Every year there are different challenges that the sector faces. These are just part and parcel of doing business, but this year has been more difficult than most. There is falling occupancy across all parts of the sector. The funding model review which the sector hoped would offer some improvement in funding has not even begun. The demands under the ARC Agreement often cause issues at audit time as there are different interpretations over what some clauses mean. Too often – in fact mostly – the providers’ point of view is not upheld and support from HealthCERT in these circumstances is lacking. InterRAI has not been universally welcomed as there is a perception from many providers that it does not add value to the business. There has been the impact of the Pay Equity Settlement which has had a devastating effect on many facilities and it is this that will continue to shadow us into 2018.

There is not one provider who does not believe that care givers deserved a better rate of pay. The settlement was welcomed with some reservations – especially around the rates that would be paid. Rumours abounded that rates could be as high as $40 per hour. This did not eventuate but they may well have done considering the straits that facilities have found themselves in. The heartbreak around this is the almost total lack of understanding from the Ministry of Health as to how their handling of this has resulted in many facilities being brought to the brink of closure. It is not malicious – indeed the team charged with this has worked extremely hard to help the sector through this crisis. They are kind and thoughtful people. It is just simply a lack of insight into what would result from the combination of a low occupancy; pay rates that were set too high; qualifications in the sector that were higher than anticipated; staffing levels higher than anticipated; the impact of Careerforce being charged after the fact with looking at overseas qualifications which then had to be back-dated to July 1st; and a payment methodology that was based on averages and used 2015 data. What do they call it – a perfect storm? All fine in a movie but this is real life.

What was been more distressing was the realisation that some facilities reaped enormous financial rewards from this to the tune of millions of dollars. Supposedly poor business practices by some in the sector was not the reason for the problem. When it happened a number of facilities immediately went through a restructuring process – staff were laid off, staffing hours were cut and owner-operators took on more hands-on work. But what happens in 2018 if the methodology remains the same? What else can the sector do? If this question is not dealt with properly then CANZ’s prediction is that there could be wholesale closures of facilities.

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