Funding boost delay hits aged health care providers

Aged healthcare providers are struggling to pay the bills because of a delay in paying a Government funding boost promised last year.

The 3 per cent funding increase, costing the Government $18 million, was promised in December by Associate Health Minister Ruth Dyson.

The funding announcement followed Parliament's health select committee expressing concern about "chronic under-funding" of the aged-care sector, saying it affected the ability of employers to adequately pay caregivers and provide proper training.

Healthcare Providers NZ chief executive Martin Taylor said no aged providers had yet received a cent of the increase. "Nobody has been paid the 3 per cent - it's meant to be paid this month on the 8th."

Mr Taylor said the problem seemed to lie with the Ministry of Health's business and payment arm Healthpac, which had yet to pass the money on to district health boards.

"It's a huge problem. 75 per cent of providers are small owner-operators - not part of a big group - and they need a sustainable cashflow."

Healthcare Providers represents groups providing residential care to 10,000 people.

Mr Taylor said providers believed the 3 per cent increase should have been paid out in June and were extremely annoyed.

Also outstanding was an increase of 0.8 to 2.1 per cent for holiday pay.

Mr Taylor said there had been many closures of providers. In Canterbury, aged-care providers are scaling back services because the money has not arrived.

Anglican Aged Care had been forced to cut social activities and occupational therapy because of increasing debt, services manager Janet Anderson said.

Negotiations for further wage increases were scheduled for this week, causing the organisation to carefully consider whether it could afford to pay staff "peanuts", Ms Anderson said.

"[We must] cut and cut and cut to the bone to keep our heads above water."

Canterbury DHB funding and provider relations manager Terry Mitchell said the Government had passed the funding to DHBs but Healthpac had yet to allocate payments to individual providers.

He said the DHB regretted the delays but the complexity of backdating payments for individual providers meant calculating payments took longer than anticipated.

Ryman Healthcare managing director Kevin Hickman said the company had been soaking up cost increases since last year, with little explanation from DHBs.

- NZPA