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West Coast-Tasman MP Damien O'Connor has written to the West Coast District Health Board about the severe shortage of dementia beds, and also wants progress on changing the funding system.
Heritage Lifecare Ltd confirmed recently it has abandoned plans to convert the former Kowhai Manor rest-home on the Greymouth hillside into a specialised dementia unit.
That means dementia patients who cannot get into O'Conor Home in Westport, or the Kahurangi unit at Greymouth Hospital, have to leave the West Coast for care. Currently there are only 35 dementia beds between both homes, and both have long waiting lists.
Dementia care is specialised and elderly residents diagnosed with the illness cannot be kept in a regular rest-home.
Mr O'Connor said he had written to the DHB asking how it was going to cover ''this area of need''.
''Clearly, at some stage in their planning or lack of, they have underestimated the demand for this level of care. That has to be addressed.''
The O'Conor Home trust had raised with him the ''anomaly'' whereby rest-home funding is based on land values and he hoped to see progress on that funding formula, Mr O'Connor said.
Buller Mayor Garry Howard, who has been championing a review of aged care in the region, said the reality was it was just not economic to open a new dementia facility on the West Coast because of the land value-based funding model.
Mr Howard said a facility the size of O'Conor Home, of which he is a trustee, would receive $253,000 more funding each year if it had been built in Auckland, because the funding model was based on land values. If in Christchurch, it would get $69,000 more.
However, the rest-homes had to pay the same rates for labour and overheads, no matter where they were, he said.
Mr Howard said Buller leaders were ''quite conscious'' that families were anxious about where their parents and partners may have to go for dementia level care.
National Party list MP Maureen Pugh said there were inequities for rural providers with the current model and she fully supported the funding review under way.
''We will not attract new providers for dementia care facilities unless the funding model supports them.
''There are other cost pressures that our rest homes are experiencing following the increase in minimum wages, which has in turn pushed up wages for other tiers within an organisation,'' Mrs Pugh said.
''Of huge concern to me is the potential for all health services that rely on population-based funding, to lose income following the disastrous census. I am keeping a close watch on this to ensure we are not financially disadvantaged.''
West Coast DHB executive director planning, funding and decision support Carolyn Gullery said the board had held discussions with one private provider, Heritage Lifecare, last year and provided a letter of offer to ''capacity fund'' some beds.
''However, a more detailed feasibility study by the provider demonstrated a number of issues with the viability of their proposal, and the DHB's offer was not formally accepted, and has since been withdrawn.''
Ms Gullery said the DHB was ''very aware that there is lack of choice for people requiring dementia rest-home and psychogeriatric levels of care'' in facilities close to where they and their family lived.
Dixon House extended into hospital level care last year and was allocated up to 20 patients requiring hospital care.
Grey District Mayor Tony Kokshoorn, who is on the Dixon House board, said dementia care required a new level of care, and capital.
''I'm not saying we won't go there one day. Rest-homes will go into that in the future.''