Chapter 2
Overview of residential and community care in Australia
2.1
This chapter considers the ageing population of Australia and estimated projections in relation to demand on residential and community aged
care. It also provides an overview of residential and aged care services and
respective funding.
Ageing population
2.2
An estimated nine per cent of Australia's population or approximately two
million people are aged 70 years or older. Those aged 80 years and over
comprise around four per cent of the population and this number is
expected to increase to 10 per cent by 2051.[1]
Over the next four decades, the number of people aged over 85 years will
quadruple to approximately 1.6 million.[2]
According to the Department of Health and Ageing (the department), the ageing
of the population will lead to increasing demand for care and support services
for the elderly with government expenditure on aged care potentially rising
from the current three per cent of total government revenues to be nine per
cent by 2050.[3]
The Aged Care Association Australia highlighted the impact of increase in
persons over 85 years of age:
As the most resource intensive component of any part of the
care continuum is in servicing the over 85s the four fold increase in this
population group over the next forty years will place enormous pressure on
service delivery capacity and the ability to finance this growth whilst
sustaining a declining workforce with a reduced taxable contribution to
Government revenues.[4]
2.3
Grant Thornton Australia noted that, with increased services provided in
the community, residents are entering residential care with higher care needs
and concluded:
The ageing of Australia's population can be expected to
greatly accelerate these trends which will require significant investment in
modern high care facilities. Many existing Australian aged care facilities are
not designed to support high care residents.[5]
2.4
According to the department, approximately four in every 10 older people
(those 70 years and over) are accessing some aged care services. Of these, most
are receiving care provided in their own homes.[6]
Of the move from community to residential aged care, the department noted:
At any one time, about one in 13 people over the age of 70
years have left their home to receive care in a residential care facility.
However, for people who reach age 65, a third of all men and half of all women
will go into permanent residential care at some time later in their lives. The
average age on entry to permanent residential aged care is 82 for both men and
women.[7]
2.5
According to the department, more than 300,000 people received aged care
services provided under the Aged Care Act 1997 during 2007–08.[8]
2.6
A number of witnesses highlighted the growing complexity of aged care
needs of consumers. This is partly a result of increased longevity, the number
of older people with chronic illness and associated co-morbidities, and growing
demands and expectations in relation to residential and community aged care.[9]
The Productivity Commission noted in 2008 moreover that:
Over the next few decades, older Australians are expected to
become more diverse in terms of their care needs, preferences, incomes and
wealth. This will have important implications for the qualitative aspects of
aged care services (such as the range of services needed and the flexibility of
service delivery) and the cost of these services.[10]
2.7
It was recognised that complex and diverse care requires specialised
nursing procedures and the involvement of other qualified health professionals
which further impacts on expenditure and the nature of care provided.
Residential and community aged care services
2.8
According to the department, approximately 4.2 per cent of Australia's population (or 800,000 older people in 2006–07) currently receive subsidised
aged care services in Australia.[11]
2.9
There are two types of aged care services in Australia: residential and
community aged care. According to the department, as of 30 June 2008, there were 223,107 operational aged care places across the country. Of these, 174,669
were residential places, 46,475 community care places and 1,963 transitional
care places:
The resulting national aged care provision ratio as 30 June 2008 was 111.5 operational places per 1,000 people aged 70 years or older.[12]
2.10
The types and levels of care are detailed by the department:
Table 2.1: Types and levels of care
|
Residential aged care home:
frail older people receive care from full time care staff in purpose-built
aged care homes owned by the care provider. These are quire separate from
hospitals.
|
Community care services: older
people receiving care in their homes from visiting care providers
|
High
|
24 hour nursing
|
Extended Aged Care at Home
(EACH)
|
|
Accommodation
|
Extended Aged Care at Home –
Dementia (EACH–D) package
|
Low
|
Accommodation
|
Community Aged Care Package
(CACP)
|
|
Personal care
|
Home and Community Care (HACC)
(with States and Territories)
|
|
Support and allied health
services
|
Assistance with bathing,
shopping, cooking, cleaning, etc.
|
Source: Department of Health and Ageing, Ageing and Aged
Care in Australia, July 2008, p. 7.
Residential care
2.11
Residential care facilities comprise purpose-built aged care homes owned
by a care provider which provide both high (24 hour nursing) and low (personal
care, support and allied health services) levels of care.[13]
2.12
Low level care includes the provision of suitable accommodation and
related services (including laundry, meals and cleaning) and personal care
services (such as assistance with the activities of daily living). High level
care includes accommodation and related services, personal care services and
nursing care and equipment.[14]
2.13
Under the Aged Care Act 1997, the Commonwealth Government
subsidises aged care homes to provide residential aged care to the elderly
whose care needs are such that they are unable to remain in their own homes. At
June 2008, there were 2,830 aged care homes in Australia delivering residential
care under these arrangements with an occupancy rate of 93.86 per cent over
2007–08. This compares to an occupancy rate of 94.5 per cent over 2006–07 and
95.2 per cent in 2005–06.[15]
2.14
Residential aged care is meeting the care needs of an increasingly
dependent group of people. The majority of residents at 30 June 2007 were assessed as high care (70 per cent) compared to 58 per cent of residents in 1998. In
addition, 62 per cent of permanent residents who were admitted during 2006–07
were high care. High and low care resident planning and occupancy ratios are
discussed in Chapter 8.
2.15
At the same time, the age profile of the resident population continues
to increase. Over half (54 per cent) of the 156,549 residents at 30 June 2007
were aged 85 years or older, and over one-quarter (27 per cent) were aged 90
years and over. Overall, only four per cent of residents were less than 65
years of age.[16]
Community care
2.16
Community care is generally delivered in the recipient's own home. Community
care assistance is available through the Home and Community Care (HACC)
program, Community Aged Care Packages (CACPs), Extended Aged Care at Home
(EACH) and Extended Aged Care at Home Dementia (EACH-D).
2.17
The majority of recipients of aged care services in Australia, over
831,500 people in 2007–08, receive low intensity support in the community
through the HACC program.[17]
The number of HACC clients has increased by 17.6 per cent over the past 5 years
from 707,207 to 831,472 in 2007–08.[18]
2.18
CACPs packages of personal care services and assistance are
individually-tailored packages of low level care for frail older persons with
complex care needs in their own homes. They suit those older persons who would
otherwise be assessed as eligible to receive at least a low level of
residential care but who prefer to remain living at home with support. CACPs
provide frail older people with support to remain at home. In 2007–08, 61,740
people received packages of subsidised community care through the
Commonwealth's Community Aged Care Package (CACP) program.
2.19
The CACPs provided under the Aged Care Act's community care arrangements
are complemented by EACH and EACH-D packages.[19]
EACH packages provide tailored care at home as an alternative to high
residential care. EACH-D assist frail older people with high level care needs
and dementia or behaviours of concern to remain at home.
2.20
In addition to services funded through the department, the Department of
Veterans' Affairs funds the Veterans' Home Care program for eligible veterans
and war widows or widowers who have low level care needs. The program provides
a wide range of home care services designed to improve their health and
well-being and assist people to remain in their homes longer, and to assist
their carers.
Funding residential and community aged care
2.21
The Commonwealth Government has primary responsibility for funding and
regulating the residential aged care sector and much of the community aged care
sector in Australia. The framework under which the sector operates is provided
by the Aged Care Act 1997 and the associated Aged Care Principles
1997. The Commonwealth provides approximately three-quarters of the total
funds available to residential aged care primarily through residential care
subsidies and capital grants to providers.[20]
The majority of the funding is provided via the department but specific
residential aged care funding is also provided through the Department of
Veterans' Affairs for aged veterans. The remaining funding comes from permanent
residents in aged care facilities paying accommodation and daily living
charges.
2.22
Commonwealth funding for residential and community aged care has risen
steadily in response to the growth in the aged population. According to the
latest department Report on the Operation of the Aged Care Act 1997
covering the financial year 2007–08:
During 2007-08 Australian Government total expenditure for
ageing and aged care increased to $8.3 billion, including $6.0 billion for
residential aged care subsidies and supplements, $448 million for the community
care CACPs and $188 million for the flexible care EACH and EACH-D packages.
Australian Government expenditure outside the Act included an increase to
$1.006 billion for the joint Australian, state and territory government HACC
program.[21]
2.23
Commonwealth expenditure for aged care in 2008–09 will amount to
$9.3 billion in total. This compares to earlier years: in 2004–05, $6.7
billion was spent on residential and community aged care whilst approximately
$3 billion was spent in 1995–96.[22]
2.24
Funding for 2008–09 will be distributed as follows:
-
$6.7 billion for residential aged care subsidies (for permanent
and respite care);
-
$479 million for Community Aged Care Packages;
-
$429 million for flexible care programs including Extended Aged
Care at Home (EACH), Extended Aged Care at Home – Dementia (EACH-D),
Multipurpose services and Transition Care;
-
$1.1 billion for the Home and Community Care (HACC) program with
the remaining 40 per cent of HACC funding provided by the states and
territories;
-
$80.3 million on aged care assessment;
-
$55.8 million on the aged care workforce;
-
$36.1 million for ageing information and support including the
Community Visitors Scheme;
-
$29.3 million on culturally appropriate aged care;
-
$31.6 million on dementia programs outside of community care;
-
$128.2 million on capital assistance; and
-
$21.7 million to the Aged Care Accreditation Agency.[23]
2.25
Funding for community care services totalled $2.2 billion in 2008–09, an
increase of $260 million over the 2007–08 financial year.[24]
2.26
Residential and community care are funded through subsidy arrangements
paid directly to the aged care providers on behalf of the aged care recipients.
To receive the subsidy, the care recipient must meet four conditions:
-
they must be an approved care recipient determined by the Aged
Care Assessment Teams;
-
their care must be provided by an approved provider;
-
care must be provided in an allocated place; and
-
care must be of a specified quality and accredited as such.[25]
Residential aged care
2.27
Subsidised permanent residential aged care was provided to 208,079 aged
persons in 2007–08 with an average of 160,000 people receiving care each night.[26]
The estimated average annual costs (public and private) for high and low level residential
care per recipient were $63,300 and $39,550 respectively (in 2007–08 prices).
The department noted:
On average, care recipient fees account for about 26 per cent
of the costs of high-level residential care and about 53 per cent of the cost
of low level residential care.[27]
2.28
The Commonwealth provides a care subsidy the level of which is dependent
on the resident's care needs according to the Aged Care Funding Instrument (ACFI).
The level of care subsidy payable is also subject to an income (but not assets)
test.[28]
Providers may also receive the Conditional Adjustment Payment (CAP) as a
percentage of the ACFI subsidy. CAP was introduced in 2004–05 and is discussed
further in chapter 5.
2.29
Accommodation supplements are also paid in respect of some care
recipients in residential care to subsidise there accommodation costs. The
level of accommodation supplement payable is subject to an assets test.
2.30
The Commonwealth also provides capital grants for providers in rural and
remote areas who target special needs groups. Viability supplements are paid to
providers of residential (and community care) in some rural and remote areas in
recognition of the higher costs of providing care in those regions. The 2008–09
Budget included a measure to make available zero interest loans to assist in
expanding the availability of residential aged care beds.
2.31
Users of residential aged care services also contribute to the costs of
their care through the fees they pay. In addition to fees, people entering permanent
residential aged care may contract, on entry, to make accommodation payments to
contribute to the cost of their accommodation. These payments are assets tested,
that is only those residents whose assets exceed a prescribed minimum level are
required to make the payment. Payments may be in the form of either an
accommodation bond or an accommodation charge. An accommodation bond is payable
by those who enter residential care at low level care and by those who receive
care on an extra service basis. The accommodation bond for low-care residents
comprises retention of $9.60 per resident per day (for up to five years) and an
interest income on the accommodation bond.[29]
An accommodation charge is an additional daily amount which is payable by
people who enter permanent residential care at a high level of care; it is
payable for up to five years.[30]
Home and Community Care program
2.32
Total government expenditure on the Home and Community Care (HACC)
program in 2007–08 was $1.652 billion of which $1.007 billion was provided by
the Commonwealth. According to the department, total funding for HACC increased
from 2006–07 to 2007–08 by $127.9 million.[31]
2.33
HACC clients can be asked to pay fees to contribute towards the costs of
services which, according to the department, amount on average to approximately
five per cent of the cost of delivering the HACC services.[32]
2.34
The department noted that 97 per cent of HACC clients receive, on
average, services worth about $1,200 a year (in 2007–08 prices). Three per cent
of HACC clients receive services of more than $16,000 per year and expenditure
on them accounts for 30 per cent of all HACC expenditure.[33]
Community Aged Care Package program and Extended Aged Care at Home programs
2.35
According to the department, Commonwealth funding for CACPs and EACH
packages is projected to total $729 million in 2008–09.[34]
Of the respective packages, the department noted:
CACPs deliver low-level care at an estimated average annual
(total public and private) cost of $15,100 (in 2007–08 prices). EACH and EACH-D
packages deliver high-level care at an estimated average annual cost of $43,630
and $49,150 respectively (in 2007–08 prices). On average, care recipient fees account
for about 16 per cent of the costs of CACPs and about 5 per cent of the cost of
EACH packages.[35]
2.36
Users of CACP and EACH may be required to make a co-payment for certain
services. Providers are usually required to reduce or waiver fees in cases of
financial hardship.
Expected quality service provision outcomes
2.37
Residential and community aged care is governed by the Aged Care Act
1997 (the Act) and the User Rights Principles. The legislation is
administered by the department and sets out the objectives for the aged care
sector:
-
to promote a high quality of care and accommodation for the
recipients of aged care services that meets the needs of individuals;
-
to protect the health and well-being of recipients of aged care
services;
-
to ensure that aged care services are targeted towards the people
with the greatest needs for those services;
-
to facilitate access to aged care services by those who need
them, regardless of race, culture, language, gender, economic circumstance or
geographic location;
-
to provide respite for families, and others, who care for older
people;
-
to encourage services that are diverse, flexible and responsive
to individual needs;
-
to help those recipients to enjoy the same rights as all other
people in Australia;
-
to plan effectively for the delivery of aged care services; and
-
to promote ageing in place through the linking of care and
support services to the places where older people prefer to live.[36]
2.38
Whilst the Aged Care Act 1997 (the Act) and its subordinate
instruments including the User Rights Principles refer to the concept of
'quality of care', they do not provide a definition. Rather, approved
residential and community care providers must comply with a number of standards
set out in the Quality of Care Principles 1997. These include the
Accreditation Standards; Residential Care Standards; Community Care Standards
and Flexible Care Standards.
2.39
The Residential Care Standards comprise three principles:
-
Residents' physical and mental health will be promoted and
achieved at the optimum level in partnership between each resident (or his or
her representative) and the health care team.
-
Residents retain their personal, civic, legal and consumer
rights, and are assisted to achieve active control of their own lives within
the residential care service and in the community.
-
Residents live in a safe and comfortable environment that ensures
the quality of life and welfare of residents, staff and visitors.[37]
2.40
The Community Care Standards comprise seven principles as follows:
-
Each care recipient and prospective care recipient (or his or her
representative) is to have access to information to assist in making an
informed choice about available community care services.
-
Each care recipient is to receive quality services that meet his
or her assessed needs.
-
Each care recipient (or his or her representative) is enabled to
take part in the development of a package of services that meets the care
recipient’s needs.
-
Each care recipient should be enabled where possible, and
encouraged, to exercise his or her preferred level of social independence.
-
The dignity and privacy of each care recipient are to be respected,
and each care recipient (or his or her representative) will have access to his
or her personal information held by the provider.
-
Each care recipient (or his or her representative) has access to
fair and effective procedures for dealing with complaints and disputes.
-
Each care recipient will have access to an advocate of his or her
choice.[38]
2.41
The department noted that quality in health care is a multidimensional
concept, encompassing a range of issues and areas including:
-
access, referring to the capacity of all individuals to receive
the same standard of service provision;
-
appropriateness, referring to the extent to which the benefits of
an intervention outweigh the risks associated with the same intervention;
-
technical proficiency (as distinct from technical efficiency),
referring to the clinical application of current best practice in skills and
knowledge;
-
continuity, referring to the extent to which a specific episode
of service provision is integrated into an overall care plan;
-
safety, referring to risk avoidance and harm minimisation in care
delivery;
-
acceptability, referring to the degree to which a given service
addresses the 'expectations of informed...consumers';
-
efficiency, referring to the maximisation of benefits or outputs
(e.g. health) for a given level of inputs (e.g. costs); and
-
effectiveness, referring to the impact of a particular
intervention upon clinical outcome. Importantly, key elements of clinical
outcome have been noted to range from survival to the quality of life of the
survivor.[39]
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