CMA investigates care home sector
First published by Admin on August 25, 2017 in the following categories: Latest and tagged with cma
The Competition and Markets Authority (CMA) has recently opened an investigation in the care homes industry over concerns that the industry is breaching consumer laws.
On 13th June 2017, the competition watchdog opened an investigation into several care home providers for two primary reasons:
- There were concerns that care home providers were using contract terms and/or practices that may be breaching consumer laws; and
- There are concerns that the U.K. market for the provision of care home providers isn’t working well for residents over 65, and the industry may not be competing fairly.
Care home industry
The care homes sector is reportedly worth around £15.9 billion a year. In the U.K., the six biggest providers have a combined share of 11% of all care homes and 17% of care home beds.
There are consumer protection concerns that some care homes are charging families for long periods of time after a resident has passed away. There are also concerns surrounding charges and large upfront fees.
Market study
The CMA’s focus in their market study has been to see how well the market is operating and whether their residents are being treated fairly. A case timetable has been set out for an update paper and final report.
The purpose of the market study is to address the following issues:
- Choosing a care home, which may be difficult for the elderly if they don’t have access to information, and what problems may arise if they want to move between care homes
- Regulation of care homes and how local authorities influence the sector
- Competition between care homes
- Consumer protection issues in the industry
Report
The CMA’s update report contains detailed recommendations and suggestions for residents and their families.
Some of the recommendations are as follows:
- Make the choices easier through better access to information and support
- Improving the complaint and redress systems
- Improving consumer protection
- Sharing and monitoring of good practice between organisations
- Investing for the future
The CMA’s concerns
CMA’s acting chief executive, Andrea Coscelli, notes the burning concerns:
“…some of the most vulnerable people in our society use care homes, often moving to them under extremely difficult circumstances. It’s therefore essential they are able to make informed choices, understand how services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have any concerns.”
Residents being well-informed and having a proper choice may be hindered if the care home industry isn’t competitive enough. To ensure fair choice, significant clarity is required for users and their families.
Consumer rights
Care home providers are being assessed in accordance with their compliance or non-compliance of the Consumer Rights Act 2015. The key protection offered by the act is that terms and conditions within the contracts must be fair and transparent. Perhaps where families are made to pay for a care home months after the resident has died may not be seen as a fair term. If the CMA agrees, there could be changes coming to the industry soon.
The CMA also noted that:
“…in any case many are simply not prepared, able or supported in a way that would allow them to make good, well-informed, choices.”