Money shortages threaten survival of rest homes

The aged residential sector is in crisis because of chronic Government under-funding at a time when the need is greater than ever, healthcare providers say.

HealthCare Providers New Zealand chief executive Martin Taylor said the future was bleak, with at least 40 residential care facilities being forced to close in the past five years.

The organisation took its message to the streets yesterday with billboards in Auckland, Wellington and Christchurch as part of a wider campaign to highlight the problems.

The campaign will be officially launched at the HealthCare Providers conference next Monday in Auckland.

"There is a quiet crisis in the aged residential sector - facilities are closing, wages are low and the sector cannot attract and retain caregivers and nurses," Mr Taylor said.

Wage increases to public sector nurses through health boards had made it difficult for private sector rest homes to compete, he said.

"We were fully supportive of the wage increase for nurses, who had been underpaid for some time, but it has made it very difficult for us."

Government funding for rest homes had been static for the past five years, with only minimal increases, which did not keep pace with inflation.

Of the $71 million in the May Budget for aged care, half went to pay back district health boards for previous under-funding when district health boards took over paying for aged-care services from the Health Ministry last year.

The other half was divided among different services, including home care and rehabilitation, leaving very little for residential services, he said.

The present rates paid by the Government were around $80 a day for each person for residential care, $130 for geriatric hospital care and $100 for those with dementia.

"This is not a lot of money when you consider it has to pay for hotel-standard accommodation, three meals a day, nursing care and all medicine."

Furthermore, the Government had not taken into account the fact that people coming into rest homes were much older, more frail and in need of a higher level of care than 10 years ago, he said.

In order to survive financially, rest homes were forced to operate at maximum capacity, leaving no space for respite care for stressed-out families.

"Demand already exceeds supply in several regions, including Tauranga, Upper Hutt and Nelson-Marlborough.

"This is going to be a particular problem around Christmas and holiday time, and some families are going to have to look at finding alternative arrangements."

The number of religious and not-for-profit organisations closing down rest homes showed the desperate situation.

"It's not good for the whole sector. Religious and welfare groups have a huge part to play and it's so sad this is happening under a Labour Government."

The problem

Why many rest homes are struggling to make ends meet:

* Pay rises for nurses have pushed up wage costs.

* Government funding has barely kept pace with inflation.

* People stay in their own homes longer so residents are older and sicker than they were 10 years ago.

- NZPA