Summerset CEO Cook says aged care funding needs 'pretty serious look'

UPDATED: New Zealand needs to take a hard look at the way it funds aged care services in an environment where an ageing population is set to become a greater strain on the health budget, says retirement village operator Summerset Group [NZX: SUM] head Julian Cook. 

The Wellington-based company is putting greater emphasis on the care services it offers residents at its expanding footprint of villages, which Cook says are at the premium end of the market. While that's fine for Summerset's residents, who Cook says are happy to pay a fee for "a very high standard of care" that won't be appropriate for everyone. 

"It is an issue for government and society from a wide perspective, because funding care is not great and it is tough to make any kind of return in that sector," Cook told BusinessDesk. "The government does need to have a pretty serious look at what is the right kind of level of funding and level of service and care that they want for older people in New Zealand."

Summerset lifted income from care fees and village services 24 percent to $46.5 million in calendar 2015. While it doesn't break out care fees as a separate item, it said fees earned from the Ministry of Health accounted for 59 percent of those fees in the year, up from 52 percent a year earlier. 

The company today said it continued to develop its care services through calendar 2015, introducing a new head of clinical role and clinical nurse leads to support its nurse managers. Summerset has also started benchmarking clinical indicators across its care centres. 

The Ministry of Health identified the need to recruit and retain staff in aged care, mental health and rehabilitation services as a priority both at a national and individual employer level in its statement of intent for 2015 to 2019, and policy is being provided to the minister to propose new initiatives to deal with the future of aged care. 

Summerset intends to launch a pilot dementia facility this year, an area it has previously indicated as offering opportunities when part of an integrated service. 

Summerset's Cook said the company's integrated offering was one of its selling points in trying to attract new residents, in what retirement village operators have identified as an under-serviced sector. 

"That continuum of care and being able to offer all those service in the package in the village if you ever should need it is part of the offering," he said. 

Summerset plans to double the 2,400 or so retirement village units it's currently operating over the next six years, and add more than 400 care beds to its 616 existing beds. 

Cook said that growth will likely continue with the demand profile expected to remain for at least the next three decades. 

The shares increased 0.3 percent to $3.96, having decreased 3.7 percent so far this year. 

(BusinessDesk)