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Aged Residential Care (ARC) funding model review

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Review process

Review outcome

Next steps 

The Review Report

Media Release 

New Zealand’s aged residential care sector has transformed since the government’s nationwide funding model was put in place over 20 years ago.  While the elderly population is growing steadily, people are generally going into care at a later age, and they frequently have complex needs involving multiple long-term conditions and disability-related dependencies which require specialised, around-the-clock care.

In late 2017, the Ministry of Health and the 20 District Health Boards commissioned a Review of the Aged Care Funding Model from Ernst and Young (EY), to see if the model was keeping pace with the changes in the sector, and to look at whether it would be able to support the needs of the sector in the future.  The Review focussed on the way in which available funding is allocated.


Review process

The Review involved extensive stakeholder consultation, a study of funding models in other countries, analysis of data about older peoples’ needs, use of aged residential care, trends in aged residential care capacity, and costs of service provision.  Advice on the Review as it progressed was provided by a cross-sector steering group including representatives of aged care providers, consumers and unions as well as DHBs and the Ministry of Health.  


Review outcome

The Review was completed in August 2019. It makes seven primary recommendations, including use of a new funding model more directly linked to individual resident needs, and lists another 16 matters that could be further considered.

The recommended funding model would be based on the interRAI clinical assessment approach currently used in New Zealand to support the development of care plans in aged care residential facilities. The funding model would be linked to interRAI assessments.  

Link to interRAI webpage 


Next steps

The Ministry of Health and the 20 District Health Boards accept the Review recommendations have merit and warrant further consideration. Considerable work is needed to fully understand the feasibility of adopting the recommendations, including health system and cost implications and any legislative changes that may be required. The Ministry and DHBs would work closely during these next steps with aged residential care provider representatives, and other organisations in the aged care and wider health care sectors.

The Review Report 

A copy of the report is available to download below. 

Aged Residential Care Funding Model Review [14mb]

September 2019



Media Release 

Review provides valuable insights into funding model for aged residential care [149kb]

September 2019

A new report into the funding model for aged residential care provides valuable insights into how government could fund this sector in the future, say the Ministry of Health and the country’s 20 District Health Boards.

 

For more information about the Review please contact:

fmr.arc@tas.health.nz 


 

Healthy Ageing Strategy

December 2016

NZ Health Strategy 2016

April 2016

Improving the lives of people with dementia

September 2014

Aged care demand model (2018 update) [44Mb]

March 2018

Last updated: 4/9/19