Evidence on costs associated with NHS-funded nursing care in 2021 to 2022
Published 11 July 2022
Applies to England
© Crown copyright 2022
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Introduction
In November 2021, the Department of Health and Social Care (DHSC) disseminated a cost collection survey to gather evidence on the cost to care homes of providing NHS-funded nursing care (FNC) in 2021 to 2022. The evidence gathered was used to inform the setting of the 2022 to 2023 FNC rate as well as retrospective payments to reflect additional costs associated with COVID-19 in 2021 to 2022.
This paper sets out the approach to data collection and analysis and provides a breakdown of the costs to care homes of providing FNC in May and October 2021.
Methodology
Scope of cost collection exercise
The NHS FNC rate is the contribution provided by the NHS to care homes with nursing to support the provision of nursing care by a registered nurse.
As set out in the 2017 Supreme Court judgment (R v Cardiff and Vale University Health Board), ‘nursing care by a registered nurse’ covers:
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time spent on nursing care, in the sense of care which can only be provided by a registered nurse, including both direct and indirect nursing time (for example, management of medicines, overall care planning and hygiene standards)
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paid breaks
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time receiving supervision
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standby time
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time spent on providing, planning, supervising or delegating the provision of other types of care which in all the circumstances ought to be provided by a registered nurse because they are ancillary to or closely connected with or part and parcel of the nursing care which they have to provide
Further information on FNC is available in the National framework for NHS continuing healthcare and NHS-funded nursing care and NHS-funded nursing care practice guidance.
Research approach
The cost collection exercise sought data on the below costs:
- gross registered nurse pay, including any additional allowances, bonuses, incentives, introduction payments, overtime, holiday, sickness and maternity pay, backfill for holidays, sickness absence and training, relocation, redundancy and compromise agreement payments and any under or over payments applied in the period
- on-costs, including employers’ National Insurance and employers’ pension contributions and any other relevant payroll on-costs relating to registered nurses
The cost collection exercise did not seek data on costs that are not considered relevant to the definition of ‘nursing care by a registered nurse’, including:
- non-pay training costs
- nursing equipment, including personal protective equipment (PPE)
- recruitment expenses and professional nurse registration fees
Data collection
The department issued the cost collection survey to over 2,500 nursing providers across England in November 2021. Information on the research was also shared through sector newsletters and networks. The survey was issued as an Excel spreadsheet which providers could fill in and return to the department between 29 November 2021 and 17 January 2022.
The survey was designed with the help of feedback from care home providers and sector stakeholders, and asked respondents to submit the following information:
- name and Care Quality Commission (CQC) ID
- funding classification of current residents
- payroll costs for May 2021 and October 2021 for employed registered nurses, agency registered nurses, managers (where they are registered nurses) and supernumerary staff (where they are registered nurses)
- payroll hours for the above staff types for a recent period of time
- estimates of the proportion of manager and supernumerary staff time spent on nursing tasks
- details of any additional costs providers wished to report
Data was collected for May and October 2021 to reflect changes in costs throughout the year.
Response
The department received 1,002 responses, and 892 were used in the final analysis following validation checks.
Responses which did not pass the following validation checks were deemed invalid and removed before analysis because:
- all data requested for set time dates, such as May and October 2021, should cover the set time periods.
- dates covered should be entered in a logical order
- information about registered nursing payroll costs should be entered
- responses for non-nursing providers (that is, residential homes) were not required for this exercise
The tables below show the breakdown of valid responses by operator size and region.
Table 1: nursing home responses in the respondent sample and the total number of nursing homes in England, broken down by operator size
| Percentage of survey responses | Percentage of nursing homes in England | Number of survey responses | Number of nursing homes in England | |
|---|---|---|---|---|
| Large corporate (40 or more nursing homes) | 67% | 19% | 594 | 813 |
| Medium group (10 to 39 nursing homes) | 12% | 19% | 108 | 848 |
| Small group or independent (fewer than 10 nursing homes) | 21% | 62% | 190 | 2,700 |
| All operator categories | 100% | 100% | 892 | 4,361 |
Table 2: nursing home responses in the respondent sample and the total number of nursing homes in England, broken down by region
| Percentage of survey responses | Percentage of nursing homes in England | Number of survey responses | Number of nursing homes in England | |
|---|---|---|---|---|
| North | 31% | 30% | 278 | 1,307 |
| Midlands and East | 29% | 29% | 261 | 1,280 |
| South | 29% | 32% | 255 | 1,410 |
| Greater London | 11% | 8% | 98 | 364 |
| All regions | 100% | 100% | 892 | 4,361 |
Analysis
To calculate the cost to nursing homes of providing FNC in May 2021 and October 2021 (per FNC-eligible resident per week), the following equation was used:
The ‘total registered nurse costs’ divided by the ‘number of residents with nursing needs’. The outcome is then multiplied by the ‘FNC weighting factor’.
The terms in this equation were calculated as follows:
- total registered nurse costs: the total payroll costs for the relevant staff type[footnote 1] in the reference period, normalised to one week. For registered managers and supernumerary staff (employed or agency), this figure is adjusted to reflect the fact that not all time for these roles will be spent delivering registered nursing care. The cost collection exercise asked respondents to estimate the proportion of time registered managers and supernumerary staff spent on registered nursing tasks
- for registered managers, the average proportion given was 17%. The costs used in the equation were adjusted accordingly
- for supernumerary staff, only 4% of respondents answered this question. Data on supernumerary staff time has therefore been excluded from our final calculation due to insufficient evidence. In previous research conducted by LaingBuisson in 2018 to 2019, these costs were found to be small and were considered negligible in the overall rate
- number of residents with nursing needs: the number of residents with nursing needs in the reference week submitted by the survey respondent
- FNC weighting factor: not all registered nursing tasks are eligible to be counted towards the FNC rate. The per-resident cost of providing nursing care therefore needs to be adjusted to reach the cost of providing FNC per FNC-eligible resident per week
This adjustment was made using an ‘FNC weighting factor’ of 0.85 determined by the 2018 to 2019 LaingBuisson report. Given burdens on providers during December 2021 and January 2022, and the complexity of collecting accurate time and activity data, it was not appropriate to collect new data on nurse activity. Therefore, we have made the assumption that while the overall amount of time needed to deliver FNC may have changed since 2018 to 2019, the proportion of time (relative to other nursing tasks) has remained the same
Cost of providing FNC in May and October 2021 (unweighted)
The equation above was used to calculate the costs of providing FNC (per FNC-eligible resident per week) for each staff type in each operator type, with extreme outliers removed using the Tukey method.
Table 3: qualifying registered nurse unweighted costs per NHS FNC-eligible resident per week May 2021 (£)
| Validated records | Employed registered nurse costs | Agency registered nurse costs | Registered manager costs | Supernumerary staff costs | |
|---|---|---|---|---|---|
| Large corporate (40 or more nursing homes) | 594 | £214.61 | £35.56 | £9.02 | Not applicable |
| Medium group (10 to 39 nursing homes) | 108 | £185.11 | £19.60 | £3.98 | Not applicable |
| Small group or independent (fewer than 10 nursing homes) | 190 | £144.82 | £18.60 | £4.66 | Not applicable |
| All operator scales (unweighted) | 892 | £196.17 | £30.01 | £7.48 | Not applicable |
Table 4: qualifying registered nurse unweighted costs per NHS FNC-eligible resident per week October 2021 (£)
| Validated records | Employed registered nurse costs | Agency registered nurse costs | Registered manager costs | Supernumerary staff costs | |
|---|---|---|---|---|---|
| Large corporate (40 or more nursing homes) | 594 | £223.15 | £50.61 | £8.58 | Not applicable |
| Medium group (10 to 39 nursing homes) | 108 | £181.36 | £31.44 | £4.80 | Not applicable |
| Small group or independent (fewer than 10 nursing homes) | 190 | £149.49 | £21.19 | £4.58 | Not applicable |
| All operator scales (unweighted) | 892 | £202.40 | £42.02 | £7.27 | Not applicable |
Results
The raw costs above were weighted to account for variation across operator sizes and summed to give the total cost to nursing homes of providing FNC.
Table 5: qualifying registered nurse costs per NHS FNC-eligible resident per week in May 2021, shown by bed capacity for each operator size
| Total registered nurse costs £ pw | Total nursing home bed capacity England | Bed capacity weighting factor | |
|---|---|---|---|
| Large corporate (40 or more nursing homes) | £259.18 | 53,292 | 24% |
| Medium group (10 to 39 nursing homes) | £208.69 | 47,076 | 21% |
| Small group or independent (fewer than 10 nursing homes) | £168.07 | 124,327 | 55% |
| All (weighted by total English bed capacity for each operator scale) | £198.19 | 224, 695 | 100% |
Table 6: qualifying registered nurse costs per NHS FNC-eligible resident per week in October 2021, shown by bed capacity for each operator size
| Total registered nurse costs £ pw | Total nursing home bed capacity England | Bed capacity weighting factor | |
|---|---|---|---|
| Large corporate (40 or more nursing homes) | £282.34 | 53,292 | 24% |
| Medium group (10 to 39 nursing homes) | £217.59 | 47,076 | 21% |
| Small group or independent (fewer than 10 nursing homes) | £175.26 | 124,327 | 55% |
| All (weighted by total English bed capacity for each operator scale) | £209.53 | 224,695 | 100% |
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Respondents were asked to provide payroll data for employed registered nurses, agency registered nurses, employed registered managers, agency registered managers, employed supernumerary staff (who are registered nurses) and agency supernumerary staff (who are registered nurses). ↩