Money delays the nursing home project

Anglican Care's plan for the nursing home and retirement village from 2016
Anglican Care's plan for the nursing home and retirement village from 2016

Gloucester’s new nursing home is no closer to breaking ground with further delays encountered.

Project timeline

The journey toward Gloucester getting a brand new nursing home began in late 2014 when Hunter New England Health (HNEH) put a call out for expressions of interest to take over the 60 nursing home beds licences held at Gloucester Soldiers Memorial Hospital (Hillcrest Nursing Home, Narraweema and Kimbarra Lodge Hostel). 

An agreement was reached with the former Gloucester Shire Council to purchase a parcel of land on Clement Street in early 2016 with Mr Osborne hoping to have the project finished by the end of 2018.

Anglican Care had planned for an up to 80 bed nursing home which required an application for addition beds.

In May 2016, Gloucester Shire Council was forced to merge with Greater Taree and Great Lakes councils and by August that year, Mr Osborne declared the nursing home project was delayed by the amalgamation

If the project is not financially viable, we will not go ahead.

Colin Osborne

By April 2017, Anglican Care and MidCoast Council shook hands over the purchase of the land and Mr Osborne stated that he hoped to have the development application into council, plans approved and the official ground breaking by the end of the year.

At that stage, Mr Osborne indicated that the buy in cost for the retirement village Anglican Care was proposing was met with a community response that it was too expensive and therefore the organisation had to look for less expensive building options.

“If the project is not financially viable, we will not go ahead,” Mr Osborne said.

Mr Osborne has indicated that the tender requirements laid out by HNEH stated “a desire to see a new facility in a three to five year timeline.”

“That’s mid 2020,” he said.

Gloucester Memorial Hospital health service manager, Paul Townsend, Colin Osborne, MidCoast Council's Paul De Szell at the block in Clement Street in April 2017. Photo Anne Keen

Gloucester Memorial Hospital health service manager, Paul Townsend, Colin Osborne, MidCoast Council's Paul De Szell at the block in Clement Street in April 2017. Photo Anne Keen

Nursing home

During a presentation to the Gloucester Rotary Club on Tuesday, February 20, Mr Osborne explained where the project was up to due to financial viability.

​​The presentation outlined the financial statistics of the Gloucester nursing home, outlining the data Anglican Care is using to prepare a business proposal that is viable.

The information provided only covered 

off on the nursing home project, as the retirement village is being viewed as a separate project despite Anglican Care’s desire to have it included in the development application it plans to submit to MidCoast Council.

Anglican Care has determined that the Gloucester region does not require 80 beds as previously thought, due to the way the beds have been used, mainly looking at the care need of the residents. Mr Osborne said there are residents currently in Gloucester’s nursing homes who could fall under a home care package and therefore the new facility would require somewhere between 44 and 54 beds.

Hunter New England Health has stated that in the Request for Detailed Proposal (RDP) provided to all prospective operators during the tender process specified that the successful proponent must deliver 60 aged care places in Gloucester.

When asked what will happened if there are more residents in the Gloucester facility at the time the beds transfer over to Anglican Care, Mr Osborne indicated it wouldn’t be a issue as he believes potential residents may be better served by a home care package.

This determination, however isn’t causing the most recent delays. Mr Osborne has stated that during the process of preparing the business case for the project, the amount of capital available is lower than expected.

He explained how the construction of a new nursing home is 60 to 70 per cent financed from the Refundable Accommodation Deposit (RAD) paid by a resident when they come into the home. With the project cost of  Gloucester at around $16.5 million, it would be expected to have around $11.5 million of that from RADs, however according to Mr Osborne HNEH only has $2.9 million.

We are committed to building a new facility in Gloucester, but it needs to be financially viable or we will not proceed.

Colin Osborne

Mr Osborne said that HNEH didn’t disclose the amount of money available in RADs during the tender process and it wasn’t until the amount was revealed that Anglican Care knew the financial challenge it was facing.

“We are committed to building a new facility in Gloucester,” Mr Osborne said. “But it needs to be financially viable or we will not proceed.”

According to Mr Osborne the current RAD at Gloucester is $190,000. The proposed new nursing home will have a minimum RAD of $295,000.

There are three ways residents can pay to enter a nursing home. One is through paying the RAD in full, which is held for the time the resident is in the facility and returned in full when they leave. Another way is through a Daily Accommodation Payment (DAP) which is determined by a government calculation taking into account the RAD and the government appointed interest rate. This is not refundable but the rate can be reduced by a part payment of the RAD. The final option is a concessional resident with the DAP covered by the government, determined by a person’s financial situation with set places available also determined by the government.  

The RAD is determined by the provider, in this case Anglican Care, which Mr Osborne said is structured much like the costing of a star rated hotel room.

At Anglican Care’s Bulahdelah facility the RAD is between $225,000 and $280,000, where its two facilities in Taree range from $325,000 to $385,000.

In December 2017, Anglican Care applied for an $8 million federal infrastructure grant under Building Better Regions Fund (BBRF) to help cover the gap in RAD. Lyne MP Dr David Gillespie is supporting Anglican Care in the quest for the grant funding which should be announced mid year.

Colin Osborne speaking to the Gloucester community in May 2016

Colin Osborne speaking to the Gloucester community in May 2016

Dr Gillespie said the nursing home project is important to Gloucester and is a way of providing a place for residents to go to in their twilight years without having to leave their community.

But what about the additional bed licences that Anglican Care has been granted? According to a spokesperson from Australian Government Department of Health, aged care providers are able to apply to transfer their places to another provider or to move them to another service.  

“In some instances, aged care places may be moved to a different location.”

Mr Osborne said Anglican Care doesn’t currently have a facility that could take the additional licences and that it would “most likely relinquish them.”

Home care packages

Home care packages have seen a change over the past year with the government beginning to deregulated the process.

In the past, aged care providers applied to have a number of home care package allocations, meaning it could only be provided to someone if a spot was available. 

According to Mr Osborne, once a person is assessed they can name the provider they wish to use for the service. 

He believes this change will make a big difference in the amount of residents Gloucester will see in the new nursing home as more people are given the opportunity to stay in their own home for as long as possible.

Retirement village

There has been some confusion in the Gloucester community about the Anglican Care nursing home and retirement village project. 

The best way to understand what is happening is to look at the projects separately. The nursing home is a project Anglican Care has undertaken after being successful is its tender for the existing Gloucester bed licences. The retirement village is a separate project Anglican Care has been looking into due to community feedback. 

At this stage, an update about what the proposed retirement village will look like or the cost for people to buy in is not available as Anglican Care is still working on a “financially viable” option.

Anglican Care hopes to have the final plan for the entire project, with both a nursing home and a retirement village, completed in May ahead of submitting the development plan to council.