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Government & DHBs Short change Aged Care Providers

17 June 2005

Holidays Act Compensation Government & DHBs Short change Aged Care Providers

On May 4 at HealthCare Providers NZ policy summit Pete Hodgson said, “Pressures arising from the Holidays Act will be addressed in the upcoming budget”. However, the amount of money allocated is inadequate and will not address the costs of this piece of legislation.

In 2003 the government passed the Holidays Act which increased costs to the residential care sector in excess of 2%. For well over a year aged care providers have carried the compliance costs of the legislation in the expectation that these costs would be covered.

However, this week providers found out that:

The costs of the Holiday Act will only be partially covered. Providers will be compensated at different rates, i.e., there will be no nationally consistent approach each DHB will apply a different percentage to calculate provider compensation. The percentage used for the compensation calculation will only be applied to a part of the funding a provider receives, i.e., providers are paid a daily maximum made up of (a) a DHB payment, about 2/3 of the total roughly $60, and (b) a resident’s national super, about 1/3 roughly $30. The compensation for costs will be a one off amount, i.e., despite the legislation carrying on into the future, compensation will have to be negotiated again for the next financial year.

Five DHBs, Capital and Coast, Hutt Valley, Wairarapa, Mid Central, Wanganui and Hawkes Bay, have revealed they are going to pay 1.7%.

The remaining DHBs appear to be working through DHBNZ, who have refused to confirm what rate DHBs will pay or when payments will be made. The only information from this organisation is that DHBs will pass on all of the Holidays Act funding they have received and that providers will be paid at different rates.

“This situation makes a mockery of the repeated assurances that providers would be compensated for the Holidays Act. The government should have been up front and told aged care providers that they were not going to be fully funded for the increased costs associated with this piece of legislation”.

“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 DHBNZ”.

“The people who pay for these delays are aged care providers. They are the ones who carry the financial risks the Holidays Act”, said Martin Taylor CEO of HealthCare Providers NZ.


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