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Bureaucrats Bungle - Aged Care Crisis Continues


20 April 2005

Bureaucrats Bungle While the Aged Care Crisis Continues

In December 2004 the government finally decided on a 3% funding increase for residential care to compensate providers for inflation for the 2003 – 2004 year. This increase was then delayed as Providers negotiated with DHBs to get the money without any extra strings attached.

However, the funding has yet to be passed on because the Ministry of Health’s payment division HeathPAC is in disarray.

Adding insult to injury, compensation for the Holidays Act has also been delayed. The irony is that DHBs received the money months ago, but they did not know how to pass it on to providers. Therefore, they went back to the MOH for advice and now they are trying to interpret that advice.

“What this situation reveals is that the whole system supporting aged care funding is a bureaucratic shambles. Every step of the way there seems to be a severe disconnect - whether it’s between the Government and the MOH, or the MOH and DHBs or DHBs and HealthPAC”.

“The people who pay for these delays are aged care providers. They are the ones who carry the financial risks for inflation and the Holidays Act”.

“The government, the Ministry of Health and DHBs should be ashamed that it has taken so long to pass on an inflation adjustment for the July 2003 – June 2004 financial year”.

“I hope that the government, the MOH, HealthPAC, DHBs and DHBNZ sort themselves out otherwise the delays will result in more closures of residential care facilities. Providers cannot carry the costs of inflation and the Holidays Act any longer” said Martin Taylor CEO of HealthCare Providers NZ.


HealthCare Providers NZ (HCPNZ) was launched on March 10 2005, to represent the aged care sector (residential care facilities and private geriatric hospitals). It represents around 75 per cent of residential care facilities and private geriatric hospitals, and was established as a result of Residential Care NZ and the NZ Private Hospitals Association joining operations.

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