Alex Grove and Anna Dunkley
The 2016–17 Budget tightens funding for residential aged
care providers, but provides some extra funding for regional aged care and the
My Aged Care contact centre. The combined effect of aged care measures in the Budget
is a reduction in expenditure of $902.7 million over five years.
Changes to aged care provider
The Budget includes savings of $1.2 billion over four years
through changes to the Aged Care Funding Instrument (ACFI) used by residential
aged care providers to determine the base funding for each resident. This is in addition to the $472.4 million savings over four years through
changes to the ACFI scoring matrix that were announced in the Mid-Year
Economic and Fiscal Outlook 2015–16 (MYEFO).
The ACFI is a tool used to assess the care needs of permanent
residents through a series of questions that determine funding across three
domains: Activities of Daily Living (ADL), Behaviour and Complex Health Care
(CHC). The greater the assessed need in each domain, the higher the basic
subsidy for the resident. This basic subsidy (determined by the ACFI) accounted
for the majority of the funding ($9.7 billion out of $10.6 billion) the
Australian Government paid for residential care subsidies and supplements in
The Australian Government controls the number of subsidised
aged care places. Despite this, residential
aged care funding can still exceed forecasts because ACFI assessments completed
by individual providers affect the level of subsidy that each place attracts.
The Government is concerned by higher than expected growth in ACFI expenditure,
particularly in the CHC domain, which it believes cannot be explained by an
increase in the frailty of residents (as the other two domains have not grown
at the same rate).
The savings will be achieved by changing the scoring matrix
that determines a resident’s classification for each of the three ACFI domains,
as well as reducing the indexation of the CHC component of the basic subsidy by
50 per cent in 2016–17. The Government will
establish a $53.3 million transitional assistance fund to support providers and
consult the sector on future options for determining aged care funding,
including the possibility of having ACFI assessments done by an independent
party rather than providers.
This is not the first time ACFI has been revised due to
concerns about excessive growth. For example, the Gillard Labor Government
tightened ACFI assessment criteria in 2012 in order to redirect funding to its Living
Longer. Living Better aged care reform package. This led to a debate between the Government and providers on whether ACFI
funding reflected the actual costs of providing care.A
similar debate ensued when the current Government announced changes to ACFI in
the 2015–16 MYEFO.
The 2016–17 Budget also has $102.3 million in increased
funding over four years for regional aged care providers through changes to the
viability supplement. The supplement is paid to eligible rural and remote aged
care services to assist with the extra cost of delivering services in those
areas. The Government will
update the geographical classification model used to determine eligibility for
the supplement, and increase the supplement rate for some residential aged care
services. These changes are
expected to benefit around 250 residential services, many in or near outer
regional towns, as well as a number of multi-purpose and Indigenous services
and around 7,000 home care package recipients. Grandfathering arrangements will
apply to ensure that no service or care recipient is worse off as a result of
the change in model.
This measure is in keeping with the finding from a recent
Aged Care Financing Authority (ACFA) report that although ‘the Viability
Supplement is assisting providers and generally appears well targeted with
payments predominantly to the rural and remote group … its classification
system is dated and may not best target funding in all cases.’
More funds for aged care contact
The My Aged Care call centre and website provide aged care
information and serve as the primary contact point for people seeking
subsidised aged care. Contact centre staff screen and assess clients over the
phone, and can then refer them to a face-to-face assessor to determine their
eligibility for services such as home support, home care or residential care.The
Budget includes an additional $136.6 million over four years to support the
operation of the contact centre. The contact centre received around 1,280,000
calls in 2015–16, but this is expected to increase by 41 per cent in 2016–17.
The 2016 Budget has been described by key stakeholder,
Catholic Health Australia (CHA), as a ‘mixed bag’ for aged care. Provider peak bodies have criticised the cuts to ACFI funding. CHA believes
they will have a negative impact on budgeting for nursing and personal care, as
well as on investment in the industry. Leading Age Services
Australia (LASA) believes the Government ‘is in denial about the true cost of
providing complex care’. Health peak bodies are
similarly concerned. Alzheimer’s Australia (AA) acknowledges that the
Government ‘may have had little choice but to cut ACFI due to projections of
unsustainable expenditure’, but argues that ACFI is a flawed funding tool. Palliative Care Australia is concerned that cuts will lead to aged care residents
missing out on high quality care at the end of life.
Extra funding for rural and remote services has been
welcomed by provider peak bodies Aged and Community Services Australia (ACSA),
CHA and LASA, although LASA has questioned if it will lift the financial
viability of many providers in the face of other cuts. Increased funding for the My Aged Care call centre has been widely welcomed by
consumer and provider groups including ACSA, CHA, AA and COTA Australia (formerly Council on the Ageing). Both COTA
Australia and CHA remarked on one omission from the Budget: a clear signal on
the Government’s plans for future reform of the aged care system.These
plans may be revealed in the forthcoming election campaign.
All online articles accessed May 2016.
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