Politicians woo aged care sector

Opposition parties tantalised resthome owners yesterday by promising "significant" or "dramatic" increases in state funding for care of the elderly.

But National health spokesman Paul Hutchison (significant) and New Zealand First MP Jim Peters (dramatic) did not say how much extra state funding their parties would give.

"It's a massive challenge," Dr Hutchison said when pressed for details at the Auckland conference of Healthcare Providers, the association of private hospital and resthome owners.

The association started a high-profile pre-election campaign this week. It highlights, in full-page newspaper advertisements, its claim of massive underfunding.

Chief executive Martin Taylor said an increase of $197 million or 36 per cent over four years was needed to cover historical underfunding of 20 per cent, inflation and the cost of competing with public hospitals for staff, whose nurses and healthcare assistants had won large pay rises.

The association argues the Government must finance the industry to lift its nurses' and caregivers' pay to public hospital levels, to ensure there are enough of them. It says unless it gets enough state cash, too few of the new resthomes needed will be built to house the 44,000 extra residents expected over the next 20 years.

"If a reasonable rate of return on capital is not forthcoming, where will the estimated $3 billion needed to build these beds come from?" asked chairman Simon O'Dowd.

Mr Taylor said many owners received less than a 5 per cent return.

But some big institutions were buying into the sector expecting higher prices when residents became more willing to pay without subsidies once demand exceeded supply.

At present the price is capped at around $680 a week for providers contracted to district health boards, although residents can pay more for extras such as an en suite bathroom.

Associate Health Minister Pete Hodgson said funding had gone up in the past six years, including 30 per cent more for aged residential care and nearly 100 per cent more for home-based support services.

"I acknowledge you guys are underfunded. We are beginning the process of catching up," he said.

More than 30 aged residential facilities have closed in the past two years and others are considering doing so if they do not receive a big boost from the Government.

Wages are as low as $10 per hour in the sector, 50c above the adult minimum wage.

NZ First is committed to removing asset testing for the subsidies. It and United Future also want rules to ensure health boards do not spend aged-care funding on other things.

Elder care

* 46,000 people in resthomes or geriatric hospitals last year, the majority elderly long-term residents.

* Predicted to hit 90,000 in 20 years.

* Owners claim the sector in crisis.

* They want a 36 per cent state funding boost over four years.

* Residents pay around $680 a week in a state-contracted resthome.

* State subsidies available for those sufficiently disabled who pass the means test.

* Around 70 per cent of elderly long-term residents are subsidised.