Saturday, July 20, 2024

Aged care sector under pressure

By Bill Rayner, President - Grey Power North Shore

It is all bad news on the Aged Care front for our senior community as more and more of us are looking for late-in-life care options.

Not so long ago, building granny flats at the back of our children’s houses was the plan.

This moved on from the time when intergenerational homes were common with grandpa or grandma living with the family being the norm. Basic aged care was provided by the family, with outside help where needed.

For Maori and Pasifika communities, this was standard with the care of the elderly a strong cultural family obligation.

Resthomes, both operated by charitable organisations and private, were available where family care was not an option, with some public hospital beds available.

Nowadays it would be difficult to put a granny flat on the back of an apartment on the third floor of the block, and many modern houses would have trouble fitting in an extra cat let alone an older person with mobility difficulties, a particular problem in the major urban areas.

Retirement villages

The growth of retirement villages was the answer in recent times.

The early retirement villages were basically simple with a single bed/sit room and ensuite with central facilities. These were usually operated by charitable groups on a rental basis. My grandmother was one of the foundation residents at the Masonic Village in Onehunga, Auckland in this style. It provided late life care and she died in the aged-care facility there.

Later villages were more sophisticated with a mix of villas and apartment type accommodation, some with planned progression through the stages of life to an aged-care level of accommodation for residents to move to.

Early villages allowed much younger age level for new residents than now where some are designed for 70 and over.

A recent NZ Herald report advises that as Government funding falls short this puts pressure on small providers to stay afloat, with a number closing down, and with the larger operators like Ryman, Arvida, Oceania, and Summerset doing their best to adjust to the situation.

The need for aged care providers to have nurses and hospital level services separates them from the retirement homes that provide housing for independent residents who do not need care.

A survey for the Aged Care Association found that the cost of delivering aged care services had risen by 50 per cent since July 2017, with Government subsidies and other revenue not keeping up with these cost increases. The Association puts day hospital level care rates at about $372 a day instead of the $1,700 in hospitals.

Large scale providers have long subsidised aged care with more profitable retirement living divisions.

The “continuum of care” model with both retirement living and aged care facilities within the same village adds real value to overall retirement packages, and is worth the added cost.

However, as the cost of caring for the very elderly grows, the benefit is less pronounced.

Overall, there is a trend for the major companies to reduce the number of aged care beds in their accommodation mix. Also, they are cutting back on taking age-care patients from the outside community, restricting access to existing residents only.

A Craigs Investment Partners report in September advised that the four large Stock Exchange listed retirement providers – Summerset, Oceania, Ryman, and Arvida, currently accounted for 23 per cent of aged care beds.

Providers are also now providing premium facilities at an additional cost, with some cutting back on the standard Government-only funded beds, to increase their revenue stream.

The current economic downturn has seen a number of retirement village construction proposals delayed. The Devonport Rymans William Saunders Village has only a few apartments left to sell, and their Takapuna site has been mothballed. This creates a local problem in an ageing community, where living local is important.

The Herald comments that as larger providers reweight and offer “accommodation supplements”, smaller organisations that provide standard care for the less well off have fewer tools at their disposal.

The Aged Care Association states: “We know how many people will be aged over 85 in 10 years and that we’re going to need 13,000 more standard aged care beds. There are none being built. There’s nowhere for people with no money to go”

“We’re staring down the barrel of a bit of an aged-care crisis”

A situation that needs to be addressed.

– Reprinted courtesy of Seasons magazine

Related: Regardless of the election result most Kiwis can’t afford premium aged care

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