Bupa warns of NHS crisis unless care fees increase

Private medical group Bupa yesterday warned that the NHS faces a potential "bed-blocking" crisis, unless fees paid to care home operators rise.

The firm, which cares for some 18,000 UK residents in more than 300 homes, is concerned that the aged care sector will become "seriously underfunded" as a consequence of local authorities reducing the amount they pay.

Care home operator Southern Cross ran into trouble after it said it could no longer pay the rent on its 752 homes as revenues came under pressure due to falling levels of occupancy and fees.

Bupa, which said it had been approached but decided not to get involved in the restructuring of the Southern Cross estate, added that it expected a further contraction of the care homes market unless "fairer fees" are agreed.

It warned this could mean more closures and a potential bed-blocking crisis for the NHS.

Chief executive Ray King said a minimum for the industry must be fee rises linked to the underlying rate of inflation.

The group, which is a provident company with no shareholders, said its care services division lifted revenues by 1 per cent to 589 million and profits by 2 per cent to 67.7m in the half year to June.

Profits overall showed a sharp improvement, jumping from 162.1m to 244.1m following good growth in Australia, Asia and its expatriate health insurance business.