''This is a direct result of efforts by the DHB to provide options for older people to remain independent in their homes with appropriate support,'' the report says.
The ''trend'' towards referring fewer people to residential services would continue.
Southland providers had been alerted to opportunities in hospital-level, dementia care, and psychogeriatric care.
A financial report to the committee shows residential care costs were $600,000 below budget year-to-date, while personal care costs were $1.1 million more than expected year-to-date.
Aged Care Association Otago Southland board member Malcolm Hendry said falling occupancy was an issue only in Southland as yet, to his knowledge.
He did not believe the health board recognised the importance of working with the private residential care sector. If it let providers fail, there could be insufficient provision in the sector for the baby-boomer generation in about a decade, he said.
The combined disability support and community and public health committees meet tomorrow in Invercargill.