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Aged care 'bonds' could be a way to help ease the pressure on a struggling sector, one expert says.

Pam Newlove, partner and retirement village, aged care and healthcare services lead at Grant Thornton, said aged care providers faced a funding problem and many were losing money and closing down.

She said the government had an opportunity to overhaul the system in this year's Budget.

"Without aged care facilities in the community, elderly Kiwis are more likely to end up in hospital for longer, which puts pressure on our already struggling healthcare system."