost of the Scheme.

However, due to a range of factors including demographics, increasing demand, increasing dependency, greater availability of private nursing home beds, etc. the cost of the Scheme has risen substantially every year. This has resulted in my Department allocating significant extra funding each year to the Nursing Home Subvention Scheme since its inception.

This year, funding of over €110 million is being made available to the health boards to administer the Scheme. I would now like to draw your attention to an interesting statistic which is, perhaps, worth pondering for a moment. In the first full year of the Nursing Home Subvention Scheme in 1994, a total of 3,271 people were subvented at a cost of €15million. The number of people availing of the scheme today is 8,300 approximately at a cost of €110 million. In other words, the number of people being subvented has more than doubled while the cost of the Scheme has increased by 633%. It is clear from these figures that the increase in the number of people in receipt of subvention has not kept pace with the burgeoning cost of the Scheme and this is one of the reasons why a review of the Scheme was so essential.

Questions Posed/Recommendations

Professor O´Shea´s review raises a number of important issues, one being that the Scheme has biased resource allocation in the direction of residential care rather than community care. It further suggests that shortcomings in community support services for older people and their carers forces people to opt for private nursing home care, thereby maintaining constant pressure on the subvention system.

The review stresses the importance of consistency and standardisation across the health boards in the application of the Regulations. It also argues that some of the Regulations should be clarified and modified, particularly in the areas of means testing and dependency assessment.

The review goes on to suggest that the introduction of co-financing arrangements should be considered and it also highlights the important supporting role that the social economy can play in developing a new and vibrant community care sector.

Community Care

The review questions the justification for the continued public subvention of low and medium dependency residents in either public or private long-stay care, without first of all attempting to care for these people in the community. It also proposes that access to residential care should be curtailed by more stringent and consistent dependency assessment across the country.

It advocates the provision of more publicly-funded beds for older people through the development of new Community Nursing Units. In particular, beds for assessment and rehabilitation should be provided, not only to control admission to long-stay care, but to change the ethos of the care system away from institutional to one of renewal and restoration.

Home Based Subvention

The objective of public policy with respect to the long-term care of older dependent people is to keep them in their own homes for as long as possible in accordance with their wishes.

As outlined in the Health Strategy, it is planned to introduce a home-based subvention, in keeping with one of the recommendations of the review. This will be contingent on the necessary resources being available to my Department and it will be introduced in conjunction with other Government Departments, including the Department of Social and Family Affairs, as part of an integrated approach to the payment for care in the home. The introduction of a home-based subvention is consistent with the policy of successive Governments of maintaining older people in their own homes for as long as they wish.

Of course, this does not mean that nursing home care will no longer be necessary. On the contrary, there will always be a need for nursing homes and we will continue to work in partnership with nursing home owners to provide appropriate care to people, not just older people, but people with a broad range of needs including the young chronic sick.

Private Nursing Home Sector

I think it is important that the State should acknowledge that the private nursing home sector has an important and continuing role to play in the provision of extended care and other services ´’s commitment to continue to work in partnership with this sector.

Review of the Nursing Home Regulations

The launch of this Review also coincides with a formal review of the Nursing Home Subvention Scheme, which will shortly be undertaken by my Department. Some would say why another review when we have the two reports being launched today. The Department´s review will offer us the opportunity to build on Professor O´Shea’s findings and to answer some of the questions posed in his report and in recent reports of the Ombudsman. It will also allow us to move forward in tandem with the Working Group which is to be established following a consultation process on the Mercer Report with all stakeholders and which was promised in the partnership document “Sustaining Progress”.

The first step being undertaken in this regard is to establish a Steering Committee consisting of the various stakeholders, including nursing home owners to oversee the review.

As the process is only beginning I cannot at this point speculate on what may emerge from this exercise but I can say that the review will be comprehensive and will involve all stakeholders. I would encourage contributions from all interested parties to ensure that we can develop a better and more cost-effective service to the clients of this service in a spirit of partnership.

The objective of the Department´s review is to develop a scheme which will be transparent, offer a high standard of care for clients, provide equity within the system to include standardised dependency and means testing, be less discretionary, be legally sound, be consistent in implementation throughout the country and draw on experience of the operation of the old Scheme.


I believe it is imperative, now, that all service planners and service providers use the information gleaned from this review to ensure that the needs and wishes of older people are to the fore in the provision of long-term care.

Once again, I want to thank everyone involved in the preparation of this review of the Nursing Home Subvention Scheme and look forward to a successful outcome to the work which we are now commencing.