NZDSN and Ministry Proposed joint Community Residential Strategic Work Programme 

NZDSN and Ministry Proposed joint Community Residential Strategic Work Programme

Dear Members

As a result of discussions at the recent CEO forum in Wellington NZDSN and the Ministry of Health (DSS) met on Monday 31 July 2017, as part of our ongoing commitment to work together on those community residential strategic areas that present both significant opportunity and risk for funders and providers. NZDSN was represented at the discussions by Garth Bennie (CE) Sharon Saxton (Chair) and Board members Mike Brummitt and Donna Mitchell. In attendance from the Ministry were Keriana Brooking and Toni Atkinson.

Toni Atkinson provided the meeting with an update on the progress that has been made with KPMG on the residential pricing work which was started in 2014. One of the existing models has been updated for 2017 costs and other work has been done to adapt the model to current service design (including sleep over payments).

An invitation will be sent to NZDSN for a workshop with some of its members in about three week’s time, where KPMG will present the model and for the group to test the assumptions, variables and technical aspects. Anonymised information will also be presented at that workshop that will show the group where providers sit on the new funding formula continuum. NZDSN will assemble a small focus group drawn from its provider membership to provide the strategic and technical expertise required to canvas the work that has been done and to assess the merits of various implementation options.

Toni confirmed that the funding for people with complex needs has been included in the proposed residential pricing model (RPM).

In relation to this work, NZDSN and the Ministry of Health (DSS) are in the building understanding phase. Further and regular meetings will be established to determine what are the most appropriate implementation options (including implementation timing and wider engagement).

Toni signalled that concurrently work is underway internally to build understanding and seek approval to proceed within an approved funding envelope. That funding envelope information will be shared with the group as soon as possible (likely to be within the next 8 weeks).

The group agreed to review the original pricing principles that were agreed with the sector and KPMG in 2014 and adjust as appropriate.

Between now and Christmas NZDSN and the Ministry of Health (DSS) will begin to factor the incorporation of Pay Equity implementation into the residential pricing model discussions. The timeline will be the same for other service agreements where Pay Equity needs to be incorporated into 18/19 business as usual agreements.

The group agreed that a communications message would be developed and issued after every strategic work programme meeting. The aim is to arrive at an agreed written Strategic Work programme that both NZDSN and the Ministry (DSS) can work on.

Summary of actions and outcomes:

  • As a starting point we focus on a review of and implementation of a residential pricing model (RPM)
  • We are agreed that we want to work together to land a residential pricing model as a base from which to introduce pay equity funding into the contracting process
  • We need to agree on some updated principles that inform the residential pricing model
  • The residential pricing model will attempt to address/accommodate pricing inequities, sleepovers, high and complex needs and the ongoing implementation of the pay equity legislation through contracts
  • We are agreed that a specific strategy is needed to implement the residential pricing model and a number of strategy options are possible
  • In about 3 week’s time an NZDSN focus group will receive a detailed briefing from the Ministry and KPMG on the residential pricing model.
  • NZDSN will assemble a small focus group from its provider membership to attend this briefing and to assess the merits, assumptions and technical aspects of what is being proposed
  • There will be a second discussion in a further 3 weeks following the initial briefing which may lead to some testing of the model with a small group of providers
  • Items that we still need to discuss:
  1. The investments/resources  that each party will bring to support a possible work programme and
  2. How the context of impending system transformation impacts on and needs to inform the proposed work programme

NZDSN’s commitment to an agreed work programme rests upon three things:

  1. That it has a mandate from its membership to proceed
  2. We cannot negotiate contracts on behalf of individual providers
  3. That the parameters and strategy around introducing a residential pricing model that incorporates the implementation of pay equity will result in a sector that is viable and can effectively respond to the demands of system transformation

We will advise over the next couple of weeks the membership of the focus group to be involved in the initial briefing on the residential pricing model work.

If NZDSN members have any questions or want clarity over any aspect of this communication, please contact the NZDSN office at


Kind Regards


Dr Garth Bennie

Chief Executive


Tel – 04 473 4678 / Mobile – 027 673 4678

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