“The contract that the aged residential care sector has with government requires residents to have a suitable bed space and access to a bathroom and toilet. This means that many of the facilities constructed decades ago were either multi-bed wards with shared toilet and bathroom facilities, or rooms of around 11sq m with shared bathrooms and toilets.
“This form of accommodation is not what residents today, or in the years ahead, want. Providers have recognised that, and new facilities provide modern living arrangements, with more space and en suite bathrooms.
“The recovery of this substantial capital investment has had to be found by way of co-payments made by the resident, or their family.”
Quality of care is not linked to whether a facility has premium rooms, Dunn said, but “the reality is that the likelihood of accessing a bed with no co-payment is becoming harder as the years go by”, and if underfunding continues “it will only get harder”.
There are about 38,000 aged care beds in New Zealand. The sector is badly short of staff, including nurses, which has led to some facilities shutting down beds or altogether, and increasing cases of “bed block”, where an older person stays in public hospital as there is nowhere for them to be discharged to.
The cost of replacing or building a new bed is about $300,000, Dunn said, and the ageing population meant another 13,200 aged care beds were needed by 2030.
“Unless the government starts funding the sector adequately, these beds will either not be built at all, or if they are, will have to incur premium charges – creating a very inequitable future for seniors.”
Te Whatu Ora says “facilities must accept an individual who does not have any other suitable options, even if the room available is a ‘premium’ room. They are not obligated to pay the additional charge”.
Ranfurly Hospital in Auckland’s Three Kings generally charges around $100 a day for a premium room.
Director Graham Wilkinson said all rooms had en suites, with extensive grounds and facilities including relaxation chairs. Government funding is well below the level needed, he said.
“Despite these charges, our wages still exceed 75 per cent of all revenue, whereas when Ranfurly Hospital opened in 2014 it was around 55 per cent. This is before catering, doctors, transport, marketing and the other many costs that have all increased exponentially.”
Jon Duffy, chief executive of Consumer NZ, said the organisation had concerns about some facilities offering to scrap premium room fees for residents, in exchange for what is called a “refundable accommodation deposit” (RAD). He said that was essentially an interest-free loan to the facility in the hundreds of thousands of dollars, refunded when they move out or die.
“There is a risk the RAD won’t be paid back as this relies on the financial position and liquidity of the facility. The protections in place are limited.”
‘Premium’ rest home rooms
• Charges for premium rooms can range from an extra $10 to $100 more a day, for features such as an en suite or garden access.
• Te Whatu Ora advises that “facilities must accept an individual who does not have any other suitable options, even if the room available is a ‘premium’ room. They are not obligated to pay the additional charge.”
