Aged Care Providers Refuse to Sign Contract

Providers of aged residential care have told the Government they will not sign the contract variation between them and District Health Boards, citing underfunding and a lack of commitment to the InterRAI quality initiative.

Failure to sign the contract means the Government will be unable to make the adoption of the InterRAI initiative mandatory on all aged care providers by 1 July 2014, as it has promised to do so, says the Chief Executive of the New Zealand Aged Care Association, Mr Martin Taylor.

“The National Government has contributed directly to increased costs in the delivery of aged residential care by 3.2 percent through changes to KiwiSaver contributions and by increasing the minimum wage”.

“On top of that, inflation in the aged care sector has risen by 3.4 percent through increases in care costs related to food, staff wages, medical supplies and electricity. There has also been a 1 percent cost impact from insurance premium increases,” Mr Taylor said.

“Taken together, that’s a 7.6 percent cost impact, which is unsustainable for aged care providers. This is death by a thousand cuts. It is unrealistic to expect current levels of funding will be sufficient to maintain and improve the quality of life for those in care as well as provide for pay increases to hard-working caregivers,” he said.

The National Government has offered a 1 percent funding increase for inflationary costs, inadequate for aged residential care operators to pay any increase to caregivers this year. Providers will struggle to maintain the quality of life for the 35,000 elderly in care.

“This is neither an acceptable outcome for caregivers nor the elderly they look after. It does not reflect the valuable work caregivers undertake, nor respect the elderly in care,” Mr Taylor said.

New Zealand has gone through some difficult economic times, but now we have Government surpluses. Therefore, the time is now right to prioritise funding for the elderly and their caregivers. As Prime Minister John Key said in May 2012, “It’s one of those things we would love to do if we had more cash and as the country moves back into surplus” http://tvnz.co.nz/national-news/no-more-money-aged-care-workers-says-key-4902464/video.

Aged care operators are also not signing the contract as they have not been given any guarantees on future costs associated with the Governments only quality initiative in the sector called ‘interRAI’, which is a comprehensive assessment tool that supports better care planning, delivery and policy development. At first adoption was voluntary but then the Minister of Health made it mandatory.

This heavy-handed approach has caused considerable difficulty in the sector, considering the cost of training Registered Nurses has only been partially covered. Providers are becoming increasingly concerned about future costs associated with the use of interRAI.

Mr Taylor said that aged care providers are reluctant to sign any agreement unless all future costs are covered by the Government.

The aged residential care sector needs an increase of 7.6 percent, or $76 million, to even allow it to maintain the status quo. The reality is that every dollar that is eroded by government policies, inflation and unmet interRAI costs is one dollar less that can be spent maximising the quality of life for the elderly in care and one dollar less for caregiver wages, the Association says.

While $76 million is a lot for aged care operators, in terms of the $14.5 billion health care budget it is only 0.53%.

“Now is the time to prioritise both the elderly and their caregivers by increasing aged residential care funding before the aged care tsunami strikes this country,” Mr Taylor said.

ENDS

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