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Media and political mudslinging over aged care issues has led to a lot of misconceptions about the aged care industry. This is damaging not only to the industry as a whole but to all those families trying their best to navigate the system and secure quality aged services.

Measured articles about aged care seem to be few and far between so I thought I’d dispel some of the aged care myths that are doing the rounds.

MYTH 1: The aged care industry is in crisis

One of the biggest myths we often hear is that the aged care industry is in crisis. Isolated reports of abuse or neglect in aged care have been attached to misleading commentary about the state of the aged care industry at large, leading many to believe that these issues are rife across the industry. While one such case is too many, they are far from being common place. The sad truth is the staggeringly high number of elder abuse cases in the broader community are in many cases being perpetrated by the older persons own family members.

The problem with this sort of coverage is that it doesn’t provide a dialogue about what other providers are doing right and how situations in all aged care facilities can be improved. Worst, it only contributes to the heightened sense of anxiety and distress already being experienced by older adults and their families currently considering support services and alternative housing arrangements.

While a lot of the finger pointing of late has come from politicians themselves, it’s interesting to note that $3 billion has been withdrawn from government aged care funding budgets by successive governments since 2013. In truth, the current funding arrangements are unsustainable yet we continue to try and prop up a now rapidly failing structure when as a nation, we need to be urgently addressing the need to develop an alternative aged service industry model. An alternative model which is reflective of the realities of government (tax-payer) funding constraints, private asset values and how people want to age and receive services. There needs to be a much broader conversation about ageing in Australia and the enormous and far reaching implications beyond aged care. We are wasting precious time and resources focusing on exactly the wrong things.

Meanwhile, reforms have continued to be passed to make sure that quality care is at the forefront of the industry and each facility has mandated standards of care that they must adhere to or they will lose their license to operate. This aged care quality system has resulted in the overwhelming majority of Australians in aged care receiving high-quality care that meets the most stringent national standards. The aged care sector is also committed to continuous improvement.

However, if we are to see meaningful improvement in the standard of aged services delivery, then the standards by which providers are judged need to be consumer standards, not regulatory mandates. Aged care is a ‘services industry’ with periodic overlaps to the healthcare sector, its primary focus should be on quality of life and how we support people to optimise quality, for them.

Introduction of an alternative industry model where the consumer (including families) are in the driver’s seat, will deliver far higher quality service outcomes than any regulatory framework ever will. Providers need to be prepared to embrace clear, open transparency with consumers and involvement of family and service recipients as partners, not adversaries.

MYTH 2: The aged care industry makes a $1 billion-dollar profit – businesses care more about profits than people

This has become a particularly popular myth as talk of our ageing population leads people to believe that companies are entering the aged care industry just to make money. The figure that has been widely reported is a $1 billion aged care industry profit. Five minutes on google and you’ll find numerous factual documents, published by reputable groups including this excerpt from Deloitte Access Economics, Australia’s aged care sector: economic contribution and future directions 2016.

“In 2013-14 there were over 1 million aged care places supplied across Australia, and the aged care sector as a whole generated around $18 billion in revenue. While residential aged care places represented only 18% (189,300) of total aged care places, this type of aged care generated 82% ($14.8b) of total revenue and received 73% ($9.8b) of total Commonwealth funding to the aged care sector. In total, the Commonwealth provided around $14.2 billion in funding to the aged care sector in 2013-14. Source: ACFA, 2015.

Read the paragraph, analyse the data:

  • Across the industry, 1 million aged care places
  • $18 billion in revenue

Apply some grade six maths to the $1 billion profit. Across the industry, $1 billion on $18 billion equates to an average profit margin (before tax) of just 5.55%. That is an industry average, for some the margin is slightly higher, for many it’s much lower and they struggle to break even. Looked at another way, $1 billion profit (before tax) on 1 million aged care places is an average of just $1,000 profit per package, per year.

A 2.5% increase in the cost of wages without a corresponding increase in revenue (funding) and many providers would potentially be insolvent.

Of the 950 approved aged care providers in Australia, 70 per cent are not for profit or government providers and out of the remaining 30 per cent ‘for profit’ providers, two-thirds are single site facilities. Contrary to the opinion that profit taking is rife across the sector, 1/3 of all providers are making a loss.

With such a significant proportion of the industry teetering on the very brink of financial viability it is nothing less than reprehensible to have some of the country’s most senior political figures making nonsensical statements in the media designed to deliberately damage the reputation of the aged care industry as a whole.

MYTH 3: Aged care support workers are untrained to care for our elderly and more registered nurses are needed

Staff ratios in aged care is a huge topic at the moment. Particularly around the ratio of registered nurses to residents. To be clear, there is not a single piece of ‘valid’ research globally to support mandated nursing ratios, not in hospitals and certainly not in aged care. One doesn’t need to look very closely at the language being used to realise all the arguments being put forward are simply emotive and/or politically motivated.

Additionally, this conversation often neglects the increasingly important role of Lifestyle Support Assistants who carry out the bulk of the care and support offered in aged care. Aged services and residential aged care facilities are not hospitals any more than high-level in-home care is hospital-in-the-home – neither are healthcare models, that’s what we have hospitals and GPs for and people accessing aged support services aren’t “patients”

The primary objective of the raft of regulatory and funding changes to aged care introduced over the last few years have all been aimed at wholesale substitution of residential aged care (RAC) for in-home care services (same service level, different environment). That’s what bi-partisan federal policy initiatives have driven and that’s also what consumers want. So, if we are to mandate nursing ratios in RAC and at the same time continue to expand the substitution of RAC with in-home-care, exactly how is it proposed we mandate nursing ratios in that setting?

One Registered Nurse DOES NOT ‘care for’ 100 residents on their own. One registered nurse might well be the specialist clinical health professional on duty (out of hours) to assess and facilitate the healthcare needs of a group of 100 residents, but clinical nursing care is not the only service RAC residents need or receive. That’s why, in addition to the registered nurse resources, RAC facilities also employ or contract numerous other staff including, personal care assistants (in large numbers) and allied health professionals such as occupational therapists, physiotherapists, podiatrists, exercise physiologists and more.

Rather than ‘unqualified workers’, as they are often referred to as in media reports, dedicated personal carers receive tailored training through certificate courses to provide quality day to day care to residents. They are ably supported by a whole team of medical and allied health support in the form of registered and enrolled nurses, doctors, specialists, physiotherapists, occupational therapists and more. Focusing on just one role in this team of carers misses the point of the importance of a holistic approach to aged services.

Sean Rooney, Chief Executive Officer Leading Age Services Australia says that the provision of appropriate levels of care for older Australians in residential care facilities is not as simple as the number of staff on duty, or arbitrary staffing ratios.

“The care provided must comply with the most stringent national standards. The basis for deciding on staffing levels and their skills mix needs to be driven by the actual care needs of individual residents,” says Mr Rooney.

“Flexibility to adjust the staffing mix as the profile of an aged care facility’s residents change is a very important consideration, as is the adaptability to move to new models of care driven by innovation and new technology.”

A much higher priority than mandating staffing ratios is the urgent need to consider the industrial relations framework (awards) applicable across the aged services industry. Greater flexibility is urgently needed both from the staff perspective but equally in order that genuine consumer directed care services models can readily be applied within RAC facilities.

MYTH 4: Aged care facilities provide hospital level care

The issue of staff ratios and medical staff in aged care often relates back to the growing belief that aged care facilities are medical/healthcare facilities. They are not. They are actually aged care homes – a place for ageing people to live where they can be cared for and supported when they feel they can no longer live in their own home. While they provide clinical care and support, aged care facilities are not hospitals and they don’t provide hospital level care. Typically, RAC facilities don’t employ doctors, in fact one of the greatest day-to-day challenges for providers is to actually get a doctor to visit residents.

This issue came to the fore this month when Queensland’s Health Minister Steven Miles made comments in a media article and on live radio declaring that Queensland nursing homes are dumping residents at hospitals to save costs.

His claims stretched even further when he said that the practice appeared to be a ‘business model’ for some aged care homes that were ‘exploiting a loophole’ by refusing to hire medical staff so they could send sick residents to hospitals and save money.

“Cut back on nursing care, and when residents decline and need medical support call an ambulance and send them to a public hospital. Providers know that once an elderly patient is admitted … they are unlikely to ever leave, saving the nursing home from the costs,” Dr Miles told The Courier-Mail.

Again, these claims focused on registered nurse ratios and perpetuating the myth that only registered nurses have the skills to diagnose a resident and prescribe the appropriate medication. The truth is that general registered nurses can’t actually diagnose and prescribe, the conditions of registration and legislation including the Poisons Regulations actually prohibit them from doing so – this is what we have doctors for. Under Australian law, diagnosis, prescription and treatment are in fact the exclusive professional domain of Medical Practitioners (MBBS). If we are going to lobby to have more nurses in aged care, shouldn’t we also be wanting to add doctors into the mix? What about pathology and radiology, RAC facilities don’t have these either? Where do we draw the line?

It comes back to the fact that aged care homes are not hospitals, as Mr Rooney mentioned in his response to these claims, Australians are now entering residential aged care with increasingly complex care needs.

“The Government’s aged care data site (GEN) says that as at 30 June 2016, 92% of older Australians in residential aged care are assessed as having high care needs,” says Mr Rooney. 

“The increasing burden of chronic disease, coupled with increased longevity, we are now expecting aged service providers to fill a void which is actually the realm of the Healthcare Industry – but without the funding.

“Aged care facilities are not hospitals. When older Australians in nursing homes require urgent medical attention that cannot be provided on site, it is our industry’s duty of care to transfer these residents for treatment in a hospital.”

Of great concern is the fact that such a public statement by the Health Minister strongly suggests that little planning has evidently been done regarding the need to bolster the capacity and capability of acute hospital services and infrastructure in Queensland to meet these increasingly complex medical needs of an ageing population. We are witnessing the early effects of the population ageing phenomena, around one in four Australians will be aged 65 years or older by 2056, according to the latest population projections released by the Australian Bureau of Statistics (ABS). With increased age, comes an increase burden of disease and need to access hospital and healthcare services, yet there are no apparent plans to increase capacity in the healthcare system, just an expectation that old people shouldn’t be coming to emergency departments.

A move to a conversation about ageing in general

While discussion about aged care is welcome, I hope that by raising these issues we can move towards a focus on the facts as we continue to address the needs of our ageing population.

We need to shift the conversation to one about ageing, rather than just aged care. Rather than shy away from the topic, we should be asking ourselves ‘how do I want to be supported as I age?’ and set out to make sure we have a system that truly supports consumer choice.

Do we expect the current and future generation of tax-payers to continue to fund aged services to the extent tax-payers have in the past? If so, the below graph might be cause for some alarm.

Number of working‑age individuals per individual aged 65 years or older:

working age individuals per individual aged 65 years or older

Source: Australian Government (2007)

Aside from tinkering at the edges of quality regulation and funding for aged services, the evidence would suggest that successive governments at all levels (local, state and federal) across Australia have been asleep at the wheel for the past decade with regard to planning and ACTION on ageing and its broad social and economic implications.

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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.