Aged Care: If the Budget genie gave me one wish, I'd ask for...

Increased funding for aged care would improve the lives of patients, their families, and the wider economy, says Amool Paranjpe, Senior Consulting Manager.

My wish for Budget 2022 is simple: more funding for aged care bed nights. New Zealand has long-standing problems in the aged care sector that will only be solved by more funding – both now and in the future. The shortage of nurses is becoming critical, demand for aged care is rising and the consequences of ignoring this problem are unacceptable. As a society, do we really want to leave our elderly population, their families and aged care professionals in the lurch?

Overburdened nurses can’t provide the kind of care they’d like to

We all want to be well looked after at the end of our lives, and everyone deserves quality care and support. Yet the model of care we currently have leaves families and facilities facing some stark no-win choices.

Unlike living independently in a retirement village, which can be a profitable enterprise, rest home care is funded by the Government. Providers are paid a per bed, per night rate for aged care, which is not sufficient to pay the nurses required to care for the patients. Aged care nurses are paid around 20% less than those working in DHBs, and closer to 30% less than they could make doing the same work in Australia. We have long relied on international nurses to make up the shortfall, but that hasn’t been an option for the past two years.

Unsurprisingly, this has led to a shortage of nurses working in aged care, leaving the remaining nurses overworked and overburdened. The obvious upshot is that – despite their best efforts – patient care suffers. This also has a negative impact on the nurses themselves, who can’t do their job to the standard they want to and are often under considerable stress for long hours.

The number of providers is falling as demand increases

Aged residential care is accessible to all Kiwis and is funded by District Health Boards to various levels - up to 100%, depending on how the resident’s needs are assessed by the DHB. Aged care providers are not making a profit out of working their nurses so hard. Their main client is the Government – a client who is setting the price too low.

At the other end of the market, organisations like Summerset and Ryman Healthcare are only profitable due to the surpluses from their retirement villages’ operations – which help fund their aged care facilities. The aged residential care operations themselves are a break-even enterprise at best, and often a loss-making activity. For small providers who only have rest home care services, this makes life very difficult.

As you might imagine, an unprofitable business does not attract new investors, which means New Zealand is not increasing its aged care capacity. That’s a problem, because our population is aging and the demand for aged care is rising rapidly. In 2020, there were 88,000 Kiwis aged 85 or older; it’s likely that number will triple over the next 25 years, to between 266,000 and 318,000, according to Stats NZ. At the rate we’re going, there will barely be enough rest homes to care for all our elderly. Even if there were, we’re already struggling to staff the ones we have with nurses, so the lack of workers would only be exacerbated.

Providing care is stressful for families

When aged care is either unavailable or can’t be delivered to a satisfactory standard, what happens? Unfortunately, the outcomes are all pretty dismal. Elderly people without families, or whose family can’t care for them, don’t get care, and they die. There are many who are lucky enough to have family members to care for them, but this can come at a huge cost to the family. Someone must step back from their job and take care of an elderly relative, which often puts the entire family under enormous emotional and financial pressure. Ask anyone who has cared for a relative who’s at the end of their life and they will tell you how much of a toll it takes. It also removes valuable minds from the productive workforce, which has a dampening impact on our whole economy.

The lack of aged care facilities is a problem we can see coming from many miles away. It’s entirely predictable – and entirely preventable. Does this problem not get enough attention simply because it never becomes urgent? Because family members are too busy looking after the elderly to bring this issue to the Government’s attention? Is this really how we want to treat elderly kiwis at the end of their lives?

Failing to address this problem is a sad indictment of the value we place on taking care of each other.