With a fragmented and inconsistent approach to funding across the country, the home and community support services sector is struggling to meet growing demand for its services. JUDE BARBACK looks at some of the key concerns facing the sector.

New Zealand’s ageing population + the Government’s drive to keep older people healthy and independent in their homes for longer = an increase in demand for home and community support services (HCSS).

It is a logical equation, yet, according to providers, there appears to be a failure to properly equip the HCSS sector with the necessary resources to meet the rising demand.

The Government’s New Zealand Positive Ageing Strategy, which is the responsibility of the Office for Senior Citizens, Ministry of Social Development, has 10 goals aimed at helping to meet the social, economic, and health needs of older people in order to enable them to remain healthy and independent in their homes for longer.

Limited resources

However, HCSS providers are reporting that the recipients of home support services are getting older and frailer, as district health boards (DHBs) concentrate their resources on providing home support to those in most need, leaving those with lower-level needs to cope without these services.

Julie Haggie, chief executive of the New Zealand Home Health Association (NZHHA), believes this approach is likely to place a strain on the use of secondary and specialist services. She says support services are not just about keeping people in their homes but helping them to remain as healthy as possible. “Level of health has a huge impact on quality of life,” she says.

However, the DHBs’ approach is borne out of necessity. Chris Fleming, lead chief executive officer for the DHB Shared Services Health of Older People Steering Group, says that despite government investment in health and disability, services have increased year on year and DHBs must make funding decisions within the funding envelope available.

Squeeze on providers

The limited resources available have prompted some funders to enforce economies of scale by paring back the number of contract holders.

The most notable example is the Accident Compensation Corporation’s (ACC) decision in August this year to reduce the number of contract holders from 86 to six, leaving many smaller providers to scramble on board with bigger providers or leave the sector altogether.

Yes, it might “better align the service to its overall strategic direction”, as ACC claims, but the reduction in providers is also likely to reduce ACC’s grip on quality control and outcomes. The onus on monitoring these measures will no doubt fall on the shoulders of the chosen six, who will need to monitor the work of the smaller providers to whom they sub-contract.

The ‘chosen six’ include four national providers (Healthcare of NZ, Access Home Health, Geneva Healthcare, and Medibank), and two regional contracts (Presbyterian Northern – Auckland/ Waikato and Royal District Nursing Services – Auckland). As for the other 80, two of the largest privately owned providers (McIsaac Caregiving Agency and Panacea Healthcare) have been bought by Healthcare of New Zealand, some providers have already left the industry, and further change and amalgamation is expected.

Many providers hold contracts with a range of funders, such as Ministry of Health, DHBs, ACC, or private funders, but with funding reportedly tight across all streams, there is little benefit to this diversity. Some DHBs are looking at reducing contract holders, too, with Capital and Coast DHB taking this step following a service review last year. Southern DHB is reportedly taking a similar course of action this year.

Lack of consistency

The variation from DHB to DHB, in addition to the different models used by different funders, has resulted in a lack of consistency and transparency across the sector.

For example, the amount paid under the fee-for-service model varies across New Zealand, with about a 30 per cent difference between the top-paying funder and the lowest. Haggie says the HCSS sector desperately needs a funding framework that provides more consistency in payment and service expectations across the country.

In Dr Judy McGregor’s report on her inquiry into the aged care workforce, Caring Counts, Peter Hausmann, chief executive of Healthcare of New Zealand Holdings Limited (HHL) Group, the parent company for Healthcare of New Zealand, said, “another big discrepancy is the different rates paid by the various DHBs. The variability between them is about 25 per cent. A number of them know we are going to have to top up wages or they are below the minimum wage. The DHBs are funding us below the minimum wage.”

Whanganui DHB was highlighted in the report as a particularly problematic funder for home health services. In the area covered by the Whanganui DHB, funding to the three home care providers is insufficient to meet the cost of the service.

“All of us are making losses and we were making losses two years ago. We’re saying we should pull out and just let the service collapse, but morally, we’re not able to do so,” said Graeme Titcombe, chief executive of Access.

Fleming concedes that there is no nationally consistent costing or pricing model within the home-based support services area.

“The challenge, in particular, for the larger home-based support service providers, many of whom provide services across multiple DHB boundaries, is that, unlike the residential care agreements, which are consistent, they have to face differences of approaches between district health boards.

“This does result in variation across the country, an issue that providers have been raising and is being discussed at a national level. However, there is no agreed pathway at this stage. This will mean that there is variation around the country, but DHBs are working with their providers in order to try to enhance quality of services, and this requires a competent and stable workforce,” says Fleming.

Workforce stability

However, providers say that a ‘competent and stable workforce’ is becoming increasingly difficult to achieve in the current environment.

The NZHHA’s report Making the Most of Home Support Services states that the increasing number of older New Zealanders requiring home support and the increasing acuity of needs of clients are two factors driving the need for more staff, and consequently, more training. However, funding mechanisms in place do not take into account increased acuity or workforce sustainability.

The knock-on effect is that providers often cannot guarantee hours of work or offer sufficient incentives for staff to train. As a result, staff turnover is high; Haggie says as high as 30 to 50 per cent in the first six months of employment in some areas. Some providers are finding it necessary to train two people for one job because of the turnover rate.

Pay disparity

A key driver of the high turnover rate is the issue of pay disparity between care assistants working under DHB contracts and those working under community care providers, with DHB assistants typically paid more than their community care provider counterparts.

According to HCNZ’s figures last year, DHB pay rates for home management are $20 per hour upwards and $22 plus for personal care, community support workers earn $13–$15.50 per hour, and hospital support workers are paid $16–19 per hour.

McGregor’s report scrutinised many possible reasons for the disparity. Professor Matthew Parsons, Chair of Gerontology at The University of Auckland, suggests the housework component completed by community support workers does not entitle them to the same level of pay as healthcare assistants in hospitals. Some DHBs pointed to the “union power” as a contributing factor for the better pay received by their workers. Others argue that the degree of responsibility and autonomy and access to direct supervision makes caring in the community harder.

Regardless of these opinions, the vast majority of people within the HCSS sector are pleading for a “level playing field” with the DHBs.

However, the aforementioned variation between DHBs themselves will likely make it difficult to find the appropriate rate.

To further compound the quandary, there is also considerable variance between what assistants are paid according to their location.

“It is vastly uneven across the country,” says Haggie.

Apparently, assistants working in ‘rural’ areas are paid less than those in ‘regional’ areas.

In her report, McGregor outlines several recommendations around achieving fairness in this area, notably for the Minister of Health to direct the DHBs to develop a mechanism to achieve pay parity between healthcare assistants working in DHBs and carers working in home support and residential facilities. She also recommends that DHBs and residential care and home support providers implement pay parity for carers across the government-funded health sector within three years.

The Ministry of Health is trying to rectify the imbalance and is in the process of working out what the right level should be.

Travel reimbursement

In addressing pay parity, the issue of travel reimbursement arrangements also needs to be considered. DHB care assistants often have access to a pool car in contrast to the travel reimbursement received by other carers, which is believed to be insufficient to cover the true cost of travel.

Apart from exceptional travel situations, DHBs and the Ministry of Health Disability Support Services do not fund travel time. ACC is the only funder that reimburses travel time, and that is at half the minimum wage rate. The ‘Fair Travel Policy’, implemented in 2006, while a step towards recovering vehicle costs of support workers, does not address travel time between jobs.

The Fair Travel Policy also does not reflect current petrol prices. As a result, travel reimbursement allocated to providers from funders is insufficient to cover the real costs of workers’ travel. Another barrier to full reimbursement was said to be the cost at which reimbursement was taxed.

“Carers are often forced to dip into their own pockets, which means they are effectively earning less than minimum wage,” says Haggie.

Like pay rates, the amount of reimbursement for vehicle use varies across the country, according to the rate paid by the DHB and the travel policy in place.

Caring Counts reported various methods of travel reimbursement. One included loading 77 cents an hour (with a cap of three hours per assignment) onto client contact time to pay travel expenses, while another is to pay a mileage rate (typically 30c a kilometre) with the first ten kilometres of each day subtracted. Another variation of this is to exclude travel to the first client from home and travel from the last client of the day in the daily mileage calculation. Still others use the travel component supplied by the funder as a top-up to the hourly rate, less tax.

Who are the future carers?

With the question marks hanging over fairness and consistency of pay and reimbursement, it is difficult to attract people to the job. Haggie is concerned as to where the next home care assistants are coming from.

With many older care assistants now retiring, and a high level of turnover among new carers, the sector is facing a real shortage. Obviously, with more people remaining in their homes for longer, this is of grave concern. Some areas, like Canterbury, are said to be in need of community support workers.

Haggie predicts that, given the workforce situation, there is likely to be more focus on restorative care, retaining independence and possibly reduced household management.

“This will put increasing pressure on families,” she says.

Interestingly, family carers are under scrutiny by the Ministry of Health at present, due to the court’s decision about the unfairness of payment for family carers of disabled people. Any policy change as a result of the court ruling and the recent consultation period may have implications for the family carers of older people.

Service Specification

The Ministry certainly appears to be taking an active stance on some aspects of home and community support services, yet funding concerns often undermine the good work being done, as appears to be the case in the Ministry’s redrafting of the National Service Specification for HCSS. The aim of redrafting is to accurately reflect the range and level of services being delivered.

However, while pleased with the content of the draft, Haggie is perturbed by the lack of discussion around the funding of the application of the service specification.

“Significant variation in rates across DHBs means that there is a widening gap between areas where the improved services can be afforded and those where, to a greater or lesser extent, they cannot.”

“Simply increasing service specifications that require greater costs for the same or less funding, while dictating inflexible inputs, is not a viable option for either providers or DHBs,” agrees Titcombe, of Access.

Collaboration the key

It appears any nationally driven policy to support the HCSS sector is undermined by the fragmented, inconsistent, and unclear approach to funding across the country. Meanwhile, the DHBs are trying to do their best with what they are allocated from the Government. Coupled with a growing demand for its services, the sector is almost buckling under the pressure.

No one appears to dispute that consultation and collaboration between providers, funders, and the Government is the way to move forward. Fleming says DHBs should be engaging with the providers within their communities as a part of their service planning and development process. Haggie says there is a need for collaborative contracting. The Ministry appears keen to seek sector consultation on issues like pay rates for family carers and willing to move forwards on some of the recommendations in McGregors’s report. So why have providers, to quote Haggie, “reached breaking point”?

Unless collaboration and consultation take into account every aspect, including – and especially – funding, it appears the sector will be unable to progress to the levels required to support the growing numbers of older people remaining healthy and independent in their homes.


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