More than half (51%) of Irish nursing homes did not report a profit last year, according to a survey by BDO Ireland, which was conducted for representative body Nursing Homes Ireland.
The survey found that 34 homes had closed in the past two years, with just 17 new homes opening.
It noted that the worst hit region for closures across all sectors was the West (Galway/Mayo/Roscommon), where eight nursing homes closed and just one opening.
The report is based on 2023 financial data and is the first produced on the sector in two years.
It reveals that while there was a 1.6% increase in total registered beds, with public, private, and voluntary sectors contributing to a total of 32,239 beds, financial pressures are threatening the sustainability of many homes, especially smaller ones and homes in more rural areas.
The report also found there is about a €640 per bed disparity between the average public rate and private rate across the country, as of November 2024.
Taking the average sized (60-bed) home, this suggests a public home receives on average about €2m in additional revenues via the Nursing Home Support Scheme above that received by private / voluntary operators.
Today's report also shows that the country's average Fair Deal rate as of November 2024 was €1,207 - a 14.2% increase since May 2022.
Fair Deal funding accounted for 69% of nursing home income, with the rest coming from private payers and other sources such as contract and complex care.
But rates varied significantly across counties, with Dublin recording the highest at €1,335 and Donegal the lowest at €1,125.
The disparity here across an average size nursing home of 60 beds amounts sees Dublin nursing homes receive €655,000 a year more than their Donegal equivalent. Westmeath saw the steepest rise in Fair Deal rates since the last report, up 18.1%, while Dublin experienced the smallest increase at 8.1%.
The survey also shows that 82% of residents were over the age of 76, with the majority falling within the 76-85 (37.4%) and 86-90 (24.3%) age brackets.
The CEO of Nursing Homes Ireland, Tadhg Daly, said the report underscores the financial realities faced by the sector with the sector seeing an increased number of nursing home closures in 2023, highlighting the critical need for fair and sustainable funding.
"To ensure the future of nursing home care, the Government must publish the long-awaited Fair Deal pricing review within its first 100 days and implement reforms that align Fair Deal rates with the true cost of care," he said.
"Without these changes, the viability of local nursing homes is at risk The Fair Deal pricing, in its current form, is simply not fit for purpose, and without urgent reform, we will continue to see nursing home closure that will have a profound impact on older people, families and healthcare services," he added.
Brian McEnery, Managing Partner at BDO Ireland, said the nursing home sector is under immense strain due to rising costs, inadequate funding, and reduced construction activity.
"Urgent measures are needed to safeguard the future of nursing home care in Ireland. This report highlights the critical challenges facing Ireland's nursing home sector and the urgent need for policy reforms to secure the future of high-quality, person-centred care," he added.
