In response to “Aged care sector under pressure” by Bill Rayner, in the last Grey Power mag.
Dear Editor,
Thanks to Bill Rayner for trying to explain the economics of Aged Residential Care (ARC) and the cost pressures facing providers. Charitable providers such as Presbyterian Support consider it important for Seniors to understand the different aged care options available, depending on residents’ financial equity.
Considering we have paid taxes all our working lives to ensure public health for all, Seniors should be outraged by today’s aged care inequities. I encourage their advocacy to change New Zealand’s aged care funding model and hold government to account for the inequity the current model perpetuates.
New Zealand’s healthcare to seniors – not housing – is funded by government through aged care contracts to providers. When someone scores highly in a health assessment test called the MAPle score, residential care should be considered for them. Government funds this option per night per bed to residential care (ARC) providers, the deal with providers being: “you provide facilities where seniors can stay, while we fund you to care for them in those facilities”.
Charitable community providers, such as Presbyterian Support, have inherited residential facilities from their church partners or have raised funds through the community to build more. We need to build as many facilities as possible to meet residential care needs. This is good social investment in the infrastructure necessary to face our rapidly ageing population.
We fear For-Profit providers are investing in builds to service only the seniors who have enough financial equity to trade in for their private facilities. The population is ageing so rapidly that even though the proportion of people with equity is forecast to shrink from two-thirds to one third in the next two decades, it’s still a growing market and great investment for the For-Profit providers.
Currently, about a third of seniors have no financial equity at retirement age and by 2040 this will likely double to two thirds. These are people who have no assets to trade in for a retirement village home and who rely on publicly funded healthcare. That’s why charitable community providers exist, to host this proportion of seniors in their time of need.
These seniors are rapidly growing as a service group. Presbyterian Support is part of the Not for Profit sector struggling to invest adequately to meet today’s demand for ARC in the community, let alone tomorrow’s demand. What’s more, because many people, including decision makers, fail to distinguish between the For-Profit providers and us Charitable ones, there is a blindspot to the growing inequity in terms of healthcare access for seniors.
The community needs to stand against this inequity and call on government to invest heavily in building more “standard rooms” (where no additional payment is sought for care from residents). Standard rooms are occupied by the most needy and vulnerable and it is part of Presbyterian Support’s mission to maintain a majority of these in our care mix, despite recent evidence that each room is underfunded by $15 per night (Ansell report 2023).
Significant capital investment is also needed to maintain our existing ARC infrastructure, sometimes heritage sites. We need government to clear the way of all compliance costs including external certifications, building compliances and more. Training and supervision funds are also needed to retain and attract staff to the Charitable sector, particularly in remote and rural areas.
It’s not good enough to understand the economics, when the economics are glaringly unfair. The Government must be called to account for keeping it this way when there are fairer, practical solutions.
Sincerely,
Dr Prudence Stone, National Executive Officer for Presbyterian Support New Zealand
