Average charges for residents of public nursing homes were 62 per cent higher than private alternatives, a watchdog in Ireland said.
A difference amounting to more than €500 a week in 2018 was attributed to better pay and conditions and higher staff to resident ratios, the HSE said.
Rates for public nursing homes were based on prior-period operating costs and bed occupancy levels, whereas those for private nursing homes were agreed by negotiation.
Comptroller and auditor general Seamus McCarthy published a report which said: “Over the period 2010 to 2018, the average weekly charge rate in public nursing homes was consistently higher than the average weekly charge rate for private and voluntary nursing homes.”
In 2018, the average for public nursing homes was €1,564 per week.
The agreed average maximum price chargeable for private or voluntary homes was €968 per week.
The HSE has attributed the difference to better pay and conditions for staff in public nursing homes, including the implementation of national pay awards.
It also pointed to the higher proportion of maximum dependency residents and greater costs associated with older buildings used as nursing homes, which typically were not purpose built for long-term residential care.
The audit office said: “Some public nursing homes located in rural or isolated areas may not be commercially viable.
“However, the HSE has not undertaken formal analysis of these cost drivers.”
A report from the auditor surrounding the operation of the Nursing Homes Support Scheme, known as Fair Deal, was published on Monday.
It was established in 2009 to provide financial support to residents towards the cost of care and is administered by the HSE.
Budgets were allocated to public nursing homes based on the calculated weekly charge rate.
Funding deficits may arise for homes where the occupancy rate is less than expected or if current operating costs are higher than the prior period costs.
For 2018, additional funding of €23 million was required from other Exchequer resources to meet such deficits.
The Minister for Health has appointed the National Treatment Purchase Fund (NTPF) to negotiate with individual private and voluntary nursing homes the weekly charge rates to be applied to their Fair Deal residents.
The audit office found a lack of documented guidelines to support NTPF staff involved in those negotiations.
It said: “It was also unclear how criteria set by the NTPF influence the negotiation process and the charge rates arrived at.
“A review of the price negotiation system commissioned by the Department has been completed but has not yet been published.”