In an effort to boost occupancy levels and compete with larger operators delivering a broader continuum of care, smaller residential aged care facilities are increasingly providing hospital level care at the rest home level of funding. Without policy and funding intervention, are our smaller facilities sustainable? By JUDE BARBACK.

Residents and their families are devastated at the recent announcement that Matamata’s Rawhiti Lodge is closing.

“It has been devastating for them,” says manager Hazel Lamberth, of the residents who now must be relocated to other facilities. “It is as emotional for them as it was for them when they left their family home to come here.”

Rawhiti’s closure has nothing to do with quality of care; on the contrary, the home received a “perfect audit” in May, confirming what Lamberth and her staff knew already – that they offered an excellent service to residents. No, Rawhiti’s closure was symptomatic of the problems affecting many small rest homes around New Zealand.

Indeed, Rawhiti is not alone. Other small rest homes around the county are also closing their doors. Among them, is Lady Ascot Rest Home in Auckland. Closing the facility was a “heartbreaking decision” that has left its residents and their relatives in tears, according to providers Monica and Suren, writing in the June 2016 edition of e-newsletter Jelica’s Link.

Why are smaller facilities like Rawhiti and Lady Ascot shutting their doors?

Small rest homes are not struggling in terms of the care they provide – if anything, the care is more individualised to the needs of their residents. They’re not struggling in terms of their food – smaller rest homes often cater for differing tastes among their residents without too much hassle. Not in terms of their atmosphere – a small number of residents means they often feel part of a family. Not in terms of activities – a smaller facility can better tailor its activities to what residents want to do.

Yet, many are struggling with low occupancy levels and to make their funding stretch to meet all their costs.

The squeeze on rest home level care

New Zealand Aged Care Association chief executive Simon Wallace says he frequently hears concerns about occupancy levels from providers. He says the rising acuity levels of people entering residential care are partly to blame.

Indeed, people entering New Zealand’s rest homes are more frail than ever; acuity levels are increasing.

The Ministry of Health makes it clear that a needs assessment must show a person as having “high or very high needs, which are indefinite”. Further, the needs assessment – conducted by a DHB or NASC (needs assessment service coordination) agency – must determine that the person cannot be safely supported within the community.

Consequently we find ourselves in a position where our home and community support service providers are stretched and our smaller aged care facilities are struggling to fill their rest home level beds as people are remaining in their homes for much longer. While needs assessments still result in people requiring rest home level care, it is often only a short time until a further needs assessment is required, resulting in a move to a higher level of care.

Victoria Brown of Care Association New Zealand (CANZ) says smaller homes suffer as a result of the Government’s emphasis on keeping people in their homes.

“You need look no further than the Health of Older People Strategy, where the focus is to obviate the risk of older people accessing residential care. Though no one has a  quibble with keeping people at home for as long as possible, there is a consequence which impacts severely on the smaller facility – the client group is so fragile that when they can access residential care many go straight to private hospital care.”

It was this situation which contributed to the closure of both Lady Ascot and Rawhiti Lodge. Rawhiti was licensed for 24 residents and had just 15 at the time of closure. At one stage there were 13. It is contracted to deliver Stage 2 rest home level care, offering a narrow window between independent living and hospital level care.

Lamberth believes assessment thresholds of frailty and acuity are increasing and people are remaining longer in their homes, so that by the time a needs assessment results in a rest home referral, the resident is actually on the cusp of needing hospital-level care.

Lamberth says they have had three residents in the last year who have been assessed in their homes as needing stage 2 rest home level care, only to find that they need to be reassessed and transferred to hospital-level care at a different facility within a few months.

Northland DHB’s Sandie Kirkman, who sits on the Needs Assessment Service Coordination Agencies (NASCA) Executive, confirms that clients are now more of a higher acuity and are generally entering residential care when they are requiring a higher level than aged residential rest home level, such as aged residential hospital level, secure level or psychogeriatric hospital level.

“This is predominantly because there is more availability of home care support services that are able to assist people to live in their own home longer, particularly if they have a carer at home,” says Kirkman.

“Carer burden is reduced with the assistance of home care agencies so they are likely more able to keep their loved one at home. There is also an increase in those clients assessed as very high needs – in other words they would qualify for aged residential hospital level – who also continue to remain at home rather than enter care.”

However, Lamberth believes that remaining at home for longer is not necessarily the best option for people with high needs, and they are likely to receive better care in a rest home. She says those remaining at home are more likely to suffer from social isolation.

Consequently, it is difficult for smaller rest homes to compete with larger facilities in the area that offer a continuum of care.

Mitchell Court in Tauranga is another rest home facing similar issues. It is a 35-bed facility, but has low occupancy.

Manager Linda Rodrigues says smaller homes like Mitchell Court often get forgotten about or overlooked as all the attention tends to go to the larger facilities. She believes smaller homes play an essential role in providing residential care in their communities.

“It is very important that we survive,” says Rodrigues, speaking about smaller facilities in general.

The role of DHBs and NASCs

It would appear those carrying out the needs assessments have a role to play in this, when perhaps they shouldn’t. A guidance paper that has been circulating since 2010 outlines where the responsibilities of DHBs and NASCs lie, making it clear that they should not be directing prospective clients towards one facility over another.

However, Wallace says that anecdotally there was some evidence of DHBs and NASCs advising clients to only consider facilities that offered hospital level care. These concerns prompted Chris Fleming, DHB Lead for Older People’s Health, to write to the DHBs and NASC portfolio managers in April this year on behalf of the ARRC Joint Steering Committee managers, reminding them of their responsibilities towards prospective clients and that they shouldn’t be suggesting certain facilities over others.

Of course, when taking into consideration the increasing levels of acuity for eligibility into residential aged care, the DHBs and NASCs can hardly be blamed for pointing out to people who might be requiring hospital level care very soon that they should probably consider a facility that offers hospital level care. It must be difficult for assessors to remain completely neutral about all facilities when some are a better long-term fit for people than others.

Kirkman says one of NASC’s core roles is to provide all options to the clients and carers so that they are able to make an informed decision.

“There are many other sources available for clients to seek advice from when choosing a facility. Needs assessors are able to point clients to these resources for assistance.”

Kirkman says that these include the Eldernet services resource via a booklet Where from here and their website, the Seniorline 0800 number and local advisory services, including Age Concern. She says clients may also seek the opinion of a health professional, such as their GP, the ward doctors, nurses and social workers, when choosing a facility.

Is hospital level care becoming the new rest home level care?

The real problem is the squeeze on rest home level care. It would appear that hospital level care is fast becoming the new rest home level care.

According to research led by Dr Michal Boyd and published in the Journal of American Geriatrics Society, in the last two decades, the proportion of older adults living in residential aged care facilities has decreased in many countries due to increased community care, eligibility requirement changes, and other factors: “These trends have resulted in a resident population with steadily increasing dependency and healthcare complexity, but the model of care in many residential aged care facilities has remained relatively unchanged.”

Wallace says members have informed him that due to the increased acuity levels of people entering residential care, they find themselves providing care that is more aligned with hospital level care, but funded at the rest home rate.

The problem – and it’s a good problem in many ways – is that residential aged care facilities of all sizes are genuinely committed to delivering top quality care to their residents regardless of the level of funding. As a result, it is common for facilities to provide a level of care beyond their subsidy level.

Mitchell Court is contractually allowed one hospital level bed as well, although this – just like the palliative care that the home provides on occasion – is subsidised only at the rest home level fee.

The NZACA is calling for a distinct palliative care supplement in answer to the fact that many are providing this care by default, without the necessary funding.

It seems that unless clearer definitions and corresponding funding levels are developed, the Government is likely to continue to take advantage of facilities’ willingness to deliver care beyond their means.

Wallace agrees the funding model needs to be carefully looked at as well as what defines the various levels of care.

“There is no silver bullet to this,” he says.

Indeed it is difficult to effect change based on anecdotal evidence alone. In time, interRAI is likely to provide some answers.

“When interRAI data is made available, it will give us a much better idea of what’s going on and will help inform policy,” says Wallace.

Are smaller homes sustainable?

But can we afford to wait in hope that things will change?

As things stand, the sustainability for smaller facilities is of great concern. Small rest homes still bear the same types of cost as their larger counterparts. The costs associated with interRAI, compliance with existing and new legislation, auditing and wages are just some of the many components that facilities need to pay out of their meagre government subsidies.

With low occupancy levels compounding this, many smaller facilities find themselves in a financially grim position.

Lamberth says Rawhiti’s operation wasn’t financially viable for over a year, before it eventually closed.

Wallace is adamant that we need to continue to offer resident choice.

“Many smaller facilities offer fantastic care and play a vital role in their communities,” he says. “I keep reminding DHBs that we need to provide all kinds of options for people.”

In an effort to recognise the good things accomplished by smaller facilities, the NZACA is introducing a new award category to this year’s Excellence in Care Awards – the Invacare Small Operator Industry Award.

The managers of Lady Ascot believe that if things continue in the current vein, we will regret the loss of our smaller rest homes.

“My greatest regret is that the government is oblivious to the problem that is being fostered by their policy and while the politicians and the DHB officials are languishing in their push for ‘bigger is better’ we, wearing our hats as taxpayers, will be required to pick up the huge costs of a correction when a shortage of rest home beds will become imminent following the gradual closure of small rest homes,” they state in the recent Jelica’s Link e-newsletter.

Brown agrees that smaller rest homes are certainly needed.

“It is not just that these homes are part of a community enriched by their presence, nor that they provide employment to tens of thousands of caregivers, nor that they provide a real option of care in a home. It is because of the vast numbers of aged people who are predicted to need care.

By 2026 the estimate is that up to 20,000 more residents will need residential care. Home care services express concern that they struggling to cope with demand and informal carers are buckling under the strain.”

Indeed, no one wants to see the small rest homes disappear. Like our small schools and corner shops, they help define our communities. But if we want to keep them, we are going to need more than an award and reminder letters. We are going to need policy and funding to keep pace with the realities faced by our smaller care facilities.


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