About the Aged Care Funding & Service Models Review

The Aged Care Funding and Service Models Review is one of the commitments under Te Pae Tata to support healthy ageing. 

The review aims to improve the sustainability of services and ensure equity of access and outcomes. 

Multiple challenges are facing older people, whānau and their communities as well as across the aged care sector, including providers, workers, needs assessors and funders.  

Some examples of these challenges include an aging population, financial pressures, workforce shortages and pressures, variable access to services, inequitable outcomes, lack of culturally appropriate services and more people choosing to stay living at home as they age. 

The sector needs to be supported to respond to such challenges to be fit-for-purpose for the future and well positioned to deliver efficient, high-quality services that respond to people’s varied and changing needs. 

A review of the aged care and home and community support services funding and services models is a key component of the response.  

Our future aspiration is for an aged care sector that balances the need for a cost-effective system with a high-quality continuum of care that is: 

  • aligned to Te Pae Tata and the Pae Ora (Healthy Futures) Act 2022 
  • consistent with the principles of Te Tiriti 
  • person and whānau centred 
  • financially sustainable  
  • effective at reducing avoidable hospital admissions and bed days  
  • nationally consistent while meeting the needs of local communities 
  • delivered by a competent workforce that is valued and supported. 

Collaboration across Te Whatu Ora, Te Aka Whai Ora, and Manatū Hauora will be critical to this review alongside appropriate stakeholder engagement.  

The review will identify challenges and opportunities across the continuum of aged-care services, including Home and Community Support Services (HCSS) and Aged Residential Care (ARC). 

The review will be structured into two key workstreams.

Workstream One – Demand and supply analysis

The main output of Workstream One is a strategic assessment of the current state of aged residential care and home and community support services that provides sufficient information for funding considerations and provides a baseline from which Workstream Two can be undertaken. 

This work will run through the second half of 2023 and is to be completed by the end of December 2023.  

The purpose of Workstream One is to: 

  • provide a detailed understanding of the current state   
  • identify pressure points, including insights on core issues such as regional variability, workforce, equity, and financial viability  
  • examine the adequacy of current funding arrangements, including ensuring providers have appropriate incentives to invest in developing and maintaining facilities 
  • provide advice to Ministers, including options analysis to address key pressure points and to stabilise services under current funding mechanisms. 

A programme delivery team, including Sapere Research Group and resources from Te Whatu Ora and Te Aka Whai Ora, is responsible for the day-to-day planning, analysis, design and delivery of the programme. 

It will include engagement with key stakeholders.  

A programme advisory group has been established to provide a collaborative forum for a range of voices to inform and enhance the analysis and review work, and to enable a better understanding of the challenges and opportunities.  

There are about 30 members, including community and whānau, employee representatives, providers, non-governmental organisations and funders. 

A programme steering group has been established to monitor progress and provide advice and support to help the programme remain on course. 

Workstream One will also be guided by recent health strategies, research, reports and work programmes. For example: 

Also, the 2019 EY ARC funding model review, the Settlement Party Action Group (SPAG) from 2019-2020 on HCSS and other work as deemed relevant.

Workstream Two – Service and funding model redesign

The main output of Workstream Two will be recommendations for future optimal service and funding models for the health of older persons. 

Work on examining the nuances of the current funding model, alternative models, and the model of care is expected to begin in January 2024.  

It will also include engagement with the sector, and it is anticipated that Te Pae Tata’s Ageing Well Strategic Design Network will support Workstream Two, replacing the programme advisory group. 

The purpose of Workstream Two is to: 

  • identify and assess funding and service model options for aged-care along the aged-care continuum 
  • recommend a preferred way forward and high-level multi-year roadmap that will balance financial sustainability, service quality, and affordability. 

Recommendations from Workstream Two are expected to be completed for the Government to consider by mid-2024. 

This work will support the sector to be fit-for-purpose for the future and well positioned to deliver efficient, high-quality services that result in better outcomes for older people, kaumātua; and their whānau.