12K aged care bed shortage warning
WELLINGTON: Major risks to the future of New Zealand’s aged care sector have been highlighted in a report released by Health New Zealand Te Whatu Ora (HNZ).
The report was the first major output of a review into funding and service models for aged care services, which HNZ began in July last year, and included feedback from key stakeholders.
The review’s second phase has begun and is focused on developing recommendations for the sector.
The analysis found if historic building rates continued, there could be a shortage of almost 12,000 aged residential care (ARC) beds by 2032.
It showed there was a variety of levels of service in different areas of the country.
For example, the waiting times for high priority individuals being admitted to an ARC facility ranged from 92 days in MidCentral (Manawatu¯ area) to 219 days on the West Coast.
Highneed dementia and psychogeriatric care residents were waiting, on average, nearly six months to be admitted to an ARC facility after being assessed as high priority for moving out of a home setting.
The review said with an ageing population, its expected demand for these care beds will increase — with the sector’s lack of beds and staffing for these people causing significant issues.
HNZ ageing well director Andy Inder said it was vital they fully understood the challenges faced by older people and their wha¯nau across the sector and work together on solutions.
The report identified five pressing issues where policy and service delivery reform were required.
The review found the funding models for ARC and home and community support services (HCSS) was not fit for purpose.
The aged residential care model relied too heavily on a broadbased average price to incentivise providers to proactively manage residents’ needs.
It said new contracting and funding arrangements may be necessary alongside a more sophisticated funding model to address pressing issues in the sector.
In the HCSS sector, it said the funding model for providers’ travel costs needed urgent reform due to it being an uncapped liability for the government which had seen costs increase by 68% since July 2018.
The report stated there was clear evidence the sector was underfunded with providers building smaller care centres, facilities closing and a shift to providers taking more revenue from residents through ‘‘premium beds’’ and occupational rights agreements (which set out a person’s right to occupy a property for retirement).
It stated a substantial increase in the price paid by Health New Zealand for services in ARC facilities was needed to incentivise large scale new investments.
The review found Ma¯ori, Pacific and Asian population were much less likely to be admitted to an ARC facility than NZ Europeans — with Ma¯ori and Pacific populations more likely to receive inhome care and support.
The average cost HNZ would spend on a subsidised client in a resthome was $65,000 a year whereas they would spend about $7400 per year on someone receiving inhome care and support.
The report found a case could be made for a more equitable funding arrangement that would involve a significant increase in HCSS expenditure.
The report noted that workforce issues were longstanding for the aged care sector which have been exacerbated by the 2023 pay settlement for HNZ nurses. It widened the pay difference between HCSS and ARC nurses and those in publicly funded hospital roles.
It was out of the review’s scope to examine pay disparities, but the report said it understood HNZ was aware of the issue and examining it further.
The report addressed that many issues facing aged care services were heightened in lowerpopulated areas of the country due to financial and scale performances.
The paper outlined that current funding models may not be appropriate for aged residential care and home and community support services.