Aged Care Policy Blueprint 2020

Catholic Health Australia (CHA) has called on the Rudd Government to implement major reforms around residential aged care.

The first major reforms of aged care policy occurred under the Hawke Keating Government and CHA warns that the benefit of those reforms has now been exhausted.

CHA has produced a policy blueprint outline the reforms. One in nine residential aged care beds in Australia is provided through services operated by different bodies of the Catholic Church. CHA, as the peak body for these residential and home care services, represents the largest grouping of aged care services in the Australia.

CHA says the blueprint offers a new vision for aged care which it seeks to see achieved by 2020. This vision is of equity of access to aged care services for all Australians, with a preference for those living in socioeconomic disadvantage.

CHA’s key goals for aged care are that:

1. Older Australians receive the care they need in the accommodation of their choice, whether in their own home, in the community or in a residential facility.

2. Demographic based funding will be oriented to ensure the delivery of excellence in person centred, compassionate care.

3. The funding framework will ensure that the care of older Australians is delivered by an appropriately skilled and qualified workforce.

To achieve this vision CHA has produced this blueprint for policy change, which it offers as a plan for how improvements in aged care services can be achieved.

Residential aged care is currently regulated and funded by the Commonwealth. Commonwealth regulation limits the allocation of residential aged care beds and the user fees that can be charged for their provision.

CHA says Commonwealth operational funding is insufficient in that it does not relate to the actual cost of service provision.

Subsequently, it says, in October 2008 the failure of this regulatory and funding mix was highlighted again with overall average earnings for aged care providers having dropped away by 10% in just one year and the estimated average return on investment for new, single room facilities as now 1.1% and falling.

CHA says the challenges being faced in Australia are no different to those being faced internationally. The United Kingdom and Sweden, who have principally funded aged care services from the tax system, are encountering problems relating to the scarcity of revenue. These countries are moving away from solely tax payer funded arrangements. In Australia, aged care funding is not solely tax payer funded, yet the ability to fund it from user charges is unreasonably limited.

CHA says to the extent that the Commonwealth does fund aged care services, its funding is insufficient. From March 2008, a new funding instrument (the Aged Care Funding Instrument) appears to be compounding the problem as high care admissions (that are not able to charge bonds) replace low care admission (where a bond can be charged) and many older people with social and psychological needs (who do not attract sufficient funding under the new instrument) may go without residential aged care due to their lack of financial means or lack of available appropriate residential aged accommodation.

CHA argues reform should not be piecemeal. Rather it should include revision of how consumers plan for their entry into aged care, how they are assessed for entry, how aged care services are licensed for operation, how services are funded, and how staff are trained and rewarded for their role as care givers.

With the Baby Boom bulge expected to peak around 2030, Australia needs to be ready for an increase in demand for residential aged care.

To be ready for the residential aged care needs of the Baby Boom bulge, CHA in this blueprint has provided an assessment of current policy settings, a summary of international comparison, and a policy plan for achievement of aged care reform.

CHA says its plan for reform does not expect Government to fund all service provision – it expects Government to contribute financially in a manner that reflects actual cost of service provision, but it also expects Government to free up current constraints so that consumers can better contribute to their own care where they are financially able to do so.

Within the Blueprint, some of the key recommendations for reform include:

– A new consolidated single funding program linked to actual cost of service provision. Funding of aged care is currently provided by a multitude of Commonwealth and Commonwealth/
State/Territory funded programs. A single, simplified and consistently applied national aged care program would better enable older Australians to receive the right care, in the right place, at the right time.

– Aged Care Assessment Team to be fully funded and managed by the Australian Government.
This service would ensure consistency of eligibility is applied, and that there is no conflict of interest when undertaking assessments.

– Consumer Directed Care. Consumer Directed Care provides choice and control. Consumers are able to choose which services they receive and who will deliver these services and when. CHA believe that aged care service consumers in Australia would benefit through increasing consumer choice by way of vouchers or managed purchasing of aged care as a possible alternative to direct funding of services.

– Localised population based funding. A population approach would facilitate equitable access to aged care services. By establishing indicators of need across regions, Government would be able to ensure greater flexibility and responsiveness in service delivery.

– Removal of limitations on consumer fees. Commonwealth regulation currently prohibits an aged care service from determining the cost of its service that is purchased by the consumer. Reregulation would allow the user fee to reflect the cost of the service, and give consumers choice in the type of service they seek. Safety nets, such as those already provided by Catholic aged care services in the form of subsidised concessional beds would be required for those unable to meet service costs themselves.

– Abolition of the distinction between low and high care. With changes in the needs of those entering care, the technical distinction between low and high care is becoming increasingly irrelevant. The merger of low and high care would also require the review of the regulatory requirements for each category, allowing bonds to be levied for all residential aged care where the consumer and provider agree to do so.

– An innovation fund. Creation of an innovation fund that promotes a leading edge approach to person centered aged care, and ensures the dissemination of this research.

– A National Health Workforce Commission that consolidates all current initiatives aimed at the health workforce planning and development, with a specific mandate to provide skilled workers for community and residential aged care services.

– Increasing Superannuation to 15%. The ability of future retirees to fund their aged care service needs is likely to be directed by the availability of funds at their disposal. Superannuation should be increased to its originally proposed 15%, with consideration to be given to the quarantining of a portion of superannuation payouts to be available specifically for purchase of aged care services.

– Creating insurance products to contribute to aged care. More than 40% of Australian’s are used to the concept of self insuring for their health care. Australia’s health system depends on a strong pool of consumers with private health insurance. Private health funds and other insurers should be given incentives to develop products to fund future aged care.

The blueprint can be downloaded at: http://www.cha.org.au/site.php?id=1660