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Does aged care need more funding or does the current funding need to be better managed? Seasons Aged Care Managing Director Nick Loudon joined Sabra Lane on ABC Radio National’s AM program on Friday, May 4 to talk about the issues surrounding aged care funding.

Key points discussed:

  • State of aged care services in Australia
  • Need for a code of practice
  • Credentialing system for aged care workers
  • Is more aged care funding needed?
  • Administration fees charged by home care providers


Read Full Transcript

Sabra Lane: It's expected the Federal Government will announce millions in additional spending for aged care next week. Those who work in the sector are hoping for a big boost of funds for in-home care. Currently, more than 100,000 people are on waiting lists for these so-called home care packages. The government has been grappling with how to deal with that huge demand. Some aged care providers say they need more taxpayer funding, but not all providers believe that is the solution.

Nick Loudon is the Managing Director of Seasons Aged Care, which provides aged service care services and homes in Queensland. He's also on the Board of Leading Aged Services Australia, a peak body representing aged care providers and services.

Good morning and welcome to the programme.

Nick Loudon: Good morning, Sabra.

Sabra Lane: How would you describe the state of aged care services in Australia right now?

Nick Loudon: Well, I think there are a number of issues obviously on the funding side of things. But I think also the industry needs to be doing a lot more proactively than simply sitting around saying, "We want to maintain the system as it is and give us more money." I think that clearly, and we'll hopefully see a drive towards this in the near future, that there is a desperate need for the industry to develop a code of conduct for itself and to gradually build on that code of conduct to a point where it's acceptable to rebuild the trust that the community obviously has lost in the system.

One of the other things that clearly needs to happen is that there needs to be a credentialing system for workers within aged care. We have a situation at the moment where employees can be terminated for a number of the gross neglect and abuse things that we've seen in the media of recent times, but there's actually no way that a future employer knows that that person has been dismissed for serious misconduct and can therefore not employ them going forward. Unlike the situation that we have with, for example, registered nurses who are all registered obviously, medical practitioners et cetera, et cetera. There's a place to which employers or prospective employers can go to find out the history of people. We don't have anything like that.

Sabra Lane: Alright, let's break some of that down. The federal government already spends about $20 billion a year on aged care. Is the solution more tax payers' money?

Nick Loudon: In the very short term there is a need for an injection of additional funds. As you said in the opening, where 100,000 people on the waiting list of which 60,000 of those people for home care packages are actually new people on the list; the other 40,000 or so are people needing higher care packages. There is a need to address that in the short term. There's also quite a significant need for an injection of funding into residential aged care as it sits at the moment. Recent reports out of Stuart Brown, a company that tracks the progress of the aged care industry over decades now, have reported that in December of last year as much as 41% of residential aged care providers identified that they were running at a loss in this country. So there is a need for that. There is a need for additional funding around rural and remote services in the short term.

But what we need to be doing beyond that is having a very serious open and frank conversation with the community about how do we fund the provision of aged services into the future. Because we are in a situation now whereby the mid-2020s we'll have somewhere in the order of about 3.5 taxpaying workers for every person over the age of 65. Now in the 1950s that number was around about 15 people paying taxes for people over the age of 65. The system as it is completely unsustainable, yet at the same time we have in Australia a situation where somewhere in the order of 70% of the people who are aged 80 and over actually own their own home outright. So there is an enormous asset base there that potentially could be contributing towards the funding of services for older people as they age. But the prospect of that has been discounted out of hand by the government at this stage-

Sabra Lane: Yeah, just on some other points though. You've also indicated though that some providers are charging ... It seems that they're making a huge profit at the expense of some of the people who are needing care, that they're charging 45% of the value of the money that governments give them for these home care packages. That seems pretty unbelievable, and you've said that some of them need to wake up to themselves.

Nick Loudon: I have said that, but what I haven't said though to correct you is that they're making huge profits. They're not making huge profits. Those organisations are still running on the bare bones. What they haven't done is adjusted their infrastructures in their overheads in order to be able to get more of those funding to delivery of services. That money is not going into profit, it's actually going into sustaining rather large and inflated corporate infrastructures that have been established over a long time. It's not to denigrate those organisations necessarily either. They are the people, the organisations, that have been in this industry for decades. They have established systems and services that are being developed on the basis of pre-existing and prior policy settings. What they haven't done is managed to adjust in a rapid way to the current policy settings. As a result, they've chosen, it appears, to continue with their infrastructure and their corporate overheads rather than reduce those and increase the level of services to individuals. It's not that they're overly profitable.

Sabra Lane: Nick Loudon, thank you very much for joining AM this morning.

Nick Loudon: Thank you, Sabra.

Related content: Aged care has breached community trust

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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.