A health providers' group says care for the elderly in rural areas could be in trouble because funding was not pegged to cost of living increases.

Health Care Providers New Zealand said district health boards admitted bed numbers were tight in Otago and Southland and more attention was needed to ensure it improved.

"HCPNZ members are saying that there are no hospital or dementia beds in Dunedin or Invercargill, which is causing considerable stress on the elderly and their families," chief executive Martin Taylor said.

He said families often had to accept beds a long distance away, meaning family members faced a drive to visit loved ones that was costly in time and money.

Mr Taylor said a lack of funding meant DHBs would need to look after the elderly in hospitals and rehabilitation wards, which was costly and would take resources away from elective and emergency services.

"The base cause of the problem rests with aged care funding not being inflation proofed, or insulated from cost shocks such as large increases in nurse wages," he said.


In reality the only way to survive is for facilities to get bigger and bigger and this is just not possible for providers located in rural or suburban communities."

Mr Taylor said current funding was too low to attract private providers in Queenstown and the Southland DHB refuses to build an aged care facility because it was too expensive. 

"Political parties must ensure that the elderly living in rural areas can find a bed when and where they need it."

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