Federal government blocks new nursing home provision in NSW and elsewhere

There are already lots of frail elderly taking up hugely expensive public hospital beds because they have nowhere else to go and the knowall socialists in Canberra are trying to make that problem worse??? Nathan Rees and the other Premiers affected should be making Rudd's ears red until he backs down on the stupid regulations dreamed up by his subordinates

The state's main aged-care home operators have boycotted the Federal Government's annual offer of nursing home bed licences, leading some to predict a significant shortage of places in the near future. "In a few years' time we could be back to the bad old days when people were on huge waiting lists for months," said Rod Young, chief executive officer of the Aged Care Association Australia. The operators, including the non-profit and church agencies, say it is uneconomic to build new nursing homes - now known as high-care facilities - under the Federal Government's funding arrangements that prohibit nursing home bonds.

The Government offered licences for 7663 new residential aged-care places across Australia, 2100 of them in NSW; applications closed last month. The number of licences offered each year is based on a strict formula of predicted need. The state's biggest non-profit operator, UnitingCare Ageing, applied for none of the new bed licences; nor did the other big providers, Catholic Healthcare, Illawarra Retirement Trust and Anglican Retirement Villages. Baptist Community Services applied for only a few licences in order to finish a project.

The managing director of Catholic Healthcare, Chris Rigby, said this would prove a "watershed year" in aged care. "My sense is that the number of providers who have applied for high-care bed licences will be minimal," he said. "From talking to our bankers I understand they won't lend for high care on greenfield sites because they can't see how it will work." He said Catholic Healthcare had handed back some approvals it had received in a previous round: "We just can't make the economics work."

The private company Amity has applied for 350 licences. Its chief financial officer, Peter Forsberg, said: "It's barely economic but we had already secured the land." The director of UnitingCare Ageing, Gillian McPhee, said it cost about $200,000 for each new high-care bed in metropolitan Sydney. But the Federal Government allowed operators to recoup only $120,000 for capital funding through a capped accommodation charge to residents of $26.88 a day. "Aged-care providers are not able to make sufficient margins to make it sustainable," she said.

The Federal Government has made clear it will not introduce bonds for entry to high-care facilities, although bonds are permitted for low-care facilities. Critics say the frail elderly should not have to sell their house to finance entry to a nursing home. The issue proved politically sensitive for the Howard government. Some operators are now lobbying for substantial increases in the daily accommodation charge, little changed in real terms since John Howard introduced it in 1997.

Paul Bradley, general manager for residential care for Anglican Retirement Villages, said it was the first time in the past eight years the organisation had not applied for any residential bed licences, even though it had building sites available. Nieves Murray, chief executive officer of Illawarra Retirement Trust, one of the nation's biggest community providers, said the organisation had several sites on coastal NSW, but the capital cost problem was a main reason it had not applied for licences. She said unless the Federal Government tackled the funding problem, the non-profit sector would not build new homes, leaving the field to private operators and "you may end up with a situation like ABC [child care]".

A spokesman for the Minister for Ageing, Justine Elliot, said that over the next four years funding for aged and community care would reach record levels of more than $41.6 billion, $29.5 billion of that on residential care. It would provide an average of $43,000 for every aged-care resident. The Department of Health and Ageing is sifting through the applicants. However, several agency heads told the Herald they believed the offer would be undersubscribed in NSW, Victoria, Tasmania and Western Australia.


Posted by John Ray. For a daily critique of Leftist activities, see DISSECTING LEFTISM. For a daily survey of Australian politics, see AUSTRALIAN POLITICS Also, don't forget your daily roundup of pro-environment but anti-Greenie news and commentary at GREENIE WATCH . Email me (John Ray) here

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