Charging rest home residents extra if their room has features like garden access is a big earner for facilities, but there have been concerns over how much information people have about "premium" room costs. Nicholas Jones reports.
Rest homes will give greater transparency about controversial charges for so-called "premium" rooms after action from district health boards.
Charges for the premium rooms can range from an extra $50 to hundreds of dollars more each week, for features such as an en suite or garden access.
The fees are negotiated between the home and resident. Such charging is a growing revenue stream, but there are concerns about how much information people have about pricing.
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DHBs recently offered the sector a funding increase - but only if owners agreed to provide more transparency over premium room charges. Such a change would likely provide residents and families a place to look up what other people at the facility are paying for a premium room, and how much extra such rooms cost elsewhere.
Southern DHB chief executive Chris Fleming, who is the lead DHB chief executive for health of older people, said an update of the aged care contract took effect from July 1, and included a 3.2 per cent funding increase. DHBs and providers agreed to work on publishing more information on premium room charges.
"We would not be looking to have premium charges published that relate to services that can be turned on/off easily - such as TV subscriptions or newspaper delivery, but we would be looking to publish the premium bed rate that applies across a facility. The detail will be worked through with provider representatives including whether that would be an average price or median price.
"The intent is to have this agreed and ready to be implemented by 1 July 2020. People needing to access aged residential care services would ideally have one source of information in respect to facilities' premium charge rates."
Simon Wallace, chief executive of the NZ Aged Care Association, which represents providers accounting for more than 90 per cent of the sector and about 36,000 beds, said people's expectations had increased over time, and families often wanted a larger room for their relative and an ensuite.
"Rest homes are only funded by the Government for a standard 11 square metre room with shared facilities. Ultimately, providers are giving the people the choices they want. What is important is that people have options."
Wallace said most of the association's members had some premium rooms, and these had higher occupancy rates overall than rest homes that didn't offer the option.
Transparency already exists and room prices are disclosed to residents and families at the time of viewing and before a room is confirmed. The providers must clearly set out an accommodation supplement in an admission agreement with the family.
"The NZACA has already confirmed its commitment to engage with DHBs on this issue to so that information provided is helpful to consumers and we will work through this over the next few months."
Consumer NZ head of research Jessica Wilson previously told the Herald the organisation had concerns about premium rooms being misrepresented, including the false impression they provide a higher level of care.
"Among the problems raised with us is that rest homes may promote premium rooms as the best or only option available, without telling consumers about the conditions regarding charging for these rooms."
If a facility has no standard rooms available it can require a new resident to pay for a premium room only if occupancy is 90 per cent or higher, and it has found a provider within 10km that has a standard room available. Those rules still cover facilities that only have premium rooms.
Last year the Herald reported on the case of Ruth Schumann, who was refunded after an aged care facility unlawfully charged for her husband's premium room.
More than 34,000 New Zealanders live in aged care facilities, a number projected to reach 58,000 by 2030.
The move to provide more information about premium room charges comes soon after the Government agency in charge of the retirement village sector issued a strong warning about "confusing contracts" presented to residents and their families.
Troy Churton, Commission For Financial Capability retirement villages national manager, described the contracts as so confusing that even some lawyers who work in the field couldn't make sense of them.
More than 70 per cent of retirement villages have rest home care onsite, and many use this "continuum of care" in marketing.
There can be confusion when a decline in health causes village residents to move into a rest home, which operates under separate regulatory and funding models. New charges can run down estates.
'Premium' rest home rooms
• Charges for premium rooms can range from an extra $50 to hundreds of dollars more a week for features such as an en suite or garden access. This is different to a room having additional services, such as Sky TV.
• There have been concerns over how the costs are presented and explained to residents and their families. Premium room charges are negotiated between the home and resident, and must be clearly specified in the admission agreement.
• DHB funding for eligible residents does not cover premium room charges. Health boards want homes to publish more information about these costs.