Part 1: Introduction

1.1
In this Part, we describe:

• the purpose of our audit;
• how we carried out our audit;
• what we did not audit; and
• the structure of this report.

Purpose of our audit

1.2
We carried out a performance audit of the arrangements designed to check that the care older people receive in rest homes meets the required standards of safety and quality.

1.3
In this report, rest homes are facilities that provide residential and long-term care for those older people (usually aged 65 and older) who are no longer able to live independently in their own homes. Rest homes accommodate three or more people unrelated by marriage or blood to the people providing the care and accommodation. Some rest homes provide care comparable to the nursing care a person would receive in a hospital. Rest home operators are paid for providing the care, by either the resident or by the Crown.

1.4
With increasing rates of dementia, and with more services available to support older people to stay at home for longer, people who move into rest homes often have more complex needs than in the past. This means that rest homes provide for some of the most vulnerable people in our society. It is essential that the systems designed to safeguard their care are effective.

1.5
In 2009, there were an estimated 34,000 rest home beds throughout the country. In May 2009, there were 715 certified rest homes.¹ By 2030, the population aged over 65 years is predicted to double and the population over 85 years is expected to treble. By 2051, older people will make up about a quarter of the total population.

Ministry of Health's role in rest home care

1.6
The Ministry of Health (the Ministry) administers the Health and Disability Services (Safety) Act 2001 (the Act). The purpose of the Act is to:

(a) promote the safe provision of health and disability services to the public; and

(b) enable the establishment of consistent and reasonable standards for providing health and disability services to the public safely; and

(c) encourage providers of health and disability services to take responsibility for providing those services to the public safely; and

(d) encourage providers of health and disability services to the public to improve continuously the quality of those services.

1.7
Under the Act, rest homes have to provide their residents with care that meets certain standards. Those standards are approved by the Minister of Health, and published by Standards New Zealand as the Health and Disability Services Standards (the Standards).² The Ministry ensures that the services provided in each rest home are audited against the Standards.

1.8
Much of the auditing is carried out by independent organisations that the Ministry has approved to do the work. The organisations are known as designated auditing agencies (DAAs). DAAs submit their audit reports to the Ministry's HealthCERT team. HealthCERT is responsible for:

… ensuring hospitals, rest homes and residential disability care facilities provide safe and reasonable levels of service for consumers, as required under the Health and Disability Services (Safety) Act 2001.

HealthCERT's role is to administer and enforce the legislation, issue certifications, review audit reports and manage legal issues.³

1.9
The Ministry uses the audit reports from DAAs (and other information) to decide whether a rest home can continue to operate, and for how long (from one to five years). The term used to describe the Ministry's permission for a rest home to operate is "certification". The auditing by DAAs is an integral part of the certification arrangements.

District health boards' role in rest home care

1.10
District health boards (DHBs) also have a role in monitoring the quality of the care that older people receive in rest homes. DHBs fund the rest home care of older people who are entitled to a subsidy. The rest homes that provide care for people entitled to a subsidy must enter into a contract with their DHB. Although the contract is the same nationally, it is monitored locally. DHBs have varying ways of monitoring the contract. In 14 of the country's 21 DHBs, the monitoring includes auditing that is similar to the auditing carried out by DAAs.

How we carried out our audit

1.11
We examined whether the Ministry's administration of the certification arrangements was effective in promoting the safe provision of services to the residents of rest homes, and encouraging rest home operators to continuously improve those services. To be effective, DAAs would consistently and reliably identify where rest homes were failing to meet the Standards. Rest homes would quickly make the necessary improvements, and certification periods would appropriately reflect the quality and safety of the services provided by a rest home.

1.12
We looked at the work that the Ministry does to decide whether, and for how long, rest homes should be certified. We included the way the Ministry designates agencies and oversees the performance of DAAs, and how it uses information from complaints and from DHBs to make decisions about certification.

1.13
We looked at the work that DHBs do to monitor the contract they have with rest homes, to see whether the monitoring is aligned and co-ordinated with certification.

1.14
We interviewed officials from the Ministry, DHBs, the Health and Disability Commissioner's office, and the shared service agencies⁴ (SSAs) that carry out audits for some of the DHBs. We also interviewed managers of rest homes, directors and auditors of DAAs, and people working for organisations that provide advocacy services for older people.

1.15
We reviewed the Ministry's certification files for 73 rest homes, tracking the audit reports of each since certification was introduced in October 2002. We also observed two certification audits and an audit on behalf of a DHB to better understand what happens during these audits and the methods that are used.

1.16
Between June and August 2009, we surveyed all 21 DHBs on their methods for monitoring rest home contracts and their view of the certification process. We received responses from 20 DHBs.⁵ We also surveyed Age Concern's regional offices for their views on how the Ministry and DHBs ensure the quality and safety of care provided in rest homes.

1.17
In 2009, the Ministry began a project to improve the way in which rest homes are certified and to work with DHBs to reduce duplication in auditing. We looked at the project, and the wider work the Ministry is doing, to consider whether it will lead to improvements.

What we did not audit

1.18
We did not set out to form a view on the adequacy of the Standards or the quality of the care provided to rest home residents. The certification of any health and disability services other than those provided in rest homes was also outside the scope of our audit.

Structure of this report

1.19
Our report has six parts. In Part 2, we describe how the Ministry certifies rest homes and how DHBs monitor the contracts they have with rest homes.

1.20
In Part 3, we discuss how effectively the Ministry has managed the certification of rest homes since certification was introduced in 2002. We include how well the Ministry manages the process of designating audit agencies and how well it monitors their performance. We also discuss how effective certification has been in encouraging rest homes to continuously improve the quality of the services they provide.

1.21
In Part 4, we discuss how the Ministry manages risks in the certification arrangements.

1.22
In Part 5, we discuss the Ministry's recent efforts and further plans to improve certification, set out our views about whether this work will be sufficient, and identify other changes the Ministry could make.

1.23
In Part 6, we describe how DHBs meet their responsibility under the New Zealand Public Health and Disability Act 2000 to monitor their contracts with rest homes. We discuss the extent to which their work is co-ordinated with the Ministry's certification of rest homes.

1: Technically, it is the services provided by the rest home operator that are certified, rather than the rest home.

2: Standards New Zealand (2008), Health and Disability Services Standards, NZS 8134:2008, Wellington.

3: See the certification section of the Ministry's website (www.moh.govt.nz/certification).

4: Shared service agencies are owned by groups of DHBs. They carry out services on behalf of those DHBs.

5: In paragraph 1.10, we noted that 14 of the 21 DHBs carry out their own auditing to monitor their contract with rest homes. We found out through other means how the one DHB that did not respond to our survey monitors its contract with rest homes.