LoginHome » News » Spanz Magazine » All Issues » December 2005 » The changing face of elderly care
The changing face of elderly care
By Amanda Wells
Stories of staff strikes, takeovers and closures are creating anxiety for many older people and their families.
Once dominated by religious and charity organisations, elderly care is increasingly the domain of commercial operators.
Australian investors Macquarie Bank and FKP Property have launched a $340 million takeover bid for New Zealand’s biggest retirement village operator, Metlifecare. The Salvation Army has sold its rest homes, as have the Auckland Methodists. Several Presbyterian Support regions have sold their residential facilities, and others are considering their options.
With our aging population, it’s easy to assume that rest homes are cash cows for their owners, with ever-increasing demand and profits.
But, in reality, the price that rest homes can charge their residents, whether they are subsidised or pay privately, is capped by the government. This income is increasingly failing to cover costs.
Commercial operators make money by becoming de facto property developers, selling apartments and villas to their inhabitants and then taking another slice of the cake every time they are on-sold.
Presbyterian Support South Canterbury chief executive Michael Parker says the issue starts to take on a philosophical dimension. “Do we stay in the sector and become the same as a commercial operator in order to survive?”
He says his region remains in the rest home business because it still sees a need. “We continue to review that on an annual basis.”
Three Presbyterian Support regions have sold their residential care facilities. Those regions that remain in the industry – Southland, Otago, South Canterbury, and Central – face difficult operating conditions.
In October, members of the Nurses’ Organisation and the Service and Food Workers Union employed by Presbyterian Support Southland, Otago and South Canterbury took strike action. This strike action is connected to salary increases won by nurses from district health boards earlier in the year, which has put pressure on wages in the resthome sector.
Members of industry lobby group Health- Care Providers NZ operate a total 22,000 beds out of the 33,000-bed sector, and include religious and charity providers alongside commercial operators. Chief executive Martin Taylor says the biggest immediate danger to the residential care sector is its lack of nurses. To attract back nurses who have moved to the public sector, the private health sector needs to be funded to the same level as the DHBs so that it can pay the same wages, he says.
Care givers, who do the one-to-one work for residents, are paid only $9-$11 an hour and are difficult to attract and retain. Presbyterian Support South Canterbury’s Mr Parker says there is no dispute that staff are underpaid. “But we are limited in what we can actually offer.” Growing compliance costs, electricity, insurance and maintenance add to the strain on purses.
Mr Taylor says the sector’s providers continue to deliver high quality care under difficult circumstances. “But if the sector doesn’t get sustainable funding, then there will be problems in delivery of care and accessibility.”
In early November, a new funding deal was announced for private rest-home operators that offered a 3 percent rise to cover services and a 1 percent rise to cover holiday pay. But Mr Taylor says this fails to match the sector’s inflation rate of 3.4 percent.
A worst-case scenario would see New Zealand replicating the crisis that developed in Australia, where insufficient funding lead to a shortage of thousands of beds and a drop in the quality of care. The resulting crisis forced government action.
“People need to be concerned about the way the sector is funded. With the right funding, there will be providers willing to invest and stay in the sector.”
Presbyterian Support East Coast announced it would sell its residential elder care facilities earlier this year. In a statement at the time, chief executive Shaun Robinson described the decision as “difficult”.
“We are mindful that community relationships at many sites go back up to 50 years.
“However, the government has reneged on its part of the partnership by reducing the value of funding and pushing up costs,” he said.
The Presbyterian Support regions that have moved away from rest-home care are providing assistance to the elderly in their own homes, through Community First and Home Support programmes.