Source: Aged Care Association
The recent report by RNZ on unions taking Health New Zealand to court over travel costs should be a wake-up call for policymakers.
For years, the Government has promoted care in the home as the more cost-effective option for supporting older New Zealanders. Keeping people out of residential care has been framed as both compassionate and fiscally responsible.
But there is a growing problem with that narrative: it has never been properly proven.
And now, the fuel crisis is exposing why.
Home-based care is only “cheaper” because key costs are being shifted out of the system and onto workers. Travel – an essential part of delivering care – is not being treated as a core cost of healthcare. Instead, it is increasingly being absorbed by support workers themselves.
This is not efficiency. It is cost displacement.
If we were to take an honest, system-wide view, the picture would look very different. Time spent driving between clients, workforce turnover, missed early interventions, and avoidable hospital admissions all carry real costs. They are simply not being counted in the comparison.
At the same time, the policy settings that prioritise keeping people out of residential care have created a false divide between two parts of the same system.
Both in-home care and residential care are essential. But one is being actively constrained, while the other is being stretched beyond what it was designed to do. And the difference in what they can provide is significant.
Residential care offers 24/7 clinical oversight, immediate response when something changes, and a stable workforce that knows the individual. By contrast, home-based care is often delivered in short visits across the day, with gaps in between where there is no support on site.
For someone with increasing frailty or complex needs, there is simply no comparison.
That is not to argue against care at home. For many people, it is the right choice at the right time. But it should be just that – a choice, based on need – not a default driven by an untested assumption that it is cheaper.
Because the current model is not just shifting costs onto workers. It is also creating inefficiencies that undermine care.
When workers are expected to subsidise the system through unpaid or underpaid travel, the result is predictable: high turnover, difficulty recruiting, and a loss of continuity. Older people see a revolving door of carers, rather than the consistency that allows subtle changes in health or behaviour to be recognised early.
Continuity is not a luxury. It is how deterioration is detected before it becomes a crisis.
Layer on top of that the inefficiency of travel, particularly in rural and regional New Zealand, and the idea of “cheaper care” becomes even harder to sustain. Yet we already have infrastructure that could help solve this.
Aged residential care providers are embedded in communities across the country, often alongside retirement villages or independent living units. They have trained staff, established systems, and a deep understanding of older people’s needs. But current settings largely prevent them from extending care into the surrounding community.
If that changed, we could reduce travel time, stabilise the workforce, and deliver more consistent, relationship-based care – while making far better use of what already exists.
The fuel price spike has not created a problem. It has revealed one.
We cannot continue to claim that care at home is cheaper when the true costs are hidden, shifted, or ignored. Nor can we continue to treat both home care and residential care as the “ugly cousins” of the health system – relied on heavily but undervalued in policy and funding decisions.
If we are serious about getting this right, we need to stop designing the system around what looks cheapest on paper, and start designing it around what actually works for the workforce, for the system, and most importantly, for older New Zealanders.
