29 November 2001 Media Statement

Aged care providers to get funding increase

Around 75 per cent of facilities providing residential care for older people will get an increase in government funding from 1 December 2001, Associate Health Minister Ruth Dyson said today.

Ms Dyson said the government would inject an extra $11.5 million a year into residential care for older people, an increase of 2.6 per cent. The funding was on top of new money that was available for volume growth, she said.

There are around 870 aged care facilities in New Zealand, including hospitals, rest homes and dementia care units.

Ms Dyson said the new funding would be targeted at rest homes and dementia care services that currently receive the lowest subsidies, in an effort to introduce more equitable funding for services throughout the country.

Ruth Dyson said low occupancy was causing financial difficulties for some providers.

“The competitive health care model developed by the previous government means there are now too many providers of residential care for older people, with the result that many facilities have empty beds. I am keen to work with providers to resolve this issue and other contracting matters as soon as possible.”

Ruth Dyson said the government was committed to improving health services for older people, both in residential care and in the community.

“International studies show that the vast majority of older people want to remain in their own home, given the choice – and that this desire increases as people get older. There will always be a place for residential care, but no one should be entering residential care because they have no other options.”

Ruth Dyson said only about 4 per cent of the total older population (around 19,000 people) were in government-subsidised residential care, but funding for these services made up 38 per cent of the total budget for disability support services.

“We need to look at new ways to meet the health needs of an increasingly ageing population, including support for people to stay in their own homes as they get older, if they wish.”

As part of its support for ‘ageing in place’, Ms Dyson said the government had increased funding for home care support services by approximately 13 per cent in 2000/2001, and a further increase of 11 per cent was forecast for 2001/2002.

A 10.7 per cent increase in environmental support services (ramps, handrails, wheelchairs etc) was also forecast for this year, she said.

Ruth Dyson said the government was developing a Health of Older People Strategy, which would improve the coordination of services around the needs of older people, focus on health promotion and disease prevention, and place more emphasis on community-level health care and support services.

ENDS

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