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There is no doubt that the overwhelming majority of providers and workers within the industry consistently deliver quality services – but we can and should be better.

There is also little doubt that the Aged Care Industry has been impacted by government policy and funding changes over recent years. However, it cannot reasonably be argued that government funding settings are the sole cause of all the industry woes. For many providers, it’s crunch time, time to find a way to meet community expectations or exit the industry.

Home Care Packages

The advent of Consumer Directed Care (CDC) in the delivery of services under the Home Care Package (HCP) scheme is decidedly positive for the consumer, as it ought to be for providers. It has moved the industry model from being a largely maternalistic, closed, provider-centric industry to a competitive customer services industry – or at least it should have. To date, it’s apparent that for the most part consumers are not enjoying the efficient delivery of quality customer service because the industry has failed to adapt.

The numerous, varied and often exorbitant HCP fees structures that currently exist have not been the mandate of government policy, they were initiated by provider organisations. HCP sign-on fees, package exit fees, case-management and administrative fees are all the construct of provider organisations.

The industry-leading HCP providers, those that have embraced CDC for all it promises to the consumer (efficient, effective, affordable, quality service delivery on the consumers terms), are those with zero sign-on fees, zero exit fees, administration/overhead fees of 3-5% of the HCP value and case-management fees less than 10% of the HCP value. Sadly, there are many, many HCP providers charging significant sign-on and exit fees (exceeding $1,000 each in some cases), in addition to case-management and administration fees totally as much as 45% of the HCP value. In simple dollar terms, the difference between the limited number industry leading HCP providers and the rest is in the order of $15,000 to $17,000 on a high care Level 4 HCP. Depending on the providers’ hourly service rate, that can mean as much as 8 hours per week more in direct client services.

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Why the huge disparity?

The industry has been required to offer all HCPs on a CDC basis since July 1st, 2015, having been given notice of the change well beforehand and it’s now April 2018 – coming up to three years. Yet still, many of the established HCP provider organisations have failed totally to adjust their systems, operating/service models and administrative/corporate management overheads and infrastructure to meet the requirements of the new CDC world. Consumers, elderly Australians, are the ones now paying the price for the failure of provider organisations to act. This is not the fault of government or government policy – funds that should be being applied to the provision of services to the elderly in our community, are instead propping up expensive, out-dated, inefficient an unnecessary provider management structures.

As an industry, it is totally unacceptable for us to be arguing for additional tax-payer funds when we have not done all we can to ensure the efficient application of the funds already being provided.

Issues of inefficiency related to the MyAgedCare system and a waiting queue of over 100,000 are totally aside from provider inefficiency.

Residential Aged Care (RAC)

The RAC model (nursing homes) is essentially what most people would consider to represent the “Aged Care Industry Model”. RAC is a 20th Century product, established for the purpose of accommodating hospitalised elderly who were deemed as requiring ongoing support – those who didn’t need to be in hospital any longer but couldn’t go home to fend for themselves – and we needed the hospital bed freed up for sick people needing acute care.

I’ve written a number of times about the need for a 21st Century Aged Care Industry Model, one which meets the needs and expectations of consumers and families. RAC is no longer appropriate, the funding model is insufficient, inefficient and inadequate. ACFI is a nonsense funding instrument which costs providers more to manage than it delivers for service provision – 41% of RAC provider organisations in Australia run at a loss (StewartBrown 2018); the definition of an unsustainable industry.

There is nothing in the previous two paragraphs that any RAC operator would contest. Yet, provider organisations are deathly silent when it comes to proposing an alternate industry model. Instead, we just continue to scream still louder for additional tax-payer funding to prop up the dead horse that is RAC.

At the same time, as has been the case with HCP providers, many of the established RAC provider organisations have failed totally to adjust their systems, administrative/corporate management overheads and infrastructure. In order to reduce costs, some have attempted to restructure their direct care/service models with variable degrees of success and potentially variable degrees of risk to consumers (residents).

Adequate funding is a key driver of quality outcomes in Residential Aged Care, it’s not the only one, but providers are limited by what they have to spend. The questions are: where is the evidence that providers are in fact pursuing optimal organisational efficiency and where are the proposals from provider organisation for alternatives to the current approach?

Between 1950 (ish) and 2030, the tax-payer base in Australia will have reduced from 15:1 (taxpayers per person aged 65yrs and over) down to approximately 3.5:1 (taxpayers per person aged 65yrs and over). There is no more money to be squeezed out of tax-payers pockets, but we expect the number of elderly requiring services to increase by the hundreds of thousands, where will the funds come from?

We require a new Aged Care Industry Model and provider organisations need to drive it, not obstruct it.

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In Summary

As an industry (Aged Care) we cannot argue that we have been exemplary custodians of tax-payer funds.

It is unacceptable that consumer concerns are not adequately resolved at the service provider level and it certainly isn’t reasonable to say that issues of service quality are solely attributable to “funding stresses”. As limited as they may be, the incidence of abuse and neglect are not a symptom of funding stress and we cannot defend them, which is what we are doing by remaining silent in the face of public criticism – perception is reality.

None of us are perfect, we all get it wrong from time to time – we’re human and the community doesn’t expect us to be perfect. They do however expect us to be respectful, to acknowledge and concede our shortcomings and ensure our best endeavours to continually improve.

Aged Care has a problem much greater than that inherent in current funding stresses. The Australian community has entrusted us to respect and care for their loved ones on their behalf; their clear determination is that we have breached that trust. Question is, what are we going to do to regain it?

We need to do much better.

This article first appeared on LinkedIn.

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Nick Loudon
Nick Loudon is Group Chief Executive Officer of Seasons Aged Care and a Board Director of Leading Age Services Australia (LASA). Nick has more than 35 years clinical and executive management experience in the hospital and aged care sector and believes passionately that advanced age is not a ‘disease’. His vision is that aged care with a focus on quality of life and respect for the choices of our elders can be delivered in any location.