Concerns over new nursing home model

SINGAPORE - A new financing model which has the Government bearing the cost of building most of Singapore's new nursing homes has left some operators concerned about the operating lease period.

Under the new Build-Own-Lease model, the Health Ministry will bear the cost of building the facilities, and develop and own the nursing homes. The operating rights are then tendered out to interested nursing home service providers.

The licence to operate each facility is for around two years.

Whether it is renewed dependson how well the operatordoes "in terms of quality of care, service delivery and their compliance to licensing requirements", said a spokesman for the Ministry of Health (MOH).

Some nursing home providers said the two-year period is too short, given the significant investments they have to make in staffing, training, marketing and equipment that does not come with the nursing home when built.

Time is also needed for staff and patients to get used to each other, said Mr Jonathan Koh, chief executive of The Lentor Residence nursing home.

Nursing home operators suggested extending the licensing period.

A spokesman for Econ Healthcare Group said if the operator is doing a good job, the Government could consider extending it to a 30-year term.

"That way, the operator, knowing the certainty of the lease, can focus on future investments and managing the nursing home," she said.

The MOH spokesman said the two-year operating lease is in line with the ministry's usual two-year licensing period for nursing homes. She added that as the Build-Own-Lease model is still new, a review of its mechanics will be done in due course.

Econ Medicare Centre at Yio Chu Kang is the first nursing home developed under the Build-Own-Lease model.

Seven more are now in the building and design stages.

The majority of the 10 upcoming nursing homes announced recently will be developed this way.

Previously, the Health Ministry provided grants to help voluntary welfare organisations fund the building of nursing homes.

The Government also tendered out land for nursing homes.

Despite some concerns, the nursing home operators felt the new model was, overall, much better.

They also said they would have less autonomy over the physical design of the facilities, but this could be overcome if both sides communicated with each other from the start.

Mr Dennis Tan, chief executive officer of Ling Kwang Home for Senior Citizens, said this was an excellent solution as funding is always a challenge in developing one's own facilities.

This system would also keep operators on their toes, said Ms Loh Shu Ching, chief executive of Ren Ci Hospital, which will have its latest nursing home at Bukit Batok built under this new scheme.

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