Care-providing institutions in the red after introduction Wmo

23/07/2009 15:00

The introduction of the Social Support Act (Wmo) in 2007 has caused more institutions providing home and elderly care to sustain losses. This applies in particular to institutions providing home help. There was also a major shift from care providers on the payroll of the institutions to home helpers who work for the care recipient.

Nearly one third of care-providing institutions in the red

In 2007, 31 percent of institutions providing home and elderly care sustained losses, far more than in 2006, when 17 percent were in the red. Operating results slumped from 429 million euro in 2006 to 142 million euro in 2007.
Since the introduction of the Wmo in 2007, municipal authorities decide how much help a client will receive, what kind of help, which institution is allowed to provide the help and what the price is. This implies that the free market principle plays a more prominent role compared to the former system, which included home help in the Exceptional Medical Expenses Act (AWBZ).

Operating results of institutions providing home and elderly care, 2006 and 2007

Operating results of institutions providing home and elderly care, 2006 and 2007

Providing domestic help creates losses

The introduction of the free market principle in the care sector implies that care institutions for which providing home help to Wmo clients is a prominent part of their activities more often slip into financial trouble. For more than half of ill-performing institutions in 2007, providing home help constituted more than 5 percent of their total revenues. This proportion is much higher than for institutions which provided little or no home help. Only 20 percent of these institutions were in the red in 2007.

Operating results of institutions providing home and elderly care by share of home care they provide, 2007

Operating results of institutions providing home and elderly care by share of home care they provide, 2007

Shift in work force

Since the introduction of the Wmo, care institutions have carried out a large-scale operation to the effect that staff on the payroll of these institutions were replaced by home helpers, paid by the care recipients. The number of full-time jobs of employees declined by more than 5 percent in 2007. At the same time, the number of staff not paid by the institutions (including home helpers) doubled. Altogether, the number of full-time jobs in the sector home and elderly care remained more or less the same (over 230 thousand).

Full-time jobs in institutions providing home and elderly care, 2006 and 2007

Full-time jobs in institutions providing home and elderly care, 2006 and 2007

No shift to other organisations

The amount paid by municipalities to care institutions for providing home help totalled more than 1 billion euro in 2007. The amount was almost entirely (98 percent) paid to institutions providing home care and care for the elderly. Municipalities barely called in other organisations, like cleaning service companies.

Hilde Keuning and Martin Boon