Ryman Healthcare's $150m plans for Kohimarama. Photo / Ryman Healthcare
Ryman Healthcare's $150m plans for Kohimarama. Photo / Ryman Healthcare
In the midst of an aged care crisis, New Zealand's largest listed retirement business plans to build far smaller geriatric hospitals due to lack of state funding.
Ryman Healthcare, housing 13,200 people aged 75-plus here and in Australia, has drastically cut the number of hospital beds it plans in newvillages due to the economics of providing such care.
The company says it won't build as many hospital beds as it did in the past, cutting numbers by two-thirds in some cases, from about 120 hospital beds to just 40.
This comes at a time when demand for higher levels of care is rising and people needing hospital care need to move directly to a Ryman hospital without having been a village resident previously.
A Berl study for the Aged Care Association found demand for residential care was forecast to increase by an estimated 15,000 beds by 2030, but an unsustainable funding model was threatening access.
"We are still focussed on our continuum of care model for our residents. That commitment has not changed. But we have adjusted the amount of care we are building," the spokesman said.
Ryman is examining how to deliver different care and in Australia, is offering home care which allows residents in villages owned by the business to stay in their homes for longer but with the company's assistance. That means they don't need to shift to hospitals to get better care.
"We will also be trialling this in New Zealand," the spokesman said today.
Ryman's Coberg site in Melbourne. Photo / supplied
With plans for smaller hospitals, the business is calculating it will be able to cater for many residents within its villages, allowing them to move into hospitals on sites if needed.
But smaller hospitals will not always be able to provide beds for those outside Ryman villages, and who are now often shifted to a Ryman hospital when full-time geriatric high-needs care is required.
Many charitable-based rest homes have shut in the last few years.
Ryman held an investor presentation today and posted details of the down-sized hospitals there.
Hospitals with about 120 beds or more were historically developed in new villages but now only 40 beds are planned in new projects.
Before 2015, Ryman villages had average hospital bed numbers of 104 which rose to 112 in villages opened from 2015.
In new sites under construction or where building work has not yet started, average bed numbers are just 73.
A new village in Wellington's Newton will have only 40 beds. At Takapuna, a 45-bed hospital is planned and in Karori, only 60 hospital beds are planned.
Auckland's Edmund Hillary Retirement Village owned by Ryman has 194 hospital beds, its Rowena Jackson village in Invercargill has a 157-bed hospital, its Hilda Ross village in Hamilton has a 151-bed hospital and Christchurch's Anthony Wilding village has 148 beds.
Auckland's Bruce McLaren village has 123 beds in its hospital and Malvina Major has a 120-bed hospital. All these villages were developed before 2015.
New Ryman villages will have much smaller hospitals. Photo / supplied
Ryman didn't say this but retirement villages make most of their money from independent living villas, apartments or townhouses and this income is used to subsidise hospital-level care.
The company's presentation on smaller hospitals was headed "newer sites, smaller care centres". It doesn't refer in corporate documents to hospitals but calls them care centres.
The Herald reported this month on residents and their relatives of a 97-bed 100-staff Auckland Catholic rest home losing $100,000/month are being consulted about possible closure due to a critical staff shortage. That is Mercy Parklands at Ellerslie.
Ryman announced today that it has made other changes. It is now buying in more expensive areas - six of nine new sites in New Zealand have house sale prices above the median.
A chart showed those include Kohimaramara, Takapuna, Christchurch's Park Terrace opposite the Avon, Cambridge and Wellington's Karori.
In Victoria, all seven new Ryman sites are in catchment areas with house sale prices above the state median house price: Ringwood East, Kealba, Coburg North, Mulgrave, Mt Eliza, Essendon and Highett.
Ryman is forecasting generating $6.9 billion of capital proceeds from the 29 sites in its land bank once these projects are fully developed.
Its 32 fully developed villages now contributed $3.6b in capital proceeds, defined as occupancy advances and refundable accommodation deposits.
Shares earlier today were trading around $8.53, down 43 per cent annually.
