Chapter 7
The question of inequity in user payments
Older persons should remain integrated in society,
participate actively in the formulation and implementation of policies that
directly affect their well-being and share their knowledge and skills with
younger generations.
Principle 7 of the United Nations Principles for Older
Persons
Introduction
7.1
This chapter considers user payments between different groups of aged
care clients with focus on payments within residential and community aged care respectively
as well as in comparison with each other.
7.2
The chapter also explores the views of some providers that greater
flexibility is required in the aged care system to accommodate clients with the
capacity to pay for services. It also highlights views of providers that
greater flexibility in regard to payment and care options is required and
explores options including accommodation bonds for residential care and the
decoupling of residential accommodation and care. The chapter also considers a
concurrent view of many providers that a shift is required in the service and
care relationship in aged care from that between government and provider to
that of provider and client. In this regard, emphasis was placed on the need
for a client-based approach which enables flexibility to respond to the
changing needs of such clients and which emphasises continuity of care at the
expense of aged care classifications.
Concerns of residential and community aged care providers
7.3
A substantial number of residential and community aged care providers
held the view that there are inequalities in user payments in the aged care
sector. Anglicare Australia argued that there is an inequality in user payments
'across the whole spectrum of aged care services, from HACC through to high
level residential care' and that instead:
... aged care services should be looked at as a continuum of
care (with individuals being able to move flexibly both between levels of
services, and in and out of the system, as their needs change). A consistent
platform for means tested fee setting, and for the payment of subsidies, should
be set across the system. Those with high levels of wealth and income who are
able to pay should fully meet the costs of their services and care, while those
with limited or no capacity to pay should have the cost of their care
subsidised at a fair and reasonable level.[1]
7.4
The Aged Care Association Australia (ACAA) held that there is 'considerable
inequality' in how a person is treated in the aged care sector depending on
where they enter the system, whether community, low care residential or high
care residential'.[2]
However, of greatest concern to the ACAA and many other residential aged care
providers was the fact that unlike low care residents, high care residents are
not required to pay accommodation bonds.[3]
This issue is addressed later in the chapter.
7.5
In relation to community aged care, Alzheimer's Australia argued that:
Varying user payments do create difficulties in community
care, leading to consumers being uncertain as to how much they are going to
have to pay for different services.[4]
Aged Care Funding Instrument
7.6
The Australian Government subsidies the provision of residential aged
care to those approved to receive it. Each resident is provided a payment of a
basic subsidy plus any supplements that the resident is entitled to.[5]
On 20 March 2008, the Aged Care Funding Instrument (ACFI) was introduced as a
new system to assess the amount of the basic subsidy. Under the ACFI, all
existing permanent residents who entered residential care before 20 March 2008
retain their basic subsidy at the level determined under the former Resident
Classification Scale (RCS) but were gradually be assessed under the new ACFI
with full replacement of the RCS complete by April 2009. Of the status of
existing permanent residents, the Australian Government noted:
These pre-20 March residents will only move to the new ACFI
basic subsidy if the rate determined under the ACFI exceeds their
grand-parented rate under the former scale by more than $15 for the regular
annual assessment or $30 for an ad hoc 'major change.' The level of basic
subsidy for respite residents will continue to be at set rates determined by
the ACAT's assessment of the resident as high or low care.[6]
7.7
Whereas the RCS comprised appraisals of aged care residents which were
rated on a classification scale of one to eight with associated funding of a
'daily basic subsidy' tied to each classification, the system underpinning the
ACFI centres on 12 questions that apply to aged care residents, each with four
ratings from A to D.[7]
According to the Aged Care Industry Council, the ACFI was intended to cater for
the 'increasingly high needs of high care residents'.[8]
7.8
Mr Andrew Stuart, First Assistant Secretary of the Department of Health
and Ageing (the department) stated in this regard:
ACFI provides funding on the basis of care level. Taken
together the planning arrangements and the funding arrangements try to secure
access for a variety of people and then fund appropriately according to their
care need.[9]
7.9
Aged and Community Care Victoria (ACCV) held the view that as an
assessment tool, the ACFI has the potential over time to:
...streamline the method of assessing resident care needs when
compared to the former RCS system. The strong caution is that the potential for
streamlining systems is being compromised due to the continuation of other
burdensome compliance obligations, including those under the aged care
accreditation system.[10]
7.10
However, the ACCV noted that as a funding tool, there were concerns
across the industry about the ACFI in terms of the levels of funding allocated.
The ACCV argued that whilst the ACFI was intended to cause a shift in funding
from lower to high care, the lack of additional funding and subsequent
redistribution of current funding from the current pool will 'inevitably cause
gaps and issues'.[11]
7.11
In evidence before the committee, Mr Gerard Mansour of the ACCV
continued:
The ACFI, in effect, only distributed funding from low-care
residents to high-care ones. This is the consequence of changing any funding
model without allocating significant additional resources. We now have a
growing and increasing number of residents with increasingly high care needs.
The consequence is clear: an increasing number of Victorians will be denied
access to a residential home care place because providers receive zero or
minimal funding, despite the fact that they will have ACAT assessment.[12]
7.12
According to the Royal College of Nursing, Australia (RCNA),
the ACFI focus on high care has re-shaped aged care services ensuring that:
...an access issue is developing for low-care where people with
social isolation or anxiety states are not funded in a sustainable way ($0–$6
per day) and are therefore not able to be admitted. As well, the effect of
shifting resources from low to high care with no additional funding has overall
consequences for staffing, building, equipment and risk management.[13]
7.13
Dr David Cullen, Department of Health and Ageing commented on ACFI
assessment for low level care:
Low-care rates vary from $0 up to...$6 or so. The vast majority
of people who enter for low care are at the higher end of that spectrum. It is
certainly true that there are some residents who are now assessed under the
ACFI and who receive an assessment for $0 or $6, but there were also some
residents assessed under the RCS who received $0. There were also some
residents who were assessed under the previous hostel care instrument who
received $0.
It is certainly true that, as a matter of policy, successive
governments have sought to encourage community care so that residents who
require very low levels of care have received over years—and this goes way back
before 1997—lower and lower levels of subsidy so as to encourage them to remain
in the community. At the same time, community care was uplifted so that there
would be something there for them. But the vast majority of residents who enter
at low care are funded towards the upper end of that spectrum of funding.[14]
7.14
UnitingCare Australia maintained that the ACFI has not been developed
through the determination of the real costs of delivering care and
accommodation to residents.[15]
According to the RCNA, the $15 funding hurdle is arbitrary and prevents funding
from being matched to resident care needs.[16]
The ACCV argued that the $15 funding barrier should be abolished before
existing residents can access the new ACFI funding. According to the ACCV, this
barrier is a 'clear attempt to artificially 'limit'' funding to match care
needs.[17]
Grant Thornton Australia also maintained that the subsidy allocations under
ACFI (and the previous RCS) are largely arbitrary because research into the
cost of delivering care and accommodation has not been conducted.[18]
7.15
The RCNA maintained that the low entry authorised by the Aged Care
Assessment Teams (ACAT) if often inconsistent with the ACFI assessment and that
there is some confusion related to the ACAT determined high care/low care
category split which has yet to be resolved:
As a result, bonds levied for low care have to increase.
These bonds currently average around $250,000 preventing many from accessing
low care when they need it.[19]
7.16
This position was supported by Catholic Health Australia who argued that the ACAT were 'deliberately assessing some people as High care so
as they will not have to pay a Bond':
In one case an ACAT assessed a resident as High care but when
assessed under the ACFI, attracted Nil funding for Activities of Daily Living
(ADL), Nil funding for the Behaviour Supplement (BEH) and Nil funding for
Complex Health Care (CHC).[20]
7.17
The ACCV also voiced concern that the ACFI will result in those with
higher care needs being targeted, further accentuating inequalities.[21]
7.18
Catholic Health Australia noted that under the ACFI, of the 64 funding
levels, only 12 are low care and of them, 50 per cent generate less care
subsidies than was the case under the RCS system. As a consequence, providers
are, according to Catholic Health Australia, finding fewer incoming residents
assessed as low care with a 'number attracting too little funding to be
admitted'.[22]
7.19
Management Consultant and Technology Services and ACCV argued that
inequalities in user payments exist with ACAT-assessed residents on RCS
categories 6, 7 and 8 unable to obtain subsidies under the ACFI.[23]
According to the former, minimum ACFI payment for all clients to assist with
bed, board, food, cleaning and laundry costs would bridge the gap between
funding and actual costs.[24]
7.20
Grant Thornton Australia noted that under the ACFI, the funding level is
now so low for potential residents that 'it is not feasible to admit them
unless they can afford to pay a substantial accommodation bond'.[25]
The risk therefore is that such people may not have access to community care
services to remain at home or live in conditions where the provision of
community care services is not possible. Moreover, Grant Thornton Australia argued that whilst the ACFI is expected to provide a greater weighting towards
high care needs:
...the overall impact of this initiative is only a
redistribution of resources under the same basic framework and the net change
in subsidy flow will be negligible after grand parenting provisions expire.[26]
7.21
ECH Inc, Resthaven Inc and Eldercare Inc maintained that the ACFI
weighting towards high care residents will cause a reduction in admissions of
people assessed as requiring low care and that whilst people requiring low care
will not be accepted into residential care, there will be a concomitant
reduction in bond revenue.[27]
7.22
The Aged Care Association Australia WA and Aged and Community Services
WA maintained that the ACFI had focused funding on high residential care
services adversely impacting funding provisions for low care which in turn will
have a negative impact on community care services. Of the consequences, the
organisations noted:
The current funding for low care services is becoming a
deterrent for future admissions and this will have a very serious impact on the
capacity of community care services to continue to deliver care for the growing
demand within our wider community.[28]
7.23
Aged and Community Services SA & NT noted that the increasing trend
whereby clients were moved straight into high care from the community
implicated the revenue raising ability of providers from low care accommodation
bonds which implicated the viability of low residential care.[29]
7.24
According to UnitingCare Australia a transparent method of estimating
input cost increases which are relevant to the aged and community care sector
and capable of being subjected to external review and analysis is required.[30]
Grandparenting
7.25
As part of the transition to the ACFI from the RCS, the RCS 'saved rate'
for existing residents will continue to be grandparented until either the
person's care needs increase to the extent that an ACFI rate becomes payable or
the resident departs care. Therefore, subsidies will continue to be paid at the
existing rate (plus indexation) for a resident on an 'RCS-saved rate' until
either their care needs increase to the extent that an ACFI rate becomes
payable or the resident is discharged from the aged care home.[31]
7.26
The role of grandparenting in relation to the ACFI was explained by Mr
Stuart of the department:
... it is true that the amount of funding for the most frail
residents in aged care is going from $128 to $171 over a period of four years.
A part of the reason for that is that, in introducing the ACFI, the government
was grandparenting existing residents who are in aged care on the RCS if the
provider would be better off as a result of that grandparenting. That
grandparenting comes at a very considerable cost because what you are saying on
the introduction of ACFI is, ‘We will only allow providers to win; we won’t
allow them to lose.’ The impact of that is a considerable net cost to
government. As a partially offsetting cost reduction, the government has chosen
to phase up the maximum fee for the most frail residents.[32]
7.27
The ACCV voiced concern regarding the financial viability of the aged
care industry once the grandparenting impact had worn off and stated that:
Aged care providers currently receive vitally important short
term financial protection from the negative effects of the funding
redistribution due to the ACFI grandparenting provisions. This means that
residents who would otherwise move to 'lower' ACFI funding rates under the new
system will be replaced by new entrants.[33]
7.28
Similarly, UnitingCare Australia noted that without grandparenting, one
of its providers would lose $13.94 per resident per day in relation to 1,167
residents or 72 per cent of resident conversions to ACFI.[34]
7.29
The ACFI introduces 64 funding points (compared to the eight funding points
under the RCS) which are designed to enable greater flexibility in matching
funding to resident care needs. However, the concern of a number of submitters
including ACCV is that whilst the ACFI is intended to encourage a shift in
funding from those with lower care needs to those with higher care needs, the
funding system has been introduced with 'minimal additional funding'. The ACCV
argues that the real effect of this 'has been for current funding to be
redistributed from the existing pool' which will result in gaps and issues.[35]
7.30
Wintringham voiced concern in relation to what it regards as a lack of
interconnection between funding and aged care assessment undertaken by the Aged
Care Assessment Service (ACAS):
There is no direct, apparent link, however, between the
criteria the ACAS teams use for their assessment, ACFI assessments and the
siloed funding linked to each assessment and made available to provide
appropriate care. We have repeatedly found that a client's care needs are far
more complex and so – far higher and more expensive to provide than their
assessed funding level.[36]
7.31
A number of residential aged care providers shared the view that the
$10, $20 and $30 cap on the maximum ACFI subsidy for high care residents should
be scrapped immediately.[37]
The Echuca Benevolent Society stated that the
cap should be replaced with 'suitable payment for the care being carried out,
that is required for each resident in our facilities'.[38]
7.32
Mr Stuart, Department of Health and Ageing, responded:
The ACFI is an instrument that is designed to give an overall
return to an aged-care home. We do not expect to pay through the ACFI for a
particular staff member to stand by a particular bed. Because there is an
increased flow of funding to the sector because of the grandparenting cost to
government, the government has chosen to put a cap on the growing increase in
care funding as well. I am simply explaining government policy to you.[39]
7.33
Despite such concerns regarding the ACFI, Catholic Health
Australia reaffirmed that the instrument was still in its infancy. Mr Martin Laverty
continued:
In defence of the ACFI, the ACFI has not been in place for 12
months at the moment. I think when the ACFI is reviewed, which is scheduled to
occur by the end of this year I understand, it is appropriate that there is a
specific focus on the applicability of the ACFI to address these particular
behaviours and we are certainly going to be looking at the review of the ACFI
to ensure that it is meeting the specific needs of those who have previously
been homeless.[40]
Conclusion
7.34
The committee recognises the ACFI as an instrument that seeks to
simplify the system and its administrative burden. Whilst it recognises that
there are a range of views on the ACFI, the committee appreciates that the
system requires adequate time to operate before meaningful analysis of its
effectiveness can be undertaken. However, the committee recognises that a
thorough review of the ACFI is both timely and vital to establish its impact on
the sector. For these reasons, the committee encourages the Department of
Health and Ageing to consider and address the concerns of aged care providers
in the forthcoming ACFI review.
Aged Care Assessment Teams
7.35
The Aged Care Assessment Teams (ACAT) are responsible for assessing and
approving older persons for Australian government subsidised aged care
including residential aged care, Community Aged Care Packages (CACPs), Extended
Aged Care at Home (EACH), and dementia-specific Extended Aged Care at
Home-Dementia (EACH-D). The Australian government provides funding to the
states and territories to operate and manage the ACAT whilst the states and
territories also provide funding to the ACAT.
7.36
A number of residential aged care providers raised concerns regarding
the complexities involved when a client moves from low to high care including
the circumstances where an ACAT re-assessment was required and of the funding
gap that results from delays in re-assessment.[41]
Mr Ken Baker of Baptistcare elaborated:
That process is currently complicated, because to go from low
care to high care you have to be re-ACATed, and that becomes a real hurdle for
us to get through, especially if someone comes in under the current system
where they might come in as a low care and we do our initial assessment and
find that they are high care. Our funding stream is completely interrupted by
the dependence on the ACAT teams to come back and to reassess that person,
which they are not always that prompt in doing because, as far as they are
concerned, they have done an assessment.[42]
7.37
A gap in funding provision can result as Ms Anne-Marie Archer of the
Aged Care Association Australia Western Australia explains:
With regard to the provision of the aged-care assessment
teams, an assessment is made for entry into aged care. Invariably, it is made
at the time in a situation that is outside the residential care environment.
When someone comes into a care environment, they are assessed then by the
provider. The assessment of the care needs in that care environment could be
different from those of the ACAT or their care needs may have increased in that
time. They do not get funded for the care that they receive in a particular
environment up until such time as the ACAT comes back and does a
reassessment—for example, if they have gone from low care to high care.
There is an enormous differentiation in the amount of money
it costs to care for someone in different levels of care. That amount of money
is lost in the system up until such time as the ACAT comes out and provides yet
another assessment. There is no ability to recoup that, regardless of the fact
that they have been providing that care, and that is why one of the positions
of the association is to ensure that potentially in the future the ACAT service is to really assess eligibility for care as opposed to simply determining high and
low care.[43]
7.38
Anglicare stated before the committee that the delay in ACAT
re-assessment had cost them about $100,000. Dr Lynn Arnold of Anglicare Aged
Care South Australia explains:
To the extent that we still have low care and high care, the
changes have resulted in our being significantly financially impacted by delays
not being retrospectively funded. What that means is that when somebody moves
from low care to high care in that assessment, which can take as little as two
weeks, it is not a problem when it does, but when it takes two months or more
it is a problem. There being no retrospectivity has cost us something like
1,800 days of funding in the last six months, at a cost of about $100,000. That
represents quite a significant cost impact for us.[44]
7.39
Mr Wayne Belcher of The Bethanie Group suggested an alternative:
The assessment issues under ACFI: it
seems appropriate to me that ACAT, rather than saying, ‘You are high care or
low care,’ should rather say, ‘We have assessed you as being appropriate for
residential care, as being appropriate for community care, or either, and we
can encourage you by pointing you to appropriate providers who may be able to
meet your needs,’ and let the existing regulatory framework between providers
and clients pick up the necessary service provision.[45]
7.40
Ms Anne-Marie Archer of the Aged Care Association Australia WA also
suggested an alternative solution to the committee:
It would be far more advantageous for the industry if there
could be just a simple gatekeeping process as opposed to a stipulation and
having to come back out. This is extra resources for the state, but it is a
huge impost on providers financially if there is a shift in that person's care
needs and they cannot get a staff member out, because they invariably have an understaffing
issue themselves.[46]
7.41
Recommendation 10 of a 2007 National Review of the ACATs (the review)
addressed the issue of re-assessment:
That the Australian Government considers revising the
legislative requirements for re-assessment of those residents:
-
moving from low to high care
within an aged care complex where the low and high care facilities have
separate provider numbers
-
who enter an aged care facility
with a low care approval but require high care.[47]
7.42
The consolidated response to the review by Australian, state and
territory governments released in February 2008 stated:
The Department notes this recommendation. In regard to
legislative changes this is a matter for the Australian Government to consider
in the context of other aged care reforms currently underway.[48]
7.43
Implementation of such a recommendation would address providers concerns
raised before the committee. The committee therefore urges the Australian
Government to implement the 2007 recommendation with a view to reform of the
requirement for reassessment under the two conditions outlined by the national
assessment.
Recommendation 22
7.44 The committee recommends that the Australian Government implement
the recommendation of the 2007 National Review of Aged Care Assessment Teams
and review the legislative requirement for re-assessment of those residents:
-
moving from low to high care within an aged care complex where
the low and high care facilities have separate provider numbers;
-
entering an aged care facility with a low care approval but who require
high care.
7.45
Concerns were also raised during the course of the inquiry about the
time it took for the ACAT to conduct assessments. In this regard, Mr Ian Yates
of COTA Over 50s Ltd stated:
7.46
We would also emphasise that, in terms of inequity and according to the
official data, both anecdotally and my understanding of it, access to
assessment around the country varies in terms of time and quality. I am sure
that departmental staff could talk to you about pursuing that issue between the
Commonwealth and the states. For the sake of proposing a benchmark, we have
said in here that, if something has arisen and you have a need, you ought to be
able to get an ACAT assessment within five working days. Getting the support
early that that assessment provides you with is quite critical, because people
can escalate in terms of their needs if they are not addressed quickly. In some
places you can get ACAT assessments very quickly and in other places waiting
lists of weeks and months are not uncommon. I do not think the government of
the Australian Commonwealth should accept that. We, as consumer advocates, find
that unacceptable.[49]
7.47
Such concerns were also voiced by the 2007 review which noted:
The key findings that relate to the efficiency of ACATs are:
-
ACATs demonstrate
varying levels of efficiency. Some teams are overwhelmed with demand and are
unable to effectively improve processes to improve efficiency. Others are
meeting high demand.
-
Many teams are
contributing considerable team time to the development and review of processes,
forms, templates, education programs etc. There is little evidence of
systematic sharing of resultant improvements. This also appears the case with
work being sponsored at the jurisdictional level – advances made in one state
or territory are not obviously being shared or extended across others.
-
The external
operating environment that ACATs work in can make their role inefficient. They
have to be cognizant of an increasing number of programs, eligibility criteria
and service providers.[50]
7.48
In review recommended that Aged Care Assessment Program (ACAP) officials
explore and implement strategies to 'increase the efficiency of the ACATs,
especially those with long waiting times for assessments' and that a national
breakthrough collaborative or extensive use of clinical practice improvement
model should be considered in this regard. This recommendation was taken up to
the extent that the government committed ACAP officials to explore methods to
achieve efficiency improvement.[51]
7.49
In response to concerns relating to both the delays experienced in
securing ACAT assessments and concerns regarding re-assessment requirements, Mr
Andrew Stuart, First Assistant Secretary of the Department of Health and Ageing
(the department) stated:
There are two things being done. One is that the government
has already passed legislation late last calendar year to make unnecessary a
number of previous kinds of ACAT approvals, a number of which actually go to
some of the improved flexibility that people have been asking for at the
committee hearing, including today. If you are approved for a high care package
at home then you do not have to be separately re-approved and reassessed for a
low care package at home, for example, and to reduce the number of times that a
person has to go before an aged care assessment team to have it confirmed that
they are still eligible for residential care when time passes.
We are very significantly reducing the number of aged care
assessment teams assessments that are required and are now moving towards
negotiating with the states and territories about a new aged care assessment
team agreement, which will take effect from 1 July, which will seek to turn
that reduced workload into much quicker turnaround on some of the assessments
that have been lagging. We are going to be wanting to put in place particular
standards and milestones to be met.[52]
7.50
The committee is concerned about this apparent information gap between
the experiences of providers and the reforms introduced by the department. The
question remains as to whether this disjuncture reflects a reality which,
despite such reforms, has changed little for providers. The committee urges the
department to launch an information campaign on the ACAT directed at both
providers and clients in order that evident deficiencies in information are
addressed.
Recommendation 23
7.51 In light of disparities in information regarding the Aged Care
Assessment Team (ACAT) assessments and re-assessments between the Department of
Health and Ageing and involved providers, the committee recommends that the
department launch an information campaign on recent reforms to the ACAT.
7.52
Other providers emphasised that greater national consistency was
required in terms of the assessment process to enable greater efficiency.
Catholic Health Australia's Mr Martin Laverty stated in this regard:
If there were a genuinely national system you would have a
consistency as to how assessments were being made. I have to acknowledge that
because we are assessing an individual’s characteristic, obviously there is an
opportunity for differing subjective opinions as to the capabilities of a
person, but when you have one aged care provider saying to us, ‘We know that
different members of ACAT teams are producing different results’, that does not
suggest a genuinely national approach.[53]
7.53
In relation to the issue of national consistency, the 2007 review stated
that:
The review team identified variations in interpretation of
the true intent of the ACAP. The Guidelines are interpreted in many different
ways, often determined by individual values and experiences of staff, based on
their work in other parts of the health/aged care continuum.
The vast majority of data collected about ACATs is throughput
based, with a focus on timeliness and volume. This supports the notion that
ACATs are about volume – as the axiom suggests people only manage what they
measure. The program needs to be able to articulate what a quality service is
and to develop performance measures accordingly. These
can then be used to measure team performance, allow for team benchmarking and
can be incorporated into funding agreements and accreditation programs.[54]
7.54
The review's recommendation highlighted the need for nationally
consistent performance indicators:
That ACAP Officials seek expert advice to develop a set of
validated, specific assessment tools and develop criteria for their use in the
ACAT context. This work should build on current models and work undertaken by
the Department and other work sponsored by the Australian Health Ministers
Advisory Council (AHMAC). The criteria and indicators employed should be
consistent with those used in HACC and other community care programs, as
appropriate.[55]
7.55
The consolidated response to the review by the Australian, state and
territory governments agreed with the recommendation and affirmed that:
Standardised assessment clinical tools are strongly supported
and should lead to greater consistency of ACAT assessments and recommendations.
The adoption of a set of standardised assessment tools for ACATs will also
improve equitable access to services and overall be an important building block
in achieving a stronger relationship between the outcome of assessments and the
appropriate level of care.[56]
7.56
The committee acknowledges that standardisation in relation to the ACAT
is a 'work in progress' and strongly supports efforts in this regard.
7.57
A number of aged care providers before the committee highlighted that,
as a means of ensuring greater national consistency, more was needed to be done
for the ACAT to operate as a single nationally consistent program. According to
Catholic Health Australia, ideally ACAT would then serve as a genuine single
national entry process into aged care. Of the idea, Catholic Health Australia's
Mr Martin Laverty stated:
Quite specifically we think that the ACATs, the aged care
assessments teams that the Commonwealth government funds but the states and
territories operate, should in fact be a single, nationally consistent program.
It does not necessarily have to be operated by the Commonwealth but it should
certainly have a greater control by the Commonwealth. We have also said that
the entry point should be more visible to the community, just as Centrelink is
a visible entry point for those seeking the support of the welfare system. At
the moment we do not have a clear understanding as consumers as to how to take
advice on how to enter and seek guidance through the aged care system. It is
usually a family member who is guiding or making decisions on behalf of someone
entering aged care. If that person has not experienced the aged care system before
it is the case that they do not really know where to start and they do not know
who to trust as they seek their advice. We think the Commonwealth can address
that by establishing a single entry point for aged care around Australia.[57]
7.58
Part of the role of ACATs is to assist older people and their carers to
establish what sort of care meets their needs when they are no longer able to
manage at home without assistance. According to the department, ACATs also
provide information on 'suitable care options and can help arrange access or
referral to appropriate residential or community care'.[58]
Conclusion
7.59
The committee appreciates that the role of the ACATs should be that of a
single national entry point for clients and their families and encourages the
department to consider suggestions of this nature with view to simplify the
system to the fullest extent possible for aged care clients nationwide. In
addition to this, the committee recommends that a parallel education campaign
be conducted to inform both new and potential aged care clients of the aged
care services available to them and of their rights and entitlements in
relation to such services.
Recommendation 24
7.60 The committee recommends that the Department of Health and Ageing
review methods directed to affirming the ACAT as a single nationally consistent
program which genuinely serves as a single entry point to aged care services.
The review should entail dialogue with aged care clients and providers as well
as liaison with state and territory health departments.
Recommendation 25
7.61
The committee recommends that the Department of Health and Ageing
conduct a national education campaign directed at new and potential aged care
clients to raise awareness of the aged care services available to them including
the role of ACAT and of their rights and entitlements in relation to such
services.
Accommodation bonds for high residential aged care
7.62
A number of submissions held that there is an inequity with regard to
the payment of accommodation bonds with many arguing that such bonds should be
payable for residential high care and not just low care (hostels) and high care
with extra service status.[59]
Indeed, Aged and Community Services SA & NT held that low care residents
paying an accommodation bond are cross-subsidising high care residents paying
an accommodation charge or concessional residents covered by the government.[60]
7.63
A similar view was expressed by Aged and Community Services Australia:
Increasingly since 1997, low care residents paying an
accommodation bond have been cross subsidising high care residents paying an
accommodation charge and concessional residents paid for by Government. This is
becoming increasingly the case since more new residents are entering as high
care and the average value of bonds has increased with the value of residential
property in many parts of Australia.
This inequity is compounded by the fact that high care,
accommodation charge paying residents are treated differently to bond paying
low care residents if they sell their home. For high care entrants any lump sum
they hold, and use to pay their accommodation charge, is included for pension
assessment purposes whereas the lump sum bond payment made by a low care
resident is exempt.[61]
7.64
According to Aged and Community Services Australia, the industry's view
that the ACFI will result in a re-targeting of residential aged care to clients
with higher care needs are being confirmed by early indications and that such a
situation will 'further accentuate the inequalities' between low care and high
care clients.[62]
7.65
As accommodation bonds are refundable deposits, they entitle the
provider to the interest on the bond during the period in which a resident is accommodated.
Under the current arrangements, only clients in residential low care and not
clients in residential high care can pay accommodation bonds as Grant Thornton
Australia explained:
Unlike low care services, current legislation prevents high
care residents from contributing accommodation bonds upon admission to high
care facilities. As a result, most new high care facilities must be financed
through external borrowings and the financing costs have a major impact on the
viability of providers that operate on such tight margins.[63]
7.66
In 2007, Professor Hogan noted the impact of this policy:
Rejecting of their use in ordinary high care reflects a
failure to understand their critical funding role. It denies the role for
simple 'user-pays' policies to meet the needs for care of an ageing population
in coming decades ...[64]
7.67
The Echuca Benevolent Society held that no bonds in high care is unjust
because it gives rise to cross-subsidisation between low and high residential
care creating with it two tiers of residents.[65]
The Productivity Commission expressed the same view in its September 2008
research paper:
The current pricing arrangements covering accommodation
payments give rise to inefficient cross-subsidies between low and high
residential care and distort investment decision-making. The problems posed by
these anomalies could be addressed in a number of ways. One previously proposed
option would be to require all residents who can afford to make a capital
contribution to pay either a lump sum bond, or a daily or periodic rental
charge (at a level equivalent to the bond).[66]
7.68
The Tongala and District Memorial Aged Care Service Inc expressed the
opinion that moving way from the no bonds in high care policy would provide
some immediate relief and reduce complexity in the system, provide greater
fairness with all eligible residents paying the same type of accommodation
payment and remove the existing two tiers of residents.[67]
Of the policy, Baptist Community Services of NSW and ACT stated:
If the 'no bonds in high care' stance of various Australian
Governments over the years is maintained, it is critical that the current
accommodation charge for high care be reviewed. Data from the Stewart Brown
Aged Care Report 2008 shows that providers are supplementing the day-to-day operational
costs with income from capital. The result of this is high care facilities
operating at a net trading loss per day of $7 and low care also showing a net
trading loss per day of $4.[68]
7.69
A number of witnesses argued that accommodation bonds are vital in
meeting the costs of capital funding which is not currently adequate under
funding arrangement. Indeed, in his 1997 report, Professor Warren Hogan noted
that, for this reason, accommodation bonds have provided an important source of
funding for the expansion of aged care facilities:
Accommodation bonds have been the sole means of bringing
flexibility to an otherwise rigid pricing and funding system arising out of
central planning. Bonds have allowed access to funds for meeting the servicing
costs of capital funding not otherwise effectively provided through government
subsidies and payments, or approved charges on residents. Access to
accommodation bonds in low care and extra-service high care has also helped
support provision of facilities in high care, especially in those facilities
where a mix of care between low and high is offered.[69]
7.70
The Western Australian Government highlighted that the unavailability of
accommodation bonds to high care providers has hindered new construction and the
upgrade of existing facilities in Western Australia. In addition:
This situation has been further exacerbated by the 2008 Aged
Care Act Accreditation requirements where all providers irrespective of the
level of care, are required to undertake substantial capital investment to meet
new privacy standards.[70]
7.71
ACCV held the same view, arguing that the ongoing reduction as the
proportion of residents entering low care has ensured that the level of
accommodation bond will continue to increase, which in turn, providing further
fuel to the argument that low care residents effectively cross-subsidise the
facility capital realising costs across the industry.[71]
Similarly, Japara Holdings stated that accommodation bonds should be introduced
into high care enabling provides to receive the capital required to build new
facilities and complete renovations on older-style facilities to bring them up
to best practice standard.[72]
Catholic Health Australia further noted:
The regulations surrounding accommodation bonds have had the
effect of reducing available capital investment within the sector....The current
disparity between who is charged an accommodation bond and who is not creates
perverse incentives.[73]
7.72
The ACAA highlighted the consequences for high care residents of their
ineligibility to pay an accommodation bond:
...a person who enters high care and who is not exempt from
making a capital contribution will be required to pay a daily accommodation
charge of $26.88 per day plus a basic daily care fee and if appropriate, an
income tested fee.
If, as is often the case, a resident needs to liquidate their
home to pay these contributions, then any funds held on the sale of the home
will be considered when assessing income and assets for pension entitlement.
Whereas the same person entering residential low care and
paying a bond will have the bond exempt from any assessment for pension
entitlement.[74]
7.73
In instances where self-funded retiree couples have non-home assets and
one of the couple needs to enter residential care, half the assets of the
couple are assessed for the person entering care and brought to account. If the
person is entering low care, they will be required to pay a bond. However, if
the couple's non-home assets are held in superannuation, part of their funds
will have to be released to pay the bond. According to the ACAA, this can 'on
occasions leave the person not requiring care in a seriously depleted financial
state'.[75]
7.74
In the case of high care residents, any lump sum held by them which they
may use to pay their accommodation charge is included for pension assessment
purposes whereas accommodation bonds in low care are exempt.[76]
Professor Hogan noted in 2007 that bonds for high care was attractive to
management compared to charges because:
...of their contribution to the capital needs of the aged care
entity; whereas accommodation charges simply meet the costs of servicing the
capital which still must be raised and, most importantly with debt, repaid.
Accommodation bonds offer a self-replenishing means of funding.[77]
7.75
Mr Cam Ansell from Grant Thornton Australia noted that whilst the
introduction of bonds would by itself 'create some impetus and the opportunity
for stimulating the sector into developing':
It would also create a much greater interest in the
for-profits outside of the existing group. As a short-term solution, I
certainly think that that would have a very positive effect. It does not take
aside the fact that there are many other aspects of the industry that are
heavily overregulated. While that might be a good short-term fix, I think there
is a strong argument to go back and look at the broader system to see what we
can do to encourage investment and sustainability in the longer term.[78]
7.76
Whilst a substantial proportion of residential aged care providers
supported accommodation bonds for residential high care, others expressed
caution with the option. Aged and Community Services Australia, was one case in
point as Mr Greg Mundy explained:
What we have argued for in our submission is to take a step
back and say, ‘The concept we should think about here is rent’—that anyone who
occupies any space, whether it is an office, a hospital or their home, has to
pay something that covers the replacement value of the accommodation that they
are in. That is the underlying concept. If you are living in a high-cost city
like Perth or Sydney then the rent is going to be higher than in a low-cost
place such as Dubbo or Wagga or somewhere like that. It would much more
sensible to link those two things in the same property market so that you allow
people to realise the value of assets that have appreciated in that place and
pay a price that matches the value of those assets.
Once we have established that concept that people should pay
a fair rent for their accommodation—and the government should pay for those
that cannot afford it—how they pay is a second-order question. If people want
to pay it upfront in a lump sum, we should discount what they pay, because that
is a value to us. If we allow people to pay from their estate, we would need a
reasonably tight contract around that, but we should charge more because the
interest cost applies to us.
But if everyone paid on an equal basis for what they are
getting, with protection for the majority of our clients who are going to be
income poor, then I think we could offer people choices in terms of how they
pay. Bonds might well suit lots of people. The pension system treats bonds very
kindly and, unless the government was going to change that, most older people
would be better off capitalising their rent and paying it once. But, as for the
concept that people should pay the replacement costs of the accommodation they
are in, I find it hard to find convincing arguments against that.
One of the old, traditional objections to the bond system is
that, for people going into high care, where the average length of the stay
might be six or seven months, you are adding one more stress factor in what is
already a very difficult period in their lives. Let people pay a monthly rental
while they see how things pan out. And long-stay high-care
residents—essentially those with dementia—could go down the capitalisation
route. They are going to have to sell the house anyway. It would be convenient
for people. For those who genuinely are in a form of palliative care, we would
charge on a fortnightly or monthly basis like any other form of accommodation.
So bonds could be part of the solution, but I think there is room to open up that
concept a little bit and make sure that it is fair and equitable.[79]
7.77
Moreover, it was noted that the introduction of bonds in high care would
not necessarily impact on providers who focus on meeting the needs the
financially vulnerable. The Brotherhood of St Laurence is one such provider
which operates a concessional rate at approximately 85 to 90 per cent for
residential care. Of the issue of bonds for high care, Mr Alan Gruner of the
brotherhood noted:
As I mentioned, we only have about 10 per cent of our
residents actually pay bonds anyway, so it is not an area we particularly
target. My own personal opinion is that there is a need within the industry for
something to happen in aged care, in terms of funding, because the growing need
is in the provision of high care. But without adequate revenue, it is becoming
more and more difficult to provide those sorts of services. So whether it is
through a bond or another means I think there needs to be an allocation of
funding within the high-care area to assist service providers to provide their
services, particularly building costs, as well as service provision.[80]
7.78
The Australian Nursing Federation, which does not support bonds in high
care, recognised the need for an alternative to bonds which have traditionally
funded capital costs particularly in light of the fact that 70 per cent of aged
care residents are entering high care.[81]
7.79
Mr Stuart of the Department of Health and Ageing raised three issues for
consideration in relation to bonds for high care. First, people going through a
rapid health related transition would, have at the same time, to make immediate
decisions about their financial affairs. Mr Stuart noted two other matters:
My second comment is in relation to equity. The discussion we
have just been having applies equally to bond charging, because bonds are an
uncapped financial contribution. In low care, particular residents are worth
more to the provider than others because an uncapped bond can be charged for
some and not for others. Currently, in high care, that is not the case. In high
care, we have people whose needs are more urgent and less discretionary than
those in low care. So you would have to think very hard about what increased
regulation you would need to put in place to ensure access for people with low
assets into high care if you were going to allow an uncapped bond to be
charged.
The third area is in relation to prudential requirements. The
bond is by its nature essentially an unsecured loan from the resident to the
aged-care provider. The aged-care provider is not a financial institution. The
government has managed this risk—and you would appreciate the kind of risk we
are talking about, particularly since we have been experiencing a global
financial crisis—by making the industry as a whole responsible if a particular
provider defaults on the bond amounts...
What I am raising is the issue that the size of bond holdings
would then potentially be more than double and there would be a large number of
providers who would never have held bonds before. Under those circumstances,
the department would be thinking very hard about prudential arrangements...[82]
Conclusion
7.80
The committee appreciates that accommodation bonds for high care are
widely supported by residential aged care providers. It also notes that many
providers believe that the high / low care separation is artificial and based
on a classification of the ACFI with no relation to the support needs of the
resident population.[83]
The committee believes that the full ramifications of the implementation of
bonds in high care are yet to be analysed and should be included in the
recommended holistic review of flexible funding options for the sector.
Decoupling of residential aged care and accommodation costs
7.81
In light of ongoing concerns in relation to the adequacy of aged care
funding as well as the disparities between high and low residential care
funding, decoupling costs of residential care from accommodation costs was
suggested. Mr Geoff Taylor of the Aged Care Association Australia WA stated of
his organisation's support for such an initiative:
The problem we have with paying wages and the care side of it
is purely to do with the poor indexation of our funding system and, if it were
indexed properly, the care side of it would cover the wages...The families should
have the choice of the accommodation, based on what they can afford and what is
provided, and the government should subsidise properly for the concessional
residents who have no assets, who cannot afford to pay anything.[84]
7.82
Mrs Susan Parr of Aged and Community Services Tasmania (ACST) held a
similar view:
It is the belief of our members that a separation needs to
occur between care and accommodation. A range of options for accommodation
could well be developed, and care is the area where we should be striving for
excellence. Accommodation should be linked, we believe, to market forces. That would
free up enough of the sector for it to be able to operate as a business while
care services remain as highly regulated as they need to be and funded accordingly.[85]
7.83
Whilst in support of such an initiative, Mr Greg Burgess of the
Freemasons' Homes of Southern Tasmania highlighted the need for a safety net:
ACST suggested—and our organisation has in its
submission—that the separation of care and accommodation should be considered.
The deregulation or the market forces would then look at the accommodation
issues. Certainly there would need to be a safety net built into any process to
cater for supported residents, as there is now with rental assistance, for example,
for low-income pensioners with rental payments. Allowing market forces to
determine and for the industry to provide options as to the quality and size of
accommodation may well be a very reasonable option to be pursued across all
areas of resident classification—high and low. But I stress there would need to
be a safety net for supported residents.[86]
7.84
Mr Ian Yates of COTA Over 50s argued along similar lines:
You should have a classification instrument for care, and
paying for accommodation should be a separate issue. You should work out what
your user contributions are and then users and their families should be able to
pay them flexibly in a way that suits them—and what will suit one may not suit
another.[87]
7.85
Mr Andrew Stuart, First Assistant Secretary of the Department of Health
and Ageing also raised concerns of a context emerging whereby:
...aged-care housing costs were completely open slather and to
be borne by the resident because that would lead to the exclusion of less
well-off people from care. Because residential care housing and residential
care in the end come as a package people have to gain access to both the
housing and the care to get residential care. So if housing costs became open
slather depending on what people could afford, then you would really have to
worry about access.[88]
7.86
Mr Stuart noted, moreover, that if the industry were allowed to 'charge
open slather on housing costs', it opened up the question of how the government
should respond for concessional residents who currently make up approximately
50 per cent of the current population:
Does it pay open slather for them too? I do not think so. I
do not think that would be efficient for the taxpayer. There would have to be
some thought about ramping up the regulatory requirements on access if you were
to uncap accommodation costs.[89]
7.87
At the same time, a number of witnesses held the view that decoupling or
unbundling residential aged care services had considerable potential. As one
case in point, Grant Thornton Australia stated:
Whilst the principles would need to be developed with
reference to the government’s broader health and welfare policy framework, the
unbundling of residential aged care services would provide the foundation for a
system that enhances consumer choice and facilitates sustainability for both
providers of care and the Australian taxpayer.[90]
7.88
In its 2008 research paper, the Productivity Commission noted that
clients of community care receive subsidised personal and health care, they
generally have to meet their own accommodation costs and living expenses from
private means or from income support payments. However, at the same time
residential care clients may receive a subsidy for accommodation and everyday
living expenses as well as subsidised personal and health care. Of this, the
Productivity Commission noted:
These inequities arise because the public financing
principles generally applying in the health system have been applied to all
components of residential care, even though some components are more akin to
services that are typically provided through the welfare system.[91]
7.89
According to the Productivity Commission, unbundling care and
accommodation may address this discrepancy:
‘Unbundling’ the service components that make up aged care
provides a way of ensuring that appropriate and consistent public financing
principles are applied to each of these components across different types of
care. It is also a way of ensuring consistency between aged care services and
equivalent services provided through the broader health and welfare systems.[92]
7.90
The Productivity Commission listed a number of challenges
involved in unbundling the costs of aged care services. At the same time,
however, it held the opinion that arguments in favour of unbundling in order to
'achieve equity across different types of care, better targeting of the public
subsidy, are fundamentally sound and warrant detailed analysis.'[93]
7.91
Whilst raising caution in relation to concessional residents,
Mr Andrew Stuart of the Department of Health and Ageing also recognised the
validity of decoupling:
On the plus side: it
recognises that people have housing costs in their own homes, so why shouldn’t
they have housing costs when they are in residential care? That seems like a
reasonable statement to me.[94]
7.92
However, Dr David Cullen, Assistant Secretary of the
Department of Health and Ageing held the view that as of March 2008 the
government had 'essentially split care and accommodation funding':
In residential care now the accommodation is paid for by the
resident, essentially through their basic daily fee and through their accommodation
payment. Where they cannot afford to pay for it, it is paid by the government
through the accommodation supplement. That takes care of the accommodation
side. On the care side there are the care subsidies and the resident makes a
contribution through their income tested fee. So there already is a clear split
between payments for accommodation and care.
One of the key structural features of the 2008 changes was
that we did ensure that all residents from an accommodation point of view in
high care were worth exactly the same amount to the provider. The government
pays all of the accommodation supplement for the poorest residents; the richest
residents pay all of the accommodation charge themselves; and in between those
the government’s payment is reduced at the same rate as the resident’s payment
is increased so that everyone is worth exactly the same. That mechanism means
that you have no access equity issue. Providers have no reason to choose one
client over another, so you can have a relatively loose regulatory burden as
far as access is concerned.[95]
7.93
The committee recognises that the government has taken steps
towards what is effectively the decoupling or unbundling of residential care
and accommodation. However, it also recognises that additional measures can be
taken which would enable greater flexibility for both residential care clients
and providers. However, it considers that further analysis is required to
establish the ramifications of such measures on aged care funding and service
provision. For this reason, the committee recommends that the Department of
Health and Ageing conduct a review into decoupling of residential care and
accommodation.
Recommendation 26
7.94 The committee recommends that the Department of Health and
Ageing analyse decoupling of residential care and accommodation. Such a review
should consider and assess the views, concerns and recommendations of involved
stakeholders including the Productivity Commission.
Community aged care
7.95
Concerns regarding residential aged care funding regarding the
distinction between high and low care in terms of funding are also felt in
relation to funding across community aged care. Indeed, a substantial number
of witnesses maintained that inequalities exist between the elderly receiving Home
and Community Care (HACC) services and those on Community Aged Care Packages
(CACP) and Extended Aged Care at Home (EACH) packages.
7.96
COTA Over 50s held the view that inequalities in user payments existed
between fees for Community Aged Care Packages and comparable sets of services
delivered through the HACC program.[96]
7.97
The ACCV highlighted the repercussions of different payments between
HACC and CACP:
HACC clients pay less for an equivalent range and amount of
services than those on the other packages. Lower fees for HACC services have
seen some clients refused CACP, because it costs more.[97]
7.98
The Tasmanian Government Department of Health and Human Services also
held such concerns. Ms Janet Carty of the department elaborated:
It is not only the disconnect between HACC and packages; it
is the disconnect also within the packages, because there are gaps and overlaps
– so we agree with all of that. We are working with the Australian government
to try to improve that. There are also different funding regimes, different
reporting regimes and different quality regimes.[98]
7.99
Alzheimer's Australia held the same position but from a different
viewpoint:
Because of the difficulties associated with means testing
most providers charge only the minimum amount for CACPs and EACH.
In regard to HACC, there exists a national fees policy which,
among other things, ensures that a person will not miss out on a HACC service
because of inability to pay, and sets limits on the total level of fees for people
receiving multiple services, but the policy allows each State and Territory to
set its own fees. This has led to considerable variation across States.[99]
7.100 Aged and Community Services SA & NT detailed the allocation
differences and consequences:
The allocation differentials between HACC (a few thousand
dollars up to $75,000 +) and CACP ($12,000), EACH ($42,000) and Each D
($46,000) result in difficulties for providers trying to care for clients'
changing needs. It is not uncommon for a provider who may have a CACP client to
not be able to offer an EACH package because they have none available.
Individuals have by necessity had to seek another provider.[100]
7.101 One of the primary concerns raised in relation to HACC was articulated
by Care Connect:
HACC clients are able to access far more hours of service on
a low fee as opposed to a lower number of hours per week they can access on a
Commonwealth package of care; as such we see a trend of clients seeking to
remain on HACC to high care levels and not transition onto a packaged care
program.[101]
7.102 According to the National Ex-Service Round Table on Aged Care (NERTAC),
the 'failure of the HACC Program to implement a consistent fees policy has
created inequity and introduction of co-payments in other programs has created
difficulties for consumers and providers'.[102]
Similarly, Catholic Health Australia maintained that:
HACC service user fee arrangements vary between jurisdictions
and when compared with the regulated variable fee arrangements under
Commonwealth funded community care packages, act to discourage consumers from
moving from HACC to the packages despite their increased support needs.[103]
7.103 COTA Over 50s and Alzheimer's Australia held the view that the current
gap between CACPs and the various EACH packages is too great.[104]
As Alzheimer's Australia noted, the CACP subsidy is currently $34.75 per person
a day whilst the EACH subsidy is $116.16 per person per day, and the EACH-D
subsidy $128.11 per person per day.[105]
In addition, COTA Over 50s held that the differential in some contexts between
fees for CACPs and comparable services provided through the HACC program
created inequalities.[106]
7.104 According to Catholic Health Australia, part of the problem rests with
the fact that no benchmark of care costs have been undertaken in relation to
community aged care. The body highlighted that CACPs, EACH packages and EACH-D
packages have 'only one funding level each regardless of the hours of care each
individual package recipient requires'. For this reason, according to Catholic
Health Australia, the service provider is required to 'pool the total package
income received and fund the varying hours of care accordingly'.[107]
7.105 The Aged and Community Services Association of NSW and ACT held that
funding is unable to meet assessed needs:
In community care the set rate for care provision of CACP,
EACH and EACH-D clients only provides 3 levels of subsidy. This results in
declines in the level of services offered to clients as package funding is
unable to meet assessed needs. A New Strategy for Community Care – The Way
Forward includes the review of fees in community care however this process
needs to be driven forward quickly if older Australians are to be able to
receive appropriate quality care.[108]
7.106 The Council of Social Services of New South Wales maintained that CACPs
provide a 'very low amount of service' as a result of the levels to which they
are funded compared to EACH:
What is CACPs' role, given it can no longer provide a hostel
level of care service at the existing levels of funding, as originally
intended. Many CACPs try to top up their support using HACC services, even
though it's not allowed, as the amount of hours isn't sufficient for many
clients to support them appropriately. The difference between support levels of
CACP and EACH is significant with no package support level in between.[109]
7.107 Ms Derryn Wilson of the Municipal Association of Victoria argued that
rigidity within community care was a central concern:
I think the rigidity is more between the home and community
care services and the CACPs and EACH packages. It is about the community care.
I think what everybody finds is that people’s needs change over time, and they
can go up and down. You have a system that says, ‘If you are around this level
of care, you get your services from that, and if you are at this level of care,
or you need some additional things that are not available here, you have to tip
over into that. There are different providers in the two systems, so people
have to swap into another set of arrangements with different fees and different
personnel. But often a lot of their core needs remain the same. They will still
need help with housework. They might still need help with showering. They might
still need a bit of home maintenance. Particularly for people who have already
been getting those services in HACC, it is quite a jump to have to go into a
care package, primarily sometimes to get case management because case
management is not available in HACC. So I think what we are saying about the
rigidity is it is this problem of silo programs and not allowing people to have
a range of needs met over time and up and down through the one provider, the
one system of local care.[110]
7.108 The ACCV argued that there funding distinctions between CACP and EACH
implicated the ability of providers to cater for individual client needs:
From a client or user perspective, the enormous gap in
funding between the current CACP and EACH packages means providers are simply
unable to cater for individual client needs as they become more frail. Unlike
the new ACFI system which has 64 funding points, there are only three points in
relation to commonwealth funding community aged care packages: CACP, EACH and
EACH Dementia. To compound and limit the flexibility of providers to match care
to client needs, individual elderly clients must receive a further ACAS assessment before they can move from the CACP level to the EACH level.
The consequence is clear. Those receiving CACP packages will
have substantial increases in their level of frailty or complex care needs and
yet be ineligible for additional funding support until they are assessed by the
ACAS as needing an EACH package. This substantially limits the capacity for
providers to meet care needs.[111]
7.109 A number of providers took the view that community care packages should
be streamlined into a single system. Alzheimer's Australia argued that all HACC
funding for aged people should be managed by the Commonwealth to enable an
'integrated approach to packaged care across CACPs, EACH and HACC'.[112]
ECH Inc, Resthaven Inc and Elder Care Inc held the same view and argued for a
'single, seamless system of home and community aged care'.[113]
Baptist Community Services of NSW and ACT maintained that it was difficult for
people to move easily between CACPs and EACH because of availability issues and
that such arrangements needed to be streamlined if the system 'is to be able to
support people efficiently and effectively'.[114]
7.110 Similarly, Anglicare Australia held that barriers between
community-based aged care services as well as the barriers between community
and residential care should be eliminated to enable people to move 'flexibly
between modes of care as their needs change.' It held that:
For many people, the pathways to community-based and
residential aged care services are complex and daunting. This is amplified by
many people entering the system as a result of a crisis event. Now is an
opportune time to work together to make the service system more streamlined,
easier to navigate and more efficient.[115]
Conclusion
7.111 The committee appreciates the concerns of community aged care providers
in relation to funding and its implications on the provision of quality
services to Australia's elderly population. For this reason, the committee
reaffirms its recommendation to establish benchmark of care costs for aged care.
Notwithstanding the establishment of benchmark of care costs, the committee
acknowledges that the funding and services for community aged care need to be
expanded in light of the demand for such services which is only set to
increase.
Recommendation 27
7.112 The committee recommends that the Australian Government expand community
aged care funding and services to meet growing demand and expected quality
service provision outcomes.
7.113 The committee also acknowledges the views of many providers in relation
to dissolving the demarcations between and within community and residential
aged care and streamlining services for the purposes of continuity of care and
to emphasise care needs over service categories. However, the committee takes
the view that such an initiative can only be considered during the course of an
overarching review of the aged care sector as a whole.
Client-based aged care system
7.114 A number of aged care providers expressed the view that the aged care
system is extremely complex, rigid and inflexible and argued that the funding
inequalities within the system were in part, a consequence of an aged care
model which is neither client-centred nor client-focused. Suggestions to ensure
greater flexibility particularly in relation to funding arrangements focused on
the need for a client-based system presupposing a shift from a relationship
which is government/provider focused to that with a client/provider focus. Mr Cam
Ansell of Grant Thornton Australia stated in this regard:
I think an ideal situation is that, rather than this being a
constant negotiation or relationship between the government and the provider,
in the future it is necessary for the relationship to be one between the
aged-care provider and the resident in the discussions about how they provide
financial support in terms of their accommodation; whether it be in the form of
an up-front payment—call it accommodation bond if you will—or they may prefer
not to do that. They may prefer to hold on to the money or the assets and pay
an ongoing fee or rental, like we do in most other areas of our society. I
would like to see perhaps a little bit of a view of: what does the consumer
want? What are their preferences?[116]
7.115 Mr Ian Yates from COTA Over 50s argued for an entire focus shift:
We believe that the whole system needs to move to a more
consumer directed care model, with much greater involvement of consumers and
their carers. All of that is based around a paradigm of our needing to see
older people as not having a 'best by' date. We need to see them as being able
to make contributions and being supported, with their strengths built upon,
encouraged and challenged. That is how we ought to recast the system that we
have at the moment.[117]
7.116 Ms Robyn Batten from UnitingCare Australia expressed the view that what
is required is planning based on assessed need rather than available supply.[118]
Ms Batten continued:
Effective consumer directed care will not be achieved by just
cashing out service funding. It requires consumer involvement in overall system
and service design and it is really important at the design phase. Access to
independent advice about care options, life planning support and the
opportunity to choose when and how to access informal and professional
services, sometimes concurrently, and training and technical support to service
providers will be required to ensure individual budgets are implemented in a
way that provides a high level of satisfaction to consumers.[119]
7.117 Wintringham also stated its concern of the current model:
Aged care funding is provided in distinct silos. Funds are
limited to specific amounts dependent on care recipients meeting certain,
established funding criteria.[120]
7.118 The need for system flexibility to enable continuity of care was also
highlighted by witnesses before the committee. One such example is that of
situations where clients seek to move from one facility to another and a new
operator is required to either accept an existing accommodation bond or refuse
admittance. The ACAA highlighted concerns in this regard:
Family members often indicate a wish to relocate a loved one
and are often able and willing to pay the additional contribution required by
the new facility.
However, providers must accept the existing bond agreement
and even if a relative wishes to pay a lump sum contribution on behalf of the
resident, the Aged Care Act 1997 requires the provider to return these funds to
the care recipient or their estate not to the person paying the bond on behalf
of the resident.[121]
7.119 Similar concerns were raised from other providers about community care
including Mr Nick Mersaides of Catholic Health Australia who stated:
The fact is that on the community care side it has evolved as
a type of service well behind residential care. Residential came first. As
other witnesses have put to you, the current arrangements around community care
are quite restrictive and rigid in terms of being able to, as your care needs
increase, transition to a higher level of subsidy in the same way as you would
in residential care. We need to have the same calibration of subsidy levels in
the community care sector as we have in residential. Indeed if you want to have
a real choice there has to be a signatory between the level of subsidies
available on the care side; putting aside accommodation which does not apply,
there needs to be some symmetry and consistency of policy in those levels of
subsidies between residential and community.[122]
7.120 Mr Ian Yates from COTA Over 50s held the view that HACC needed to be
more client focused:
With HACC, in some cases, you are providing what is
essentially community-development infrastructure and services, but we would
like to see it being much more client focused than it is at the moment. We
think the principal distortion for HACC is that it gets used to create packages
because the packages or care system in the community is insufficient. The
really big thing that our consultation has told us for over a decade is that
consumers want more and more robust community care and community care with much
more flexibility in it. They want it to be available at the time they need it
and so that it meets their needs. There are too many people in, firstly, the
healthcare system and, secondly, residential care because they cannot get
access to community care.[123]
7.121 The committee appreciates the concerns of providers in relation to the
aged care system and recognises that the emerging future challenges for the
sector require considerable planning in close association with both current and
future aged care clients themselves. For this reason, it suggests that its
recommended all-encompassing review of the aged care sector take a client-based
approach in order that its findings are client focused. Current practices and
future challenges should be considered through the lens of aged care clients.
Recommendation 28
7.122 The committee recommends that the all-encompassing review of the residential
and community aged care sector take a client-based approach in order to ensure
that its findings are client focused.
7.123 As part of calls for greater client-based care, the need for more flexibility
to enable a user-pays system for clients who have the ability to finance their care
services was raised during the course of the inquiry. This debate centred
around a lack of flexibility on the part of the system which ensures that
choices of services are limited as are the payment options available to clients
as Mr Stephen Teulan of UnitingCare Australia explained:
Because of their various personal financial situations, some
people would prefer to pay up front for a refundable amount. Some would prefer
to say, ‘I don’t want to pay at all now. I would like it charged to my estate.’
There is everything in between in terms of daily charges, annuity purchases and
everything else. At the moment you cannot do those sorts of things, because the
system is completely and utterly inflexible. Both consumers lose out because
ultimately they will have lack of choice and they will have fewer services and
providers lose out because they cannot provide the services into the future.
There will not be the capital to do that. We say the government should pay the
actual cost for those people who cannot afford to pay themselves. Those people
who can afford to pay should have choice based on various types of services. It
should be means tested so they should never be in financial hardship, but there
should also be flexibility in the payment arrangements so they can work out
their own circumstances. We would be happy with that.[124]
7.124 The Productivity Commission highlighted that one of the key challenges
to the sector is the growing and increasingly diverse range of elderly
Australians who are expected to demand higher quality aged care services and
greater choice in the services they are offered:
The nature and composition of aged care in the future is
being inexorably shaped by two emerging trends: the growing diversity of the
aged population and their expectations of greater choice in the availability of
services; and a growing capacity for some older people to self-fund a greater
part of their retirement needs (including for aged care).[125]
7.125 A number of providers maintained that given the increasing demand and
expectations on care services, greater flexibility is required to enable those
who have the means to pay to do so. Catholic Health Australia was one such
proponent of this view as Mr Martin Laverty explained:
...we note the need for a change in the approach to care fees.
Our position is that those who have the ability to contribute to their own care
should. Those who do not have that ability must be protected by a rigorous
safety net, and that is the role of the Commonwealth government to ensure that
the concessions that are available for consumers without financial means are
legitimately equal to the cost of the provision of their care; at the moment we
suggest there is a substantial gap between the actual concession provided by
the Commonwealth and the actual cost of delivering care.[126]
7.126 Mr Cam Ansell of Grant Thornton Australia expressed the view that the
role of government needs to be that of ensuring access to aged care for those
who cannot afford it rather than 'limiting the options available for people who
can'.[127]
7.127 A number of witnesses identified decoupling residential aged care and
accommodation as the means of ensuring greater flexibility to enable clients a
choice and ability to finance their own care services where able.[128]
Baptistcare is one such provider as Mr Robert Bunney explained:
As we have said, you need to separate the accommodation
element from the other elements, and then people can have a choice. Yes, there
will be people who cannot afford the most basic level of accommodation and that
is where government comes in and says, 'All right. We will fund this level,'
and the government might decide it will fund shared bathroom facilities.[129]
7.128 Whilst the committee recognises that there have been initiatives
undertaken by the Australian, state and territory governments to rebalance
public and private financing of aged care services, it believes that there may
be scope for greater flexibility in this regard. However, it notes that this
issue is entwined with that of the decoupling of residential aged care and
accommodation debate and is grounded on common consensus that greater
flexibility on the part of the aged care funding system is required. For this
reason, the committee encourages its suggested holistic review of the aged care
sector to encompass options including decoupling of care and accommodation,
greater flexibility to enable payment and service options for clients, and a system
designed to meet aged care client needs.
Recommendation 29
7.129 The committee recommends that the all-encompassing review of the aged
care sector consider options to enable greater flexibility in relation to
payments and services directed at providing a client-centred aged care system
for Australia.
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