Is New Zealand’s aged care sector in peril?

Meeting the healthcare needs of our aging population is one of the challenges facing New Zealand’s healthcare system. Residential aged care facilities (ARC) dominate the provision of long-term aged care support in New Zealand. The residents of these facilities can often represent some of the most vulnerable members of our communities, and they are often dependent on clinical and nonregistered staff for their complex healthcare needs and activities of daily living.

There were 34,646 residents at aged residential care facilities across New Zealand as on 31 March 2020, 55% of whom are at one of the higher care levels. Demand for aged residential care is forecast to increase by an estimated 15,000 beds by 2030, but an unsustainable funding model is threatening equitable access to care for older New Zealanders. Chronic underfunding by subsequent governments has pushed providers to find additional revenue streams, including offering people premium room services, over and above standard rooms.

Aged care workers are in short supply. The sector’s high reliance on a migrant workforce remains high with 43% of nurses on visas, while around one-third of the caregiver workforce is on a visa. In 2018, aged care vacancies reached a record level and was predicted to soon be 1,000 workers short. In 2019, a survey found 83% of aged care nurses thought some basic care was delayed or missed. The question remains, what can be done about it?

If these trends continue, perhaps aged care facilities will begin to close. Small provincial providers are often the first places to close. The larger, more profitable aged care businesses tend to have greater resilience in the form of property development and retirement living. For those providers in the sector where government funding is the only revenue stream, the chances of survival are much lower.
The longer it takes for funding to be corrected in the sector, the harder it is going to be to recruit nurses.

A survey by Aged Care Matters reveals 35% of facilities said it's very likely, or likely, they will wind up over the next 12 months. A recent report said over 15,000 extra aged care beds are needed before 2030, but in the last 6 months, 500 rooms have been closed off due to underfunding. It’s nursing-led and it’s a mainstream part of the healthcare system with the capability to provide 40,000 beds.

The aged care sector is in the midst of a perfect storm. Now is the time to act.