After reading the article ‘United we stand, divided we fall’ in INsite, it is evident that those outside the sector are not conversant with the enormity of the situation that the aged care sector has been battling for decades – this is the chronic underfunding that was identified in the Grant Thornton report, Aged Residential Care Service Review, 2010. A much earlier report by Price Waterhouse Cooper identified the level of underfunding at 32 per cent.
Despite continued underfunding, the Ministry of Health and the DHBs continue to amend the contract and more expenses are expected to be absorbed by the sector at a time when delayed entry means that the level of acuity is rising steadily. The cost is to the provider who must continue to expend more income to provide more incontinence products, greater levels of transportation, more ambulance costs, more dressings – many of which are extremely expensive for complex wounds – more doctors’ visits, a new and compulsory assessment system (interRAI), more costs for KiwiSaver, higher costs for certification and other compliance requirements. Costs have escalated so much without a consequent, proper increase to funding that many of the smaller stand-alone aged care facilities are forced either to close down, or if they are able, to convert to hospital or dementia facilities. Anecdotal evidence suggests that some facilities do not always accept residents who are deemed to be high-cost as it is not viable for a facility to continue to pay for such costs in view of the low level of funding.
All this flies in the face of the Grant Thornton report that found that there is a need for more, not fewer, facilities with the over-65 population increasing by 84 per cent by 2016. The number of facilities need to increase in this period by between 78 and 110 per cent to accommodate this increasing number of aged people. The return on investment is, however, too low to support an increase in building more capacity. Most of the recent growth in investment has been targeted at those who have the financial capacity to make private contributions.
The workforce is predicted to increase by at least 50 per cent by 2026. Many highly qualified RNs continue to leave through stress and to seek better wages elsewhere. All providers desire to pay staff more and would definitely do so if the sector received the same funding that the DHBs receive – there is currently a $3 per hour differential. Apart from religious and welfare homes and retirement villages, the majority of facilities have no other additional or alternative funding or income stream to provide better wages. Providers and the aged in their care would benefit immensely from increased pay rates through improved staff morale and reduced staff turnover – but this can only happen with better funding.
In addition to an already stressed sector, interRAI, whilst in theory a great system, is in practice crippling the sector by increasing the RN’s workload and taking the RN away from the ‘hands on’ approach. Though some costs have been met by the funders, the real cost of interRAI implementation is far greater than the funding allocated to date. With the interRAI funding currently inadequate, the sector has yet again been pushed in a corner and expected to come up with the goods and take on board a system that the Government wants for the data it can generate.
We hear time and time again from families who are denied access to long-term aged residential care and are seriously concerned about the longer delays to entry to care. Families express anxiety at having aged parents at home alone, where they are lonely or fearful at night, or parents not drinking enough fluid for fear of going to the toilet too often, or not mobilising and losing muscle strength, or not eating nutritious and regular meals – the list is endless.
To protest is the sector’s only way of bringing their desperate plight to the fore so that those in a position of power are aware of just how inequitable it has become to expect the aged care sector to provide quality care with so little funding year on year. This is not a recent problem but one that has been compounding through never having been addressed, and it is now taking its toll on a much undervalued sector. The sector initially united and decided that they needed to bring their desperate plight to the attention of the Ministry by not signing the increase for one per cent.
However, it was a catch-22 situation, hence the change of direction. If an aged care facility didn’t sign, they would not get any increase for a whole year and would have to sign to the changes in any subsequent increase in the following year. Many facilities also wanted to take advantage of the ‘premium charging’ clause that was part of the Variation. Though this problem has been partially alleviated by the announcement of the 5 per cent increase for rest homes from 1 October, it is almost too little too late. Last year, rest homes received a 0.89 per cent increase.
Pleas for better funding have unfortunately fallen mostly on deaf ears. With successive governments ignoring the dire financial situation, the sector is left to find alternative ways of surviving despite increasing compliancy, operational costs and rising inflation. Every increase thereafter has been way below what is acceptable for the sector to be expected to provide the very best for our elderly. The premium charging clause will assist some of the sector to charge more to incoming residents but not all are in this happy position.
Many providers do this job because they are passionate about the elderly, not because it is financially rewarding. We wonder how much more the aged care sector has to do before its pleas are heard. The evidence is very real and the Ministry does not need interRAI to determine the level of funding required when evidential reports have been submitted in the past and totally ignored by successive governments. Many of New Zealand’s longest serving residential aged care providers are not retirement villages. This group includes privately owned and operated facilities along with charitable trusts whose focus is on providing care to the most frail in our communities. As they are not retirement villages, they have no alternate revenue stream, so any expectation of cross-subsidisation by the Ministry is inappropriate and erroneous. These providers are left to fund a service that cannot break even from resources that do not exist. What does this mean in terms of impact on capacity to deliver service to the community?
In the greater Auckland region alone, there are 211 residential aged care providers. Of that total, 71 are also retirement villages but 140 are not. So 66 per cent of the Auckland residential aged care providers are unable to tap into alternate revenue streams to cross-subsidise what is already seriously underfunded. Why then is the Ministry listening to the ‘Big 10’ when 66 per cent of the market providers aren’t being listened to?
What does this mean in terms of impact on capacity to deliver service to the community?
The 71 providers who are also retirement villages hold 2488 of the total 9046 aged care beds (27 per cent). The Ministry interpretation that residential aged care providers are able to cross-subsidise service costs from their retirement village activities is placing 72 per cent of the total care capacity significantly at risk.
The public need to be aware of this. The Ministry’s perception is flawed, and because of it, more than 70 per cent of the service capacity in the community is being placed at risk due to underfunding.
We all know the sector as a whole goes way beyond the call of duty to provide premium care to our elderly, and there can be times when it is a thankless job, yet we all soldier on with a smile on our face and grin and bear any unjustified negatives. Stand-alone facilities, as much as the corporate, provide a standard of care that can be exceptional. Clients should still be given a choice of going to either a small or larger facility as one size does not fit all. Therefore, dealing with the corporates to advocate for the good of the entire sector is not the answer as we need representation from both sides.
Although there is now no real ‘quick fix’ for the sector, someone must take responsibility for ensuring that the sector does not go backwards any further. Enough is enough!
CANZ is the Care Association New Zealand. This article was written by the CANZ Executive with input from members.
