Last week, we covered the decision by Ryman Healthcare to reduce the ratio of aged care beds it is going to build. Then Arvida (NZ) confirmed it’s a trend driven by beds not making money. Same as Australia.
Like here, New Zealand operators are looking at ways to cover their costs in delivering residential aged care, especially as the Government and the rest of the country has fallen on village operators to supply modern residential care.
It is a fact that no new beds have been built in dedicated aged care homes in New Zealand in the past 10-12 years. Every new bed has been built in a retirement village.
The illustration above was taken from the Ryman investor pack last week. It shows that up to 2015 Ryman, NZ’s largest village operator, built 0.55 aged care beds for every retirement village unit. They then dropped that to 0.39, and now they are dropping it to 0.35 beds.
We spoke to Jeremy Nicoll (pictured), CEO of Arvida with 35 villages, last week as part of the Health Metrics webinar. He told us that NZ village operators are moving to ‘Care Suites’ as an alternative to aged care beds.
This is a smaller apartment where a couple or an individual can receive higher levels of care as private customers in a village. The operator charges an entry DMF of say 30%, just like a retirement village contract, and their customers are accepting this charge.
Here in Australia, aged care operators are following the same strategy, while not perhaps realising it. They are diverting capital budgets away from building new aged care homes to building retirement villages, and then offering ‘assisted living’, or home care services into the village unit.
Same result as New Zealand.
But not a good outcome for the community. As Jeremy told us, the downside is that people who do not have wealth increasingly have nowhere to go, especially in the smaller regional towns as worn out aged care homes simply close down. Same as Australia.
This is not a good outcome for a responsible and caring society. Perhaps we need Government subsidised care suites in villages? Maybe that will be Level 5 Home Care Packages?
Should ACCPA and the RLC be going to the Federal Government with such a plan?
