Billions needed to stave off aged care crisis

KENT BLECHYNDEN/The Dominion Post

OVER THE TEACUPS: From left, Jocelyn Archer, Mamie Watson and Jessie Gamble of Lower Hutt's Masonic Village Retirement Home chat to Tony Ryall yesterday. Future generations may not have ready access to residential care, he said.

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The number of rest-home beds needs to double in the next 16 years to avert an aged residential care crisis, a new report says.

The Aged Residential Care Service Review, commissioned by leaders of the residential aged care sector, district health boards and the Health Ministry, has found that 26,500 to 37,500 new and replacement beds would be needed by 2026. Demand would begin increasing from 2014.

Based on costing models in the report, creating up to 20,000 new beds and replacing existing but dated facilities would cost from $4.2 billion to $7.5 billion. That did not include operating costs, which would run into billions more each year.

The increased demand was being driven by a surge in the elderly population as baby boomers hit retirement age. By 2026, the over-65 population was expected to rise from 512,000 to 944,000.

"We do not have the facilities or services to care for those people when they age," Health Minister Tony Ryall said at the launch of the review yesterday. "The job is one of absolute priority."

The report finds that despite the urgent need for more beds, there is little financial incentive for private providers to build new facilities, particularly hospital-level and dementia beds, which are in high demand but costly to fund and maintain. "That's where the [government] investment is going to have to go," Mr Ryall said.

He was not sure how much of the funding for new facilities would have to come from government rather than private investment, but aged care would be "a very big-ticket item".

Chris Fleming, the district health boards' lead chief executive for aged residential care, said doing nothing was not an option, despite the huge cost.

"These people are going to need care. If we don't look after them, the Government will be looking after them in a [public] hospital."

Aged care would place an "inevitable" burden on the health dollar. "Anything we take has to be taken from elsewhere."

One suggestion in the report was that the Government considers providing low-income community housing for elderly people who are still mostly self-reliant. A similar scheme in Denmark has reduced the demand on rest-home-level beds.

The report also finds that the aged-care workforce  now about 33,000  needed to increase by 50 per cent to 75 per cent by 2026.

Mr Ryall said district health boards, private providers, the Health Ministry and other government agencies would now work through the implications of the report.

- © Fairfax NZ News