Orpea’s reaction following the final report of the joint IGAS-IGF survey


PUTEAUX, France–(BUSINESS WIRE)–Regulatory news:

Orpea (Paris:ORP) takes note of the announcement by Ms Brigitte Bourguignon, Minister Delegate to the Minister of Solidarity and Health, in charge of Autonomy, of her decision to send the report of the mission to the public prosecutor control carried out by the General Inspectorate of Social Affairs (IGAS) and General Inspectorate of Finance (IGF)1. This decision will allow us to explain ourselves in all serenity, to defend our rights and of course to collaborate with justice whenever necessary.

We regret that the report of the inspection mission, as well as the 177 pages (excluding supporting documents) of very detailed answers that we provided, have not been made public or made available to all stakeholders. The only elements disclosed are a preliminary report presented in a damning way for Orpea and which does not take into account our answers.

Indeed, if the final report which was sent to us on the night of March 25 to 26, 2022 sheds light on certain dysfunctions, it makes it possible to conclude that there is no organized “system” which would lead to generalized abuses. and also denies several particularly serious allegations made against us in the book The gravediggers.

Philippe Charrier, Chairman and CEO of Orpea, said:

“We have taken full measure of the legitimate emotion aroused by these dysfunctions, many of which stem from the shortage of care and support professionals which affects us like the entire nursing home sector.

We deeply regret them. We would like to renew our most sincere apologies to the residents and their families. We take all the necessary steps to implement the actions relating to all the elements provided by the IGF-IGAS report. We will also implement without undue delay the recommendations made following all the reports awaited.

The case being referred to justice, we cannot go into the merits of all the questions on which we are challenged. At this point, however, we would like to make the following clarifications:

1. The administrative investigation has enabled us to identify areas for improvement and we are already committed to the following corrective actions:

  • We are going to change our organization to give more autonomy and resources to our facility managers, who are the lifeblood of the Group.
  • We must ensure the systematic implementation of the medical projects and quality processes of our establishmentswhich are not always applied consistently across our facilities.
  • We need to be more open to our stakeholders. We will achieve this by appointing family mediators, bringing ethics committees closer to the field, improving our operations and promoting our alert system.
  • We will develop our reporting procedure significant adverse events and educate our teams on the subject in order to shorten reporting times.
  • We will work on simplifying quality processes in order to allow a better appropriation by the teams on the ground.
  • We will act with more vigor and determination on the problem of chronic shortage of personnel which affects the whole of the sector and for this we will improve the attractiveness of Orpea as an employer and the retention of our employeeseven if our turnover rate is at the same level as that of all EHPADs in France.
  • We will improve labor relations and attention to the exercise of trade union rights by negotiating agreements with all the trade unions present in the company.

2. The inspections report supports the conclusion that there is no organized “system” that would lead to widespread mistreatment and clearly denies some of the most shocking allegations contained in the book The gravediggers

  • Concerning an alleged rationing of incontinence productsinvestigation “identified no major anomalies in the supply of incontinence products” and declares that “recent feedback from the Regional Health Agencies does not mention an organized system for rationing incontinence products“.
  • Report dismisses charge of lack of pressure ulcer care and note that “monitoring of pressure points on the skin and prevention of bedsores is not a critical point“. The survey considers that the percentage of residents with one or more pressure ulcer dressings (3.42%)”does not seem excessive“.
  • The number of coordinating physicians in Orpea’s EHPADs is well above the sector average: they are present in 82% of our establishments compared to 67% in the sector as a whole2.

3. Certain complaints in the report call for comments from ORPEA

A. Regarding quality and care

  • Orpea denies that the staffing rate within its establishments is lower than the sector average. Between 2017 and 2021, the staffing rate calculated by Orpea for reception, dependency and accommodation staff has steadily increased, rising from 0.621 to 0.704. Moreover, the staffing ratio alone cannot define the quality of care. At a minimum, it must be corrected for factors likely to explain the variation between the establishments (degree of dependence and pathology of the residents, number of beds, age of the housing stock and functional nature of the accommodation)3.

    The nutritional policy put in place by Orpea meets all the protein and energy needs of residents and complies with national standards established by handles4”, and by HAS5. The IGAS survey carried out its nutritional balance using a kg ordering tool, whereas it is the nutritional protein and energy intakes that count6. The meal plan drawn up by the medical service, the nutrition manager and the catering service of Orpea, over periods of five weeks, aims to ensure a balanced diet. It ensures that all nutrient intakes are guaranteed and fully in line with official recommendations for protein, calories, fats and carbohydrates.

    The average weekly energy intake of Orpea menus is between 2,037 kcal/day and 2,147 kcal/day compared to the recommendations of 1,950 kcal/day to 2,275 kcal/day. The nutrition policy also includes monthly weight monitoring and albumin and BMI checks if necessary.

  • The Group has incorporated a dental protocol into the care plan, with an assessment by the coordinating doctor during the Standardized Geriatric Assessment carried out on admission and then once a year.

B Regarding the use of public funds

Orpea formally denies the existence of a system aimed at optimizing the use of public funds:

  • The surpluses observed at the establishment level over the 2017-2020 period, concentrated in 2019 and 2020, are explained by the combination of:

    – The tariff convergence policy which, by inducing an additional allocation to private establishments, generated budget surpluses not anticipated by the establishments. Each year, as these allocations are only validated in the middle of the year, the directors do not use them during the first part of the year.

    – And the health crisis which, having led to reductions in both the number of residents admitted to EHPADs and the number of caregivers available during this period, resulted in actual expenditure lower than forecast.

  • Faced with this lack of caregivers, and in order to continue to provide the best possible support to residents, the establishments have called on carers to take on the role of caregivers, a common practice in the sector.7. We have therefore used the care share of public funds for staff costs corresponding to the increase in care needs.

  • All of these expenses have always been declared in a transparent and clearly identifiable manner to the Regional Health Agencies in charge of monitoring the establishments concerned.

  • The surplus of 20 million euros generated mechanically over this period led to the recording of a charge aimed at neutralizing the positive impact in the Group’s accounts..
  • Well below the amount suggested by the authors of the inspection report, 4.6 million euros could come from non-compliant levies on public subsidies for care and dependency, i.e. the equivalent of 0.3% of the allocations received between 2017 and 2020.

The inspections consider that the services are imprecisely described in the contracts or inherent in the contractual service. In our view, this assessment is questionable.

This being so, in order to avoid any difficulties in the future, ORPEA has decided to exclude the amount of orders for products in the care and dependency sector from the basis for calculating the fees due for services. No more royalties will therefore be calculated and collected on the basis of the amount of products financed by public funds.

In line with its previous commitment, the company will report on the results of independent external reviews commissioned by the Board and, in May 2022, on its transformation plan to better serve residents and their families.

About ORPEA (www.orpea-corp.com)

Founded in 1989, ORPEA is one of the world leaders in dependency care (EHPAD, EHPAD, Aftercare and Rehabilitation Hospitals, Mental Health Hospitals, Home Services)

ORPEA is listed on Euronext Paris (ISIN code: FR0000184798) and is part of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and CAC Mid 60 indices.

1 IGF: General Inspection of Finance and IGAS: General Inspection of Social Affairs General Inspection of Social Affairs

2 Medical care for the elderly in nursing homes – Court of Auditors (French Court of Auditors) February 2022

3 DREES FILES no. 68 • December 2020 — The ratio of supervision in nursing homes: its determinants and its alternatives

4 Abbreviation for: National Food Safety Agency, i.e. National Food Safety Agency

5 Abbreviation for: High Authority for Health

6 See latest report from the Haut Conseil de la Santé Publique (May 18, 2021, updated on August 24, 2021)

7 Medical care for the elderly in nursing homes – Court of Auditors February 2022


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