November 26, 2020
At the New Zealand Aged Care conference held recently in Wellington, two themes resonated particularly strongly with the Spritely team. Following two days of presentations from industry leaders and countless conversations with hundreds of hard-working delegates, we were left in awe of just what a huge role the aged care industry plays in New Zealand’s health system. In addition, we learnt just how challenging the current environment is for resthome operators and their staff.
Chairman of the Aged Care Association Simon O’Dowd opened the conference with a speech that reinforced the importance of resthomes, which no doubt caught the attention of the government’s new Minister of Health.
We learnt from Simon that there are now more than 40,000 resthome beds in NZ, more than 3 times the 13,000 beds available across all the DHB’s combined. This means that resthomes play a hugely important role keeping hospitals free of older New Zealanders needing long-term care. This, in turn, frees up hospital beds for the rest of the population.
Not only is the industry saving the Ministry of Health a lot of DHB bed space, it’s also saving them a lot of money. An occupied resthome bed costs DHBs around $280 per night (paid in the form of a residential aged care subsidy). This seems like very good value when compared to the average cost of one bed night at a local DHB, which various estimates put at around $1,200.
Despite the obvious and crucial role of the aged care industry within New Zealand’s health system, a number of factors make it a very challenging sector to operate in. Overheads have been increasing and the cost of care has jumped significantly over the years, but the residential aged care subsidy has not been increased sufficiently to compensate for this.
In response, some operators have built, rebuilt or renovated their facilities to create larger rooms and premium facilities, for which they can charge extra. However, not all operators can afford to do that, especially those with older facilities that require greater investment.
Improved technology has increased the efficiency of the workforce. However, many facilities struggle to keep staff members because the DHB’s offer higher rates of pay, despite many of them operating in deficit. A resthome that operates in deficit goes out of business, and if that should happen to too many of them, then pressure on the health system will continue to increase. Our health system is already suffering from woeful underinvestment over many years which affects the quality of healthcare New Zealanders receive.
A lot of those operators who added premium services did so by either rebuilding or significantly renovating their facilities to increases room sizes and improve the features in each room/suite. The capital cost of doing this might put it out of reach for many operators but that doesn’t mean they can’t add new services that earn a premium.
There is growing demand in New Zealand for telemonitoring as a service. At a basic level it already exists in the form of medical alarms which, for most people, are fully funded by the Ministry of Social Development. However, we are now seeing a growing number of people who will electively pay for an extra level of monitoring over and above the safety afforded by medical alarm companies.
Typically, these are people who have just suffered a health scare and have been discharged from hospital or they have recently had an operation and would like a nurse to check in on them on a regular basis.
Some people see telemonitoring as a cost-effective way to delay moving into a resthome, especially if they have not qualified for the residential aged care subsidy. They (or their next of kin) are happy to pay a weekly fee, which is relatively low when compared to resthome fees, for a service that includes:
We expect a growing number of operators to provide this kind of service both within retirement villages and out into the community. Spritely’s technology has made this hugely efficient and very affordable.
Resthome operators can now add low cost/high margin telemonitoring care without needing to significantly grow their workforce. Some industry leaders we’ve spoken to, estimate a single registered nurse could provide telemonitoring services for between 100-200 clients.
This will vastly improve utilisation of the medical workforce and provide daily nurse oversight to people without them needing to move into a resthome.
Contact us now if you want to add a telemonitoring service to your aged care or retirement village business next year.