AIB launches €300m healthcare fund

Life sciences and energy | Wed 22 Oct | Author – Business & Finance
Tadhg Daly, Anne Bannon and Ken Burke

AIB today announced it was setting up a €300m healthcare fund to support investment in the healthcare sector.

AIB also published new research which shows that Ireland is now catching up with its European neighbours in terms of its ageing demographic profile. The number of people over 65 is set to increase by around 200,000 over the next seven years bringing the total numbers over 65 to circa 732,000.

Speaking at the launch of the fund, Tanaiste Joan Burton TD, Minister for Social Protection, said: “Looking after our ageing population is a key priority for the government and I welcome the fact that AIB is willing to lend to operators seeking to meet the needs of our older citizens. I also welcome this new research which gives us insight into the care needs of our older citizens.’’

AIB head of Business Banking Ken Burke said: “The future is positive for the long term care sector in Ireland, with the growing demand for places in nursing homes. We are launching the €300m healthcare fund today to support investment across healthcare services and specifically to support funding to nursing home operators who are critical to the provision of care to our ageing population. AIB has dedicated healthcare specialist teams and is actively lending to operators expanding their bed capacity and building new facilities as well as to existing operators requiring refinance of their debt facilities.’’

Tadhg Daly, chief executive of Nursing Homes Ireland, said: “The concerns expressed recently by the Minister for Health and HSE regarding the rise in delayed discharges from hospitals highlight the critical role nursing home care has to play in the delivery of a proper functioning health service. Persons most dependent upon the specialist, continuous care provided in our local communities by nursing homes – those aged 85+ – will grow at a rapid rate to 2021, by 46% according to the CSO.

“We must plan for the full range of healthcare services that are required to ensure our older persons can access appropriate healthcare within their local community in a timely manner. This will remove present overdependence and over-reliance upon use of services within the inappropriate settings that are acute hospitals. This makes logical and economic sense. Our long-standing call for a forum to plan for older population’s healthcare requirements is increasingly imperative.”

The Long Term Care report found the nursing home sector has significant job creation potential with an average of 1.2 staff employed per resident. It is expected that up to10,000 jobs could be created over the next seven years as the research indicates demand for 8,000 new nursing home places by 2021.

New research from Ipsos MRBI on behalf of AIB found that 81% of nursing home operators did not expect the supply of nursing homes beds to meet the predicted future increase in demand. The research, which canvassed the views of all private and voluntary nursing home operators and owners, also found that average occupancy in a nursing home has already reached 95%.

Nursing homes have also seen some significant changes in the profile of their residents over the past three years; according to the survey 47% of all residents have dementia and 70% of operators stated that they have seen an increase in the number of residents with the condition. However, fewer than one in five homes currently has a specialised dementia care unit.

The research found there were important challenges to be overcome if the sector was to reach its full potential. These challenges included uncertainty around government funding for nursing home care, increases in running costs, availability of nursing staff, and high costs of compliance. For example, 82% of operators reported difficulty in recruiting nursing staff, particularly in rural areas.

Operators see the greatest opportunities in extending their existing capacity, developing specialist dementia units and building new nursing homes.