Sunday, June 23, 2024

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

By Alistair Duncan

If the nearly 40,000 Kiwis living in aged-care facilities all lived in one place the community would be about the size of Gisborne. They would almost qualify for their own electorate and have the right to appoint/elect a member of Parliament. 57 percent of those citizens require high levels of care.

And if, like Gisborne, they faced upheavals and life-changing events, they would have politicians of all hues paying attention and public services swinging in to restore damaged lives.

They don’t. Instead, aged care residents live in one of two very different worlds. Those who can, (for the moment), afford the thousands of dollars to pay for care with ensuites and garden views, and those who can’t.

With nearly 80 percent of the available beds now requiring the payment of some form of ‘premium’ and free care only available to those with assets of less than $239,930, the continued expansion of the ‘for profit’ providers contrast dramatically with the diminishing number of not for profits.

Beds disappearing

The industry lobby group, the NZ Aged Care Association, says nearly 1000 rest home beds have disappeared in the last 12 months, mostly in the not for profit or small stand-alone providers. At the same time the industry is projecting that 70% of “new” beds will have dual service roles (hospital and care) or be care suites (with premium fees attached).

The ACA also says that two-thirds of respondents to a 2021/22 survey wanted to update their homes but had “insufficient income to justify the cost”.

In August the Arvida Groups’ Mary Doyle Rest Home in Hawkes Bay announced a sudden closure leaving 22 residents with no obvious new home. The closure reflects a pattern of acquisition and closure by the corporate operators, securing market share and profile for their property interests.

Money talks and the share market daily updates illustrate one side of the industry.

The corporates are focused on growth with the likes of BUPA, Summerset, Metlifecare, Ryman and Oceania expanding their care suites and premium rooms with some homes offering nothing but premiums. The brand may be ‘care’ but the business end is property and sales.

How the corporates reacted to Covid was telling. Metlifecare, in the midst of what some directors saw as a hostile takeover from abroad found itself in court as its Baltic buyers sought to wipe millions off the purchase price as the country locked down (they settled eventually).

Others such as Summerset expected their villa sales to plummet and took millions of Covid relief money, only to then have to pay it back when the sales rebounded. Most, but not all of the corporates were savvy enough to lift staff pay for “essential workers”, only to cut the pay when Covid ended.

12 months out from Covid it’s back to business, focusing on land banking ahead of new builds and offering the comfort of licence to occupy apartments and villas with the peace of mind of knowing there are (some) care and hospital beds on site). The ratio of apartments to care beds fluctuates, but appears to be around five to one.

Grey Power National Secretary Jo Millar is critical of the attitude of many providers who see what was once a “care” vocation as increasingly just another property market. And she questions to what extent aged care providers understand that the room they charge for is also someone’s home.

I tell her about my mother’s ongoing experience of paying nearly $400 a day, more than her weekly national superannuation, for a premium room whose shower floods in the walk-in bathroom and how it took weeks to get the company to provide her with a TV remote that didn’t involve dozens of tiny buttons, so small that her shaky fingers could never operate the device.

“Do they get the elderly in to test what does and doesn’t work”? asks Jo, adding that for too many aged care is now a money-making racket.

Care staff look elsewhere

We share the stresses and impact of ongoing high staff turnover as care and nursing staff look to work for better pay in public hospitals. While the ACA and the media focus on the shortage of nurses, the shortage of the numerically larger carers occupational group is just as bad. And, while nurses will benefit from additional government funding secured in the wake of strike action in public health, the tens of thousands of carers are still waiting for the settlement of their equal value claim which was due three years ago.

Back in the corporate world, money talks and this year the corporates are reporting record incomes. Ryman, with the slogan “Experience the difference”, reported an 18.4 percent increase in underlying profit. Summerset (‘70 is the new 50’) a 21 per cent increase. Oceania (‘Believe in better’) came in at 5 per cent.

The ACA represents both the corporates (public and private) who now control 53% % of all beds as well as the small ‘Mum and Dad’ providers with 27 per cent. Charities, once the backbone of the sector are now just 20%. The ACA says the sector is “in crisis”. It’s pre-election lobbying includes a domino image of beds falling towards a wheelchair bound child.

“If we don’t do something there will be thousands of seniors in our public hospitals”, intones the voice over.

It’s a clever and emotive image and one that reflects the dilemma for a sector that exemplifies what happens when a social good becomes a commercially driven public/private partnership.

The truth is that ‘thousands of seniors in public hospitals’, used to be the norm. Care of and care for the elderly was a social good, delivered by the state through a combination of hospital run facilities alongside religious and welfare organisations.

Premium focus

The corporates have made it clear they are focused on residents with money. Premium rooms but only if you can afford it. And the corporates are quick to close or sell off unprofitable sites as demonstrated by Arvida’s closure of Mary Doyle. There will be more Mary Doyle-like closures and more shareholder dividends.

Yes, the sector is underfunded and successive governments have failed to respond to repeated approaches from employers, unions and Grey Power to address the situation.

Sadly, whoever holds the treasury benches after October 14th is unlikely to be asking Te Whatu Ora/Health NZ to focus on a return to public provision of care beds. They should.

Meanwhile, whichever of the “Chris’s, Luxon or Hipkins wins the job of Prime Minister they will have been put there by the baby boomer and post war generation. Their hoardings proclaim “In it for you” (Labour) and “Get NZ back on track” (National). You need the equivalent of an MP’s salary and savings to rest well in care. Most Kiwi’s don’t have that kind of money.

  • Alastair Duncan is a member of Grey Power Wellington Central and worked with unions in aged care for 45 years in New Zealand and overseas.

ì This and other data from the NZ Aged Care Association Industry Profile 20-21 and publicly available company reports.

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