Main Issues In Aged Care

Nicole Brooke - Friday, June 10, 2016

I was reflecting on what the significant issues to consider for aged care:

Main Issue - Aged Care providers want and need stability in funding. This gives investors more support and reliability to invest in the sector. Without the funding stability, there is a lack of confidence in the sector.

These changes are giving the consumer more control and choice.  However, the biggest challenge is to the consumer is that it is a user pay system now.

  • USER PAY - Community care and residential aged care is facing significant shifts as it moves into a user pay system. Community care has already seen the introduction of Consumer-Directed-Care (CDC) packages whereby clients can dictate entirely how they want to spend monies and with who. As of February 2017, these monies is due to go directly to clients’, therefore giving the client more control of who provides their care and services. This is possibly the single biggest failure of the MyAgedCare gateway system which is not helping to support and navigate these challenges. Providing the care and services that a consumer may want is very much constrained by outdated employment awards that don’t provide for meeting the changing needs and increasing expectations of clients or give the sector flexibility to grow the workforce professionally.
  • FUNDING - Funding into the sector based on clients acuity in community care or residential care continues to be reduced. Where by a community care client who used to be receiving a high care community aged care package (CAPS) which was a funding model a few years ago would be able to receive about 16-20 hours of care per week, now in the equivalent CDC package would only receive 8-10 hours because of reduced funding. Therefore, community care clients are increasingly expected to ‘top up’ their packages with private services or pay for private services in the 6 months they are often on a wait list to receive a government package. This has resulted in clients are receiving less hours and reduced support, and concurrently their expectations and needs are increasing. With an internal understanding within residential aged care that Aged Care Funding Instrument (ACFI) generally paying for 24/7 care staffing and services, and at an average of ($160/day), including staffing on-costs, it is impossible to meet the increasing acuity needs of such a frail population within this parameter. These costs are compared to approximately 1/10th of the cost of a day in a hospital. Therefore, we will start to see residential aged care needing to start to ‘top up’ care and services more than what has been happening already. Whilst the Government has made it very clear that this sector will become a user pay system, this population has not planned for this and is frequently unable to support these fees.
  • IMPROVING AMENITY - As the private providers of residential aged care expands, so to does the consumers expectations of what accommodation and services they desire when entering residential aged care, the sector is being forced to re-evaluate their service offerings. The Government does not offer a loan scheme to private providers and very few not for profits enjoy benefits of these ZRIL loans in order to refurbish their facilities, therefore, they need to make significant investments in building and renovating. Frequently the best way to do this is through using the interest off the Refundable accommodation deposits (RADS). Notably, their liquidity strategy plans need to at any point support being able to pay back these RADS as soon as a client vacates the facility.
  • ACUITY - Acuity needs of clients is increasing with the majority of clients exhibiting cognitive impairment, such as dementia, and often depression. As high and low care is no longer a division within the residential aged care sector, more facilities are turning to only being able to support very high care and high acuity clients. This is predominately due to a majority of people choosing to stay in their homes despite increasing acuities and enormous pressures on carers which remains often unfunded and unsupported. This impacts on community care resources providing traditionally high care services now in the community with often insufficient hours.


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