Warning rest homes face squeeze

The Aged Care Association advertising campaign says that without a 46 per cent funding increase, rest home patients will end up in shared ward-style rooms. Photo / Supplied

Rest homes say they will have to squash patients into shared bedrooms unless either taxpayers or the patients themselves can find an extra $500 million a year.

An emotional Aged Care Association advertising and billboard campaign showing four elderly patients sharing a bed will start this weekend, The association will also send all political parties a pre-election questionnaire asking them how they will tackle the funding "crisis" in care for the elderly.

But neither of the two main parties looks likely to give it what it wants. Health Minister Tony Ryall said he could not "write the next three years' budgets" before the election. Labour will announce its policy today.

Both parties also oppose the association's call to tighten the assets test to make patients pay more for their own care.

Labour began abolishing the assets test, in line with a 1999 election promise, by raising the assets threshold above which patients pay for their own care from $15,000 to $150,000 in 2005, and legislating to raise it by a further $10,000 a year in perpetuity.

It is now at $210,000 and National has pledged to keep raising it.

The association says cutting it to $150,000 would claw back $458 million a year from patients.

Rest homes have complained that they are underfunded, at least since 2000 when a PricewaterhouseCoopers study found they were getting 20 per cent less than their true costs.

Charities which once dominated aged care, such as the Salvation Army, Methodist Mission and Presbyterian Support have sold out, saying they could not sustain losses.

A study by consultants Grant Thornton last year found that 68 per cent of rest homes are now owned by for-profit companies. Australian-owned Eldercare said when it bought the Salvation Army homes in 2005 that it believed subsidies would have to rise.

Accounting firm Grant Thornton has found again that average rest home profits are "below those an investor would require to encourage new investment to replace ageing facilities or to stimulate new capacity".

The Aged Care Association says subsidies would have to rise 46 per cent for rest home care, 26 per cent for dementia care and 17 per cent for hospital care to justify building a new facility with single rooms and en suite bathrooms. That would increase total subsidies from $802 million now to $1.3 billion.

"If this investment doesn't happen, then the industry is going to have to cut its costs and a very likely result will be a move to multi-bed rooms with two, three or even four people to a room," said association chief executive Martin Taylor.

"That would be a huge shock for the elderly who have been used to living independently in their own homes. A few might not mind it but I am picking most will experience a loss of identity and meaning."

But Auckland University gerontology professor Matthew Parsons said rest home patient numbers had fallen over the past decade and would keep falling as funding shifted to helping people to stay in their own homes.

Grant Thornton's forecasts assume this decline will stop between 2012 and 2016 when rest homes will be left with only the most dependent elderly, and that numbers will rise after that in line with the ageing population.

But Professor Parsons said most other developed countries provided supported housing for the elderly as an intermediate stage where people could still live independently with support from on-site carers. This is expected to feature in Labour's policy today.

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