Underinvestment and delayed reform have prompted the Aged Care Association to push for new policies to strengthen the local sector.
The Aged Care Association said the closure of Enliven’s Reevedon Rest Home in Levin reflects the cumulative impact of years of underinvestment and delayed reform in aged residential care, with older New Zealanders and their families increasingly carrying the consequences.
"This is not a surprise. It is the predictable result of a system that has been under sustained pressure for many years," said Hon. Tracey Martin, Chief Executive of the Aged Care Association.
"For more than a decade, successive governments have been warned that the funding model does not reflect the true cost of care. Multiple reviews have identified the same issues, yet meaningful reform has continued to be delayed."
Reevedon is a 40-bed rest home made up entirely of standard rooms, the type of care relied upon by older New Zealanders living on superannuation alone.
"These are exactly the beds New Zealand cannot afford to lose," Martin said.
"Standard room care is essential for older people who do not have the financial ability to pay premium accommodation charges, and yet these are increasingly the beds under the greatest pressure."
The Association believes that the impact of long-term system pressure is now being felt directly by older New Zealanders, their families and local communities.
"When homes like Reevedon close, the pressure does not disappear. It shifts elsewhere," Tracey Martin said.
"It shifts onto families trying to find suitable care, onto hospitals struggling with discharge delays, onto primary care services, and onto communities trying to support older people with increasingly limited options. For too long there has been an assumption that the system would continue to absorb this pressure. That assumption is no longer holding."
The Association said the closure reinforces the need for aged residential care to be recognised as core health infrastructure. Martin said that aged care is not separate from the health system and is, in fact, a fundamental part of it.
"If aged care capacity reduces, the consequences are felt across the entire health system. When older people cannot access the right care at the right time, the pressure inevitably shows up elsewhere, particularly in hospitals and on families already under strain."
Martin added that the current funding model was increasingly disconnected from the realities of modern aged residential care, and that residents are entering care later in life with significantly more complex clinical and care needs than in the past.
"At the same time, the costs of delivering safe, high-quality care have continued to rise, while funding has not kept pace with those changes," said Martin.
"There is also very limited ability within the current model for providers to reinvest in ageing infrastructure and facilities. Over time, even well-run homes come under increasing pressure."
In response to the closure of Enliven’s Reevedon Rest Home, the Aged Care Association is now calling for progress on a three-stage reform programme.
The first step is to stabilise the system, establish an aged care infrastructure investment fund, and introduce an admission and discharge payment. This is followed by sustaining the system through fair funding, a move to evidence-based funding for clinical care, and implementing a split funding model to improve transparency for residents and families. Finally, the Association wants to make the system investable and agree on a sustainable operating margin.
"Without the ability to reinvest in facilities and infrastructure, closures like this will continue over time."
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