There’s no place like home

Many of us have elderly relatives and friends whom we call in on regularly at home to offer help and companionship.   Not only do these visits signal our love to those we care about, but they can be a crucial factor in allowing the elderly to remain in their own home.   With supplementary home-based support services costing far less than rest home subsidies, this informal support also helps balance the Government’s books.   In fact, home-based care is so cost-effective that an elderly person is likely to be forced into long-term residential care for clinical reasons, long before the move becomes the most economic option.

Older people generally prefer to live in their own homes (including private units in retirement villages) for as long as possible because it allows them to enjoy familiar surrounds and better maintain social networks.   This wish is not difficult to achieve for those who have recently retired, with around three-quarters of those aged between 65 and 74 years living at home without assistance, however about half of those aged 85 years or more receive home-based support.

Public funding for home-based support services is provided primarily by DHBs, although Work and Income also offers disability allowances.   DHB-funded services include personal care (help dressing, toileting, and bathing), preparing meals, cleaning, therapy, and support for informal carers (including respite care).   In 2010, DHBs spent $224 million providing such services to the elderly, at an average cost of around $3,000 per person.   On top of this funding, the elderly can receive a disability allowance, of up to $59.12 per week (up from $55.88 in 2010), which can be used to pay for things such as doctor visits, gardening, and clothing.  

Annualising the disability allowance and adding it to the cost of DHB-funded services shows that the annual average total cost of providing publically-funded home-based care services in 2010 was approximately $6,000 per person.   In contrast, a person living in a residential care facility would have received as much as $43,500 per year in subsidies from the Government.   Clearly, for an elderly person requiring an average level of care, there is a distinct cost advantage in supporting their desire to remain in their own home for as long as possible.

But what about the person who needs an above average level of care? After all, they would be the one most likely to be considering moving into a residential care facility?   Well, it is likely that the welfare needs of such a person would reach a critical point, where a clinical decision was made to put them in an around-the-clock care residential care facility, long before the cost-effectiveness of providing them with additional home-based care was called into question.   This assertion is based on the fact that one could receive up to 32 hours a week of home care (assuming each hour was billed at the average hourly cost of DHB-funded care in 2010), as well as the disability allowance, before paying rest home subsidies became cheaper for the Government.

Along with the financial advantages of home-based care, it is also important to consider the social side of providing such services.   Home-based care is designed to ensure that the elderly can comfortably achieve day-to-day tasks necessary for maintaining their health and home.   However, this care is most successful for those elderly who have a network of family and friends who check-in on them and help monitor that the care is meeting their specific wants.  Unfortunately, this support is not always so forthcoming as some families are more interested in their inheritance, which they know will largely be protected by generous asset testing thresholds should their elderly relative be forced into a rest home.

The consistency of services and accountability of home-based care providers is another important social consideration.   Although, in 2003, Standards New Zealand produced a standard (NZS 8158:2003) to establish minimum requirements for home-based care providers, not all DHBs require that providers comply with this standard.   This means that the quality of service delivery between the regions may differ.   In stark contrast, residential care facility operators face a uniform set of standards across the country.  

A July 2011 Auditor General’s report identified this lack of consistency as a key shortcoming of the current elderly care system.   The report recommended that the Ministry of Health make NZS 8158:2003 mandatory for all providers of home-based care to ensure there is a standard quality of service delivery.   Despite this, there is little evidence of significan tprogress on the Auditor General’s recommendation to date, but it is to be hoped that the Ministry still intends to act on this advice.   We need to be sure that the quality of home-based care for the elderly does not depend on the DHB under which someone lives.   Furthermore, even if the costs of complying with the standard lead to modest increases in the cost of home-based care service delivery, the economic case in favour of supporting the elderly at home is so compelling that it should be the Government’s default choice.

Enjoyed this article?

You might like to subscribe to our newsletter and receive the latest news from Infometrics in your inbox. It’s free and we won’t ever spam you.