With confirmation of poor care delivery in one corner of the sector and allegations of discriminatory pay levels in another, the public cries for more transparency and fairer pay in aged care are getting louder. Change feels imminent, but what shape will it take? By JUDE BARBACK.

The incident that occurred at Malvina Major Retirement Village, where a resident’s daughter found her mother in an appalling state on three occasions since the beginning of June, unsurprisingly attracted Ryman Healthcare just the sort of attention it didn’t want.

It isn’t the first case of its kind, but Ryman, a household name more often found amid phrases like “best performer” and “market darling” in the business sections, was an easy target for the media.

It is, in a sense, uncanny that the Ryman scandal should erupt at roughly the same time as the case brought by aged care worker Kristine Bartlett against her employer TerraNova Homes and Care Ltd for fair pay reached its climax, with the court hearing concluding at the end of June.

The two stories, although both set on the aged care stage, are, in fact, quite different – the issue at Ryman is not one of low pay and the issue at TerraNova is not one of poor care – yet the coincidence of their timing has brought long-simmering concerns in aged care collectively to a furious boil.

Unfairly paid workers and incidents of poor care in juxtaposition to the soaring profits of big corporate players made the aged care sector a sitting duck, a journalist’s dream. It was inevitable a spate of newspaper opinion pieces and Campbell Live docos would emerge, each calling for fair pay, more accountability and more transparency in the sector.

Dr Chrissy Severinsen of Massey University says that each time a case of neglect and substandard care emerges, there are urgent calls to improve the standard of aged care. She says problems such as inadequate staff numbers, increasing workloads and workplace stress, and hurried or delayed care, are often explained by the industry as poor practice and management at individual rest homes, but are symptomatic of problems across many facilities. “But so far, there has been little meaningful action,” she says.

Could these two colliding events collectively provide the catalyst for positive systemic change in aged care, as Severinsen and many others believe is urgently needed? And if so, what shape will that change take?

Passing the buck

Part of the tension hinges on the fact that there just isn’t enough money in the aged care pot to support better staff-to-patient ratios and better pay for its workers. Earlier this year, the Parliamentary Health Select Committee made the decision not to increase the level of funding in aged care and instead encouraged “employees and employers to work together to develop fair rates of pay”. In its report the committee also acknowledged “the complexity of the funding model and the tension between private and DHB providers”.

So with the ball swiftly passed to the sector, and operators making no visible progress with fairer pay levels – and how can they when funding levels are not increasing? – the problem remains.

In her address to the NZACA conference at the end of August, Associate Minister of Health Jo Goodhew acknowledged the Government’s commitment to providing more beds, and to improving dementia care, audit reporting and home-based services. When it came to improving the aged care workforce, she spoke of the $1.2 million for dementia-related training and Voluntary Bonding Scheme – both great initiatives, but nothing of the elephant in the room: the need for more funding to ensure aged care workers are fairly paid.

The Bartlett vs TerraNova case, however, looks poised to turn things around for aged care workers. The Employment Court has ruled that Bartlett’s pay rate of $14.46 an hour may be compared with occupations that are not female-dominated to determine whether TerraNova is breaching the Equal Pay Act. The court also ruled that it is allowed to intervene and set a fair pay rate (note: as INsite went to print, TerraNova had sought leave to appeal the Employment Court’s decision).

Employment lawyer Peter Cullen believes the second finding is significant. “We have not seen the Employment Court or its precursors have the power to impose a pay rate in a collective employment agreement for many years. Of course, under the industrial conciliation and arbitration system which was in force in New Zealand years ago, that is what the court did all the time,” he says.

Interestingly, gender inequality of pay is not thought to be a major concern within the aged care sector. It is reminiscent of when British speech and language therapists campaigned for better pay on the basis of gender discrimination as a means to address their pay concerns. In New Zealand, many are hoping the Bartlett case will ultimately draw attention to the low levels of pay and the more fundamental issue of the disparity in pay between caregivers working in private rest homes and public hospital healthcare assistants. Although there is variation between facilities and between DHBs, typically residential aged care workers are paid around $14–$15 an hour, while their public hospital counterparts are paid around $18–$19 an hour.

Ryman managing director, Simon Challies, is supportive of aligning aged care workers’ pay rates with those of public health care assistants and believes Bartlett’s case is bringing much-needed attention to the issue.

Of course, Ryman and other large corporate providers are better placed to handle an increase in wages than many other smaller providers. Ryman already pays over the odds, and has recently lifted its pay rates by five per cent bringing caregivers’ pay up to around $16–$17 an hour. “We can afford to do it, so we do it,” says Challies.

Others, it appears, would struggle to stay afloat in the face of such a wage increase.

NZACA’s Martin Taylor said that it would cost an extra $140 million a year to lift all rest home caregivers to public hospital rates. This figure is based on those quantified by the Caring Counts campaign.

“That would have a major impact on the sector. You would instantly find a majority of the sector would be close to insolvent,” says Taylor.

This is not understating the problem.

If Bartlett’s case results in a lift in wages for all aged care workers and the Government continues to take its hard line on funding, the repercussions for the aged care industry could be catastrophic.

Challies says that if the Bartlett case results in a lift in wages, then the DHBs will have an obligation to fund it. But is it that straightforward?

Clause A23.1 of the Age Related Residential Care Services Agreement between DHBs and providers implies that the agreement may be varied when either party considers that changes occurring as a result of either a change in law, or significant changes in the health sector environment or costs that are beyond control will have an impact on the provision of services.

However, the providers INsite spoke to feel this clause is of little comfort. While Minister Goodhew says she will consider the findings when the case is decided, she is unable to comment on the case while it is still before the court. This also does little to reassure providers, who must continue to play the “wait and see” game until a verdict is delivered.

Taylor says that although the court might set the pay rate, there is no legal obligation for Government and DHBs to fund providers.

“There is certainly a moral obligation, and perhaps a financial imperative, but no legal obligation,” says Taylor.

“I don’t think we should confuse legal obligations with moral or economic arguments for concluding that central government will fund an increased cost structure in a timely manner,” agreed one provider.

“I would love to pay my staff more,” says another, “but we’d go under if we did.”

Concerns have also been raised about how Registered Nurses might feel, with the bar lifted for caregivers – for whom there is no requisite for training – when RNs have completed years of study to achieve their qualifications.

And what are the repercussions beyond aged care? If residential aged care workers realise their hopes for better pay as a result of the Bartlett case, will it then set a precedent for any industry in which the majority of workers are female to use the Equal Pay Act to compare their wages with those in a male-dominated industry with similar skills and to use this as leverage for negotiating a pay rise?

Beyond gender equality, could the domino effect of such findings potentially set a precedent for all low-paid workers in sister industries to argue for better pay? While this is obviously an ideal scenario for those workers currently faced with the harsh reality of living off a minimum wage, it doesn’t take an economist to understand why the Government is taking a rather cautious approach on this issue. You can almost feel the Ministry holding its breath as the Bartlett case plays out.

Of course, an unlimited pot of Government dosh available for such decisions would make life easier. When discussions turned to introducing a living wage across the Government sector during the bid for Labour Party leadership, Shane Jones said that he “will not write cheques that we cannot cash” – further indication that such measures cannot be made easily in the face of a sluggish New Zealand economy. Put plainly, can New Zealand really afford to up the wages of low-paid workers? Whether we should, is a different – and easier – debate. Whether we can is a more tenuous argument, and one that the taxpayer looks set to resolve.

Profits vs peanuts

The recent criticism suffered by the Anglican Church is a good example of why Government funding is so critical. The church recently came under fire for paying its aged care workers around the average of $14–15 per hour instead of the living wage of $18.40 per hour, a rate which they have publicly endorsed. The church claims its hands are tied, as residents of its residential care facilities are funded through the Government’s residential care subsidy.

Unless funding is increased, or they charge their residents much more, it cannot raise its pay rates.

The Methodist Church of New Zealand claims it would go insolvent if it adopted the living wage policy.

“We are not in a position to be able to pay everybody the living wage because there is not enough funding in the government contracts; some things are just out of our control,” general secretary David Bush told the Sunday Star-Times.

If the churches are getting flak, you can imagine the sort of criticism dished out to the big corporate players. Certainly, the low wages of caregivers continue to sit uncomfortably beside the soaring profits of some of the better known commercial aged care providers.

News of the Malvina Major village scandal broke at the same time as Ryman reported improved first quarter trading and shares at a near record high as well as the purchase of four new sites in New Zealand, prompting critics to question whether the operator’s focus was on profits or providing quality care.

“With around two-thirds of aged residential care facilities operated by a small number of large national and multi-national for-profit companies, we need to question whether the care of the elderly is focused on their needs, or on complying with the routines and profit margins of providers,” says Severinsen.

“Current economic imperatives promote cost-cutting and dangerous understaffing in the provision of care. Policies are applied in a punitive fashion, rather than being focused on improving the quality of care. Nurses, caregivers and managers find it very difficult to care for our older people when buried under the weight of market and regulatory forces.”

However, many disagree with the logic that an aged care provider that is interested in being profitable cannot be focused on looking after its staff and delivering high quality care as well.

In response to a scathing opinion piece by Sue Kedgley in the Herald earlier this year about how the profits of Ryman,

Metlifecare and Summerset did not trickle down to caregivers on around minimum wage, professional investor Aaron Bhatnagar came to the defence of Ryman and other large operators.

“Not only do Ryman pay above-average wage rates, they also have a staff participation scheme for shareholding in Ryman, and they encourage further training and education for staff, some of whom have no formal qualifications beyond the most basic school certification.”

Poor care: a “precursor to change”

But if the pay is better than most, and the training is happening, then why the epic fail at Malvina Major village?

The complaints made against the facility were confirmed by the findings of an unannounced inspection carried out by the Ministry of Health at the end of July.

Managing director Simon Challies says his staff at Malvina Major were “shell-shocked” by the Ministry’s spot check which came shortly after the Wellington earthquakes. He says understandably they didn’t cope well with their responses and the audit findings reflected that.

The audit report concluded there was “failure to fully comply” with eight health and disability services standards. Audits measure compliance against a total of 57 standards. This particular report found complaints often went unregistered, care plans were inadequate, there were breakdowns in communication between staff, and a lack of clinical leadership.

Challies takes on board the findings and says there is a real effort being made to improve documentation and other aspects raised in the recent audit. However, he is mindful that the failings should be viewed in the context of all the good work that is being done.

“We’ve got to be careful we don’t throw the baby out with the bath water. We don’t want to go around pointing the finger at the people who are, for the most part, doing a good job.”

Even though the complaint and recent audit has taken its toll, he welcomes the practice of unannounced inspection checks from an outside party following a complaint. The findings may be difficult to swallow, but Challies says he is viewing it all as a “positive precursor for change”.

His words echo those of Health and Disability Commissioner Anthony Hill, who in his talk to NZACA conference attendees, made the curious point that he hoped the number of complaints would increase in aged care, as they were helpful in raising the overall level of care. “I live in the margins where it doesn’t go so well,” Hill said, “If we improve things here, it will improve the whole system.”

Routine audits: useful or not?

As difficult as they may be, incidents like those at the Malvina Major village appear to reinforce the view that unannounced inspections are more effective than routine audits.

Challies points out that Ryman conducts its own six monthly audits in addition to the routine Ministry audits.

While in theory this sounds commendable, the fact that the incident still happened in spite of two sets of auditing procedures raises the question of how useful routine audits really are.

Challies counters that the Ryman audits look at 120 target risk areas and it is not feasible for these audits to address the individual care for each resident, and consequently, mistakes occasionally do happen.

He says he has been reluctant to speak publicly in any detail about the health and condition of the resident at the heart of the Malvina Major incident, out of respect for her and her family. But perhaps his reticence on the subject conceals some of the difficult realities and challenges for both the recipients and givers of care in rest homes? Perhaps this is why some of the unspoken truths surrounding aged care remain unspoken?

The usefulness of routine audits has been questioned in the past. In 2009, a Consumer researcher rang the Ministry posing as a relative of someone looking for rest home care and asked for copies of audit reports for rest homes in the Wellington area. They were told by a Ministry staff member that the reports were likely to be of little help and suggested they contact Age Concern for advice instead.

While unannounced inspections have since been implemented, these generally occur only when a complaint has been raised. By contrast, the United States audit system operates on a spot-check basis, with full transparency and heavy financial penalties for nursing homes that don’t meet the standards. In the US, nursing homes are given a rating of one to five stars based on state-conducted health inspections, nursing and physical therapy staffing, and quality of medical care. The ratings are then posted on Nursing Home Compare, a website run by the federal Centers for Medicare & Medicaid Services.

Would New Zealand’s residential aged care sector benefit from such a heavy-handed approach at making rest homes accountable?

To introduce such a culture of fear, defence and rivalry, is unlikely to aid the sector here. One only needs to look at the controversy sparked by the league tables introduced to the education sector, to tell that publicly rating and ranking facilities is perhaps unwise.

However, the question of whether the Malvina Major village incident could have been prevented by regular spot checks and making these audits more accessible to the public is somewhat more open to debate. Many believe that holding aged care providers to public accountability would help keep them more focused on delivering better care.

Increasing transparency and accountability

Minister Jo Goodhew recently confirmed that from November 2013 the Ministry of Health will trial for six months publishing full audit reports alongside the summary audit reports. Previous audit summaries and inspection reports will be kept online for up to seven years, allowing people to see what progress has been made and if there are any ongoing issues.

“The full audit 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 look at the reports when the full information is available,” says Goodhew.

The change marks quite a departure from the current situation, whereby the Ministry of Health posts only the most recent audit summary for a facility on its website, with consumers encouraged to seek the full audit report via the Official Information Act. Goodhew confirms that since 1 January 2012, the Ministry has received just 12 requests under the Official Information Act for full audit reports.

The general feeling from the public, as reflected by mainstream media, is that the audit summaries, particularly their lack of relevant information and history, are inadequate.

Consumer editor David Naulls believes the summaries “don’t provide sufficient details of homes’ shortfalls or the actions required to fix them”.

An opinion piece in the Dominion Post was similarly scathing, describing these summaries as “almost useless”.

“They include vague catch-all remarks on six different areas, along with a colour-code which varies from red (bad) to blue (very good). The body of the report is vague and uninformative, and often reads as though it was written by the rest home itself.”

Naulls also berates the Ministry’s “clean slate” policy, whereby unannounced inspection reports are published and then removed when the home has its next audit. He says by only making the most recent summary report available means it is difficult to tell whether the facility has a history of problems.

“Full information is fundamental to the efficient operation of markets; yet consumers are being denied the information that allows them to make an informed choice about the respective quality of rest homes. This must end.”

Fortunately for Naulls and other campaigners for more transparency, Goodhew’s announcement means it is about to end.

However, enthusiasm for the new measures are not so readily shared among aged care providers. Many are sceptical about the Ministry’s decision, particularly when the DHBs are not subject to the same scrutiny, although Goodhew says DHB audit summaries will also be available online from November.

Challies admits he has “some trepidation” about the Ministry’s decision to make full rest home audits available online.

He points out that routine audit inspections look at approximately 247 criteria within the 57 health and disability standards, with which facilities are expected to comply. The average number of failings across the industry apparently sits at around 15 (out of 247) and the average across Ryman villages is four. There is a tendency for the public and the media to focus on the four things they are doing wrong rather than the 243 things they are doing right.

While the vast majority of aged care providers do their very best to deliver quality care to their residents and are justifiably proud of their efforts, few providers would be confident to call themselves completely immune from a slip in standards. And the public are bound to pounce on these slips at the expense of all the good work being done.

However, if a little more transparency leads to a little more accountability, and a little more accountability results in fewer incidents of substandard care, this can only be a good thing.

Challies says the other issue is that the audits are a measure of a facility’s compliance and do not necessarily reflect what residents and their families want. Compliance and customer satisfaction are two different measures and the audits only tell half the story.

He says 90 per cent of residents of Ryman facilities and their families are satisfied with the service provided by Ryman and he suspects it is this high customer satisfaction rating that has prevented much fall-out into other Ryman villages following what happened at Malvina Major village. While providers typically feedback the results of customer satisfaction surveys to their residents and families, the sector has no plans to make this sort of information public as it does with facilities’ levels of compliance.

Like it or not, changes to the availability of audits are coming. In many ways it is a simple step for the Ministry to make, in light of the growing demands for rest homes to be held more publicly accountable.

A solution to the discontent at the coalface, as brought to the public eye by Judy McGregor’s Caring Counts campaign and Kristine Bartlett’s case, may not be so easy or inexpensive.

It feels like the ground is moving under the residential aged care sector. Something will have to give, but what?


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