The lessons from the Whitehorse and Ballarat CHSP pull-outs

Late last month, the federal Government put out a media release which said it had “launched a $2.2 million pilot program to provide more than 150,000 nutritious meals each year to older people in Whitehorse and Ballarat, Victoria, through the Meals on Wheels model”.

Here are a few observations (lessons perhaps) based on that announcement.

Whitehorse and Ballarat are local government areas in Victoria which operated as CHSP providers in their areas of operations. Both Whitehorse and Ballarat have announced they will cease operations after 30 June 2023, joining Bendigo, which will stop its CHSP operations a year later.

While Ballarat’s announcement of its decision is quite circumspect and careful not to say anything that’s critical of the federal Government, Whitehorse is a little bit more outspoken. It said this:

“Council understands that under this new model, clients will be assessed for a level of care based on individual need, after which they will be able to choose where to spend their allocated resources, and whether to spend their resources with one or several providers. Providers, such as the Whitehorse City Council, will be funded once the services have been delivered, rather than receiving block funding in advance.

“Receiving Commonwealth funding once the services have already been delivered impacts Council’s ability to sustainably budget and plan services. It exposes Council to significant financial risk in recruiting, training and maintaining a high-quality workforce, without certainty of revenue. Costs to transition to the new operational and funding model will not be covered by the Commonwealth Government.

“The details of these changes are still uncertain and have not been fully determined.”

Of course, the fact that both councils decided to jump a year ahead of the introduction of the new In-Home Support Program also speaks volumes.

In the case of Whitehorse and Ballarat, jumping early has effectively forced the federal Government to manage the transition from CHSP to In-Home Support program, hence the apparent good-news announcement of the $2.2 million pilot program handing over responsibility for meal services to Meals on Wheels.

The federal Government’s announcement is silent on what will happen with other services delivered by Whitehorse and Ballarat under the CHSP, but Whitehorse commented:

“Over the coming months, Council will be working through the transition process with the Commonwealth Department of Health and Aged Care and the Victorian Department of Health, Victorian Department of Families, Fairness and Housing, and other service providers.”

Now to the observations-slash-lessons based on the federal Government’s announcement.

First, providers stating clearly what they can and can’t do under activity-based funding will most likely get more attention from the Department of Health and Ageing than providers who merely fret and wring hands. Whitehorse and Ballarat said they will pull out: you can’t be clearer about what you can and can’t do.

Second, at the same time, the larger the provider, the more likely they are to get attention. Whitehorse and Ballarat are big CHSP providers, who are vacating the field. The federal Government cannot afford for big service gaps to open up.

Third, if you are a small provider who is unable to transition from block-funding to activity-based funding, the solution is likely to be that you are swallowed up by a larger provider if one is around. Consolidation of service providers and economies of scale are big things for the Department of Health and Aged Care.

Fourth, the federal Government will step in with actual assistance and a plan if there’s a problem. The Government’s media release calls the Whitehorse and Ballarat program a ‘pilot’ program. This means that if it works out, the approach will be repeated elsewhere. This may be better news for care recipients than smaller care providers, but aged care services are about care recipients after all.

Fifth, handing the Whitehorse and Ballarat meal services contract to Meals on Wheels appears to be a block-funded, non-competitive tendering arrangement. If it was anything other than that, the Government’s media release would have mentioned it.

And that’s good news for CHSP care recipients and providers alike.