Can’t make a profit: home care provider Healthcare New Zealand ends board contract over NZ$200K loss

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Is this a sign of how hard it is to ‘make a buck’ in New Zealand’s home care system?

Healthcare New Zealand, part of the country’s largest provider of Home and Community services New Zealand Health Group, is not renewing a district health board contract, alleging it costs them NZ$200,000.

Healthcare New Zealand and other contractors are in a heated dispute over the level of funding provided by district health boards, NZ Ministry of Health and the country’s Accident Compensation Corporation to deliver in-home care and support to people with high health needs.

Healthcare NZ says providers have never been fully compensated by Government for the 2017 pay equity settlement for care workers. Under that deal, negotiated between the then-National government and trade unions, $2 billion was set aside to meet the cost of the wage rises for workers who had been historically underpaid on account of their gender.

Healthcare NZ CEO Jo Gagan (pictured above), Founder and former CEO of Geneva Healthcare, says ‘on-costs’ associated with the settlement, such as annual and bereavement leave liabilities and ACC fees, have fallen on providers, making contracts loss-making. She said the contract with South Canterbury District Health Board was losing $200,000 a year and it will walk away from its contract on 16 November.

Access Community Health, Presbyterian Support Services and Forward Care Home Health will take over the contract.