28 August, 2013
NZ Aged Care Association conference
E aku rangatira, tēnā koutou katoa. Ka nui te honore ki te mihi ki a koutou.
Good afternoon, and thank you for inviting me to speak to you today. Particular thanks to Greg (Ward) for the kind
introduction, and to Martin (Taylor) and Simon (O’Dowd) for organising and inviting me to take part in this conference.
I would like to acknowledge Roy Reid, President of Grey Power. I would also like to acknowledge all the attendees for
their commitment to the sector and for taking time out from your busy lives to come to this conference, to learn from
each other and the wonderful array of expert speakers I have seen on the programme.
It always gives me great pleasure to attend events like this one and have the opportunity to talk to people who have
such a positive impact on the lives of so many of our older New Zealanders. From Chief Executives and facility managers,
to carers and kitchen hands, those working in aged residential care do a fantastic job, and as Associate Minister of
Health and Minister for Senior Citizens I would like to thank you for the work you do.
I would like to take this opportunity today to talk to you about the Government’s vision for the future of aged
residential care in New Zealand, as well as our wider vision for how we can help all older New Zealanders live healthy
and independent lives. I then hope that we will have some time to answer any questions that you may have.
Our ageing population
We all know we have a growing number of older people. The number of people aged 65 and over in New Zealand has doubled
since 1980 and passed 600,000 in 2012. This number is likely to double again by 2036. Our older people are also living
for longer. We should celebrate that.
The average life expectancy for a 65 year old man today is another 19 years, and for women it is 21 years. Life
expectancy for Māori is improving, but remains four to five years lower than for others.
For many older people, these older years are also active years. A 65 year old today can expect to live independently and
without assistance for another 11–12 years. These older people are also working longer and staying involved in their
Having said that, the increasing number of people aged 65 and over – and particularly the increasing number of people
aged 85 and over – do have health problems that need support. This has major implications for our health and disability
sector, including aged residential care, in the years ahead. So we need to be prepared, and I believe we are making good
Government funding for aged care
The Government is determined to make a difference in the lives of our older people. Action today will improve the
wellbeing of our older people now, and prepare us for the future. To achieve this goal, we have continued to increase
the funding spent on services for older New Zealanders.
In 2012/13, approximately $928 million was spent on aged residential care and $269 million was spent on home-based
support services. Most recently, in Budget 2013 the Government announced $70 million of additional funding over the next
four years for aged care and dementia.
As announced in April, we have dedicated:
• $20 million over four years for home support services to help more older New Zealanders stay in their homes longer;
• $1.2 million over three years for dementia related training for health care workers;
• $2 million over three years to support dementia awareness programmes and assistance for clinical teams in early
detection of dementia;
• $12 million increase in funding for dementia bed subsidies over four years, to encourage further investment in
dementia beds; and
• $1.5 million to support the release of registered nurses to train in the use of the interRAI assessment tool being
rolled out to aged care facilities.
In addition district health boards have been funded to invest an additional $33.2 million on aged residential care
subsidies over four years.
This new funding follows continued Budget increases in funding for aged care and dementia since the Government took
office in 2008, and demonstrates our commitment to helping older people live healthy lives.
Demand and funding for aged residential care
The Aged Residential Care Service Review (or the Grant Thornton review as it is often called) was published in 2010 and
estimated that by 2026 we could have between 42,000 and 50,000 residents in aged residential care.
For 2013, the review projected that we would have between 28,300 and 32,300 residents in aged residential care. In
reality the number of residents is now close to the top of that range. This increase means that district health boards
need to watch supply and demand closely.
The aged residential care demand model, which has been developed by DHB Shared Services, will be useful for district
health boards in this regard. They will be able to use this model to forecast demand for residential care in their
areas. The District Health Board Health of Older People Steering Group has asked each district health board to answer:
• Will your district health board have enough beds to meet future demand under current policy settings?
• If not, what actions are you going to take to ensure supply meets future demand?
This model is an excellent demonstration of how the sector is working to ensure we have the residential care beds we
need in the future.
To help ensure that we continue to have enough beds, both now and in the future, the Government continues to invest in
aged residential care as already mentioned.
And so far, residential care beds have increased sufficiently to meet demand.
However, it is important to remember that we cannot directly equate the growth of the population over 65 years old with
growth in demand for age residential care. This is because the proportion of people over 65 that require residential
care has decreased over the last five years due to better health and better home support services, which I will talk
I also appreciate that there has been some concern in the sector about the number of aged residential care facilities
closing their doors in these difficult financial times.
However, since July 2008, 26 new facilities have opened adding over 1800 beds, and 77 existing facilities have expanded
adding over 1300 beds. While some facilities have closed, particularly in Christchurch, we actually have 990 more
residential care beds now that we did in 2008.
These beds are a mix of both premium and standard beds and in both large and small facilities, as well as part of
retirement villages and standalone facilities. This mix provides older people and their families with the ability to
choose the type of care and facility that best meets their needs.
Ensuring quality in aged residential care
Importantly, it is not just the number of beds that is increasing. The quality of aged residential care facilities is
also improving. I am pleased with the number of improvements in the audit regime over the last few years, including
accreditation of auditors, combined district health board and HealthCERT audits, spot audits, and publishing audit
These changes all improve the quality of aged residential care and ensure that we are able to provide the highest
quality care and support for older New Zealanders.
These improvements were also recognised by the Office of the Auditor-General in its 2012 report, which noted that since
2009 good progress had been made in certifying and monitoring rest homes. But we are always looking for ways to further
improve these processes and the quality of our aged care facilities.
As part of this improvement process, I asked the Ministry to consider ways of increasing the amount of information on
residential care facilities available on their website and, as you may be aware, earlier this month it was announced
that the new Provider Regulation and Monitoring System will provide improved online information about rest homes from
The enhanced information will be similar to the information published by the Education Review Office on school audits.
For example, previous audit summaries will be made available for people to compare with current audits, and more
information will be available about the corrective actions that facilities need to take.
There have also been calls for the full audits to be available through the online option rather than by OIA request.
These reports are usually 100 pages and require considerable redaction of information which might identify either
individual staff members or residents. As this comes at a cost of considerable time, I have agreed to a six-month trial
to see how many people bother to read them when the full report is available.
I know it has been of concern to your sector that your audits are online when other health facilities, such as
hospitals, are not subject to such scrutiny. This will soon change and the public will be able to use the My DHB tool to
access DHB audit summaries from November this year.
I look forward to these improvements being made to make sure that older people and their families can make informed
decisions about where to live when they are no longer able to live independently at home.
Premium-only aged residential care
As you are aware, the idea of premium-only residential care had been suggested as a way to encourage investment in aged
residential care. Through its public consultation, the Ministry of Health received a wide range of informative
submissions on the proposal, and I would like to thank all of you who took the time to share your thoughts.
Most submissions received were against allowing premium-only facilities. Many people were concerned that it would create
a divide between those living in standard and premium facilities, and that the supply of beds without an extra charge
would reduce. After reflecting on these submissions, we have now decided not to move ahead with the premium-only
However, I have asked health of older people sector leaders to look into premium charging and how it is applied across
the country. As many of your submissions highlighted, aged residential care providers and residents would benefit from
clarity on this matter.
For example, under what circumstances does a facility with only premium rooms vacant have to take in a resident who will
not be paying an additional charge. Another issue is notice periods for residents who wish to cease paying an additional
I also understand that there is concern in the sector that the majority of new aged residential care beds opening carry
premium charges, and that consequently aged residential care may become out of reach of some older people.
We know that many new facilities are offering standard beds, as well as premium rooms. But the balance between providers
making a return on their investment and standard rooms being available is a matter that needs to be looked into and is
something that will be addressed in the review of premium charging.
Once I receive the advice on these issues I look forward to sharing the results with the wider sector and making sure
that all older people continue to receive quality aged residential care, regardless of whether they live in a standard
or premium room.
I know you will be discussing this during the conference and I urge you all to engage in that process.
interRAI in aged residential care
Assessing people’s needs is essential for delivering high quality, seamless, and personalised services. To ensure this
happens, you will all be aware that district health boards are rolling out the internationally accepted Comprehensive
Clinical Assessment framework, otherwise known as interRAI.
Using the interRAI programme, each resident will receive a nationally consistent Comprehensive Clinical Assessment at
least twice a year, or when their health status changes. This system will ensure that all older people are able to
access the care and services they need, regardless of where in New Zealand they live.
The roll-out of interRAI for home-based support services is now complete and work is well and truly under way to
introduce interRAI in aged residential care facilities. Over 3300 assessments have been completed using the interRAI
Long Term Care Facility tool. In addition, 341 nurses are now competent to use the tool independently and a further 200
nurses are currently in training.
This is great progress and means we are on our way towards meeting our goal of all aged residential care facilities
using interRAI from July 2015.
To ease the cost of introducing interRAI for providers, the Government has provided $1.5 million to contribute to the
costs that facilities will face in backfilling nurses while their staff members undergo training. This funding will help
facilities to ensure their staff are fully trained to use interRAI and that their residents can benefit from the use of
comprehensive clinical assessments.
I encourage all providers of aged care services to adopt this tool as soon as you can to support the professional
clinical care that you provide to your residents. I also encourage you to visit the interRAI exhibit at the conference
over the next few days if you have any questions about implementing interRAI at your facility.
Improvements to dementia care
As more New Zealanders live longer, the number of older people with dementia is increasing. Supporting this growing
population and ensuring that services are available to help them live the best lives they can is a challenge that we
The Government has demonstrated its commitment to helping those with dementia since it was elected in 2008. We dedicated
$44 million in Budget 2011 and $40 million in Budget 2012 to improve and increase the services available to people with
A big portion of this funding has been used to increase bed rates with the intention of stimulating an increase in the
number of dementia beds in residential care. Our investment is clearly making a difference, with 24 percent more beds
added over that time. And the Government’s Budget 2013 commitment of another $12 million over four years to increase the
dementia bed price will provide a further boost to dementia services.
While it is important to ensure there are enough residential beds available for the people with dementia who need them
most, it is also important that care and support is available for people with dementia who are living in the community.
This is why Budget 2013 included $1.2 million for dementia-related training for health care workers and $2 million for
dementia awareness programmes and to help primary care professionals detect dementia early.
The Government’s focus on supporting all people with dementia is also highlighted by the development of dementia care
Dementia pathways create a clear and supportive path – from a person’s diagnosis to their end of life stage – to make
sure people with dementia and their families can easily access the services they need. They also encourage all health
and social services to work together to provide people with seamless and integrated care. This will make the whole care
and support network easier for people and their families to navigate and use.
By using dementia care pathways we can ensure that people with dementia, and their families and whānau, receive the best
care and support possible so that they can live the best lives they can with dementia. Therefore, I encourage you all to
become involved in developing and implementing your local dementia care pathways as aged residential care is a crucial
part of dementia care.
Improving the aged care workforce
The Government is also working to further improve the aged care workforce. As mentioned earlier, Budget 2013 allocated
$1.2 million to dementia-related training for health care workers. In addition, in each district health board
geriatricians and gerontology nurse specialists now work with, advise and support health professionals in primary care
and aged residential care.
This support means that older people are receiving improved specialised care, both in aged residential care and in the
community. Health Workforce New Zealand is working with the Royal New Zealand College of General Practitioners and the
Medical Council of New Zealand to include advanced training on care for the elderly as part of general practice
To further improve the care available in aged residential care facilities, and to ensure that our aged care workforce
continues to expand, graduate nurses choosing to work in aged care are now included in the Voluntary Bonding scheme.
The Voluntary Bonding Scheme is an incentive payment scheme that rewards medical, midwifery and nursing, graduates who
agree to work in hard-to-staff areas or specialities. Graduates who are part of the Scheme are eligible for incentive
payments to help repay their student loans. In 2012, 23 per cent of 411 nursing graduates registering an interest in the
scheme either work, or intend to work, in the aged care sector.
Improvements to home-based support services
As our population ages, the Government wants to make sure that older people can remain healthy and independent in their
own homes for as long as possible. This will not only reduce the pressure on aged residential care and hospital
services, but will also ensure older New Zealanders are able to retain their independence and stay connected to their
In 2012/13, district health boards spent approximately $269 million on home support services ($48 million more than in
2008/09) and DHBs purchased over 10 million hours of home support (over one million more than in 2008).
To make sure that older people can continue to access quality home-based support services, in Budget 2013 the Government
committed $20 million of additional funding over four years for home support services to help more older New Zealanders
stay in their homes longer.
From September this year, all providers of home-based support services will also need to comply with the Home and
community support sector Standard. This follows our 2011 election promise to improve the quality of home-based support
services and introduce a compulsory quality standard.
Providers will undergo audits, similar to those undertaken in residential care, to ensure they are meeting the expected
quality standards. And it is intended that these audits will also be made available to the public online as is the case
with residential care.
In addition, a complaints process for home-based services has been implemented so that quality issues can be addressed.
These changes will ensure that older people and their families can have confidence in the services they are receiving.
Together, these quality improvements and the increased funding we are dedicating to home-based support services will
make sure that our older people are able to live healthy and independent lives in the community for as long as they are
safely able to do so.
To finish, I would once again like to thank the New Zealand Aged Care Association for inviting me here today. I hope
that you now have a clear idea of the direction this Government is taking to improve the lives of New Zealand’s older
people now, as well as ensuring we are prepared for the future.
Addressing the ageing population is not just a challenge for our generation, but one for future generations as well, and
we owe it to our children to start tackling it now. The aged residential care sector is a crucial part of the solution
and will no doubt face great opportunities and challenges in the coming years.
The Government is looking forward to working with you all to ensure that high quality and sustainable care is available
to our older people today and for years to come.
Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.