Retirement villages straddle line between care and services

One of the most emotional cases I’ve come across when dealing with issues around retirement villages, is a complaint regarding a Summerset resident with dementia.

It taught me this – the current complaints system is long, drawn-out, confusing, expensive and often requires legal representation to navigate it.

That’s why the Ministry of Housing and Urban Development is considering appointing a commissioner or a dispute resolution provider to run a new scheme. Personally, I’d rather see this called an ombudsman scheme and run independently of village operators, with levies charged to fund it.

Our current system is a consumer-shambles as two regimes often overlap:

1. The disputes panel will hear complaints about the services provided such as the use of facilities or contractual payments.

2. The Health and Disability Commissioner will hear cases about care.

There are multiple hoops. The operator tries to resolve a complaint (fair enough) then the statutory supervisor has a go, then mediation is offered, then there’s arrival at the disputes panel.

Or the two middle hoops can be jumped. It’s convoluted and requires a large flow-chart to explain.

Residents come with families

We have 50,000 Kiwis living in retirement villages. When you add in family members who inherit, that could easily be another 120,000 people with a financial interest.

Roughly $20 billion of family money is controlled by village operators. Families also help deal with the services and care their loved ones receive.

In the Summerset case, the family won a settlement of $37,000 from the disputes panel. They incurred legal fees of $10,000 to prove that Summerset had put another occupant in their family member’s suite before they received their money back ($405,000 less fees). The family felt Summerset was withholding information from them and would not engage when they asked what was happening. This was despite being able to see another resident living in the suite through a window.

They were concerned the operator was double-dipping and charging two parties fees for the same unit. Summerset said when it realised this had been happening it refunded the money, but said it was potentially within its rights to charge two people at a time.

Summerset was ordered to pay back $10,000 in legal costs, which it has done, but this is never guaranteed.

Mixed up in this case were the reasons the family removed their husband and dad from Summerset. Lack of supervision and engagement in the care suite was worrying and the man was found wandering and caused a flood. Access to a sensory room was prevented and it was often locked. They were told this room was calming and helped in the care of those with dementia.

Summerset was made to reimburse the entire management fee.

But the complaint didn’t end there. Summerset appealed in the District Court. It was not disputing the settlement, but wanted to test if the disputes panel had overstepped the mark and ventured into the territory of the Health and Disability Commissioner.

Access to a sensory room was both a service and part of a resident’s care.

Summerset paid the legal fees of both sides, effectively footing the bill to have an internal argument about the dispute system in court. While the family didn’t have to pay, it was hard to go through the wringer all over again.

The court noted that the panel might have overstepped but said there was no “hard line in the sand.

And therein lies the rub. Retirement villages are a hybrid of both care and services. There’s a four-step complaints system and a branch to the Health and Disability Commissioner. Which way do they turn if their problem encompasses both?

With age, less confidence and depleting savings in some cases, navigating the legislation, the code of practice, code of residents rights, disclosure statement and the occupationright agreement is pretty tough.

Advocates are needed to help guide people, because the profile and the vulnerability of a resident are different.

As Judge Tony Zohrab pointed out in this case “The two disparate legislative regimes under the Retirement Village Act and the myriad health and disability legislation do not sit easily together. As retirement village providers such as Summerset move their business model toward a hybrid one providing both types of service, often at the same time to the same resident, these two regimes will be forced to be considered side by side.”

I think it’s important the ministry finds a way of incorporating the Health and Disability Commissioner’s skills and jurisdiction into the role of a simple single-tier ombudsman scheme. The service needs the ability to take phone calls, assist the resident in documenting their case, obtain a letter-of-deadlock from operators and hold a hearing covering all issues.

Whatever method the ministry chooses, a one-stop-shop with advocates who can help put together a complaint is essential, given issues around age.

No surprise in what operators think

The association representing operators has told the ministry: “There is little robust evidence to suggest the current complaints system isn’t fit for purpose”.

And: “The RVA does not support a separate advocacy support service”.

Operators want an adjudicator to award costs if a resident “persists with a vexatious and frivolous complaint” and want the right of appeal to the courts preserved, along with the ability to hear the case as if it was fresh, rather than a judicial review of the process.

Operators point out only 2% of residents are dissatisfied with village living. Banks, insurers, financial advisers, fund managers, landlords and motor vehicle dealers can probably all say the same, but it doesn’t stop them being part of a simple consumer focused complaint scheme.

CLARIFICATION: This opinion piece has been updated to reflect the fact that the disputes panel did not say Summerset falsely claimed the suite was empty. It did say that it did not tell the family it was retenanted when asked. Summerset said when it discovered it had been charging two residents over the same period, it voluntarily refunded the money. The panel noted that the resident was found wandering and caused a flood, but did not say he was in danger. Updated December 14, 8.57pm.

Readers should always seek specific independent financial advice appropriate to their own circumstances.