Submission to Department of Health Aged Care Legislated Review

Publication published 5 December 2016

Submission to Department of Health Aged Care Legislated Review

1. Has unmet demand for residential and home care places been reduced?

The findings of a 2012 study [1], which examined how applicants approved for what are now called Home Care Packages fared in obtaining one, suggest that the level of unmet demand is significant. The study found that out of 285 approvals for Home Care Packages only 35 Home Care Packages were provided. The majority of applicants, 250 or 88 per cent, were still waiting for their Home Care Package nine months to one year after receiving their approval.

This study also confirms what the Aged Care Financing Authority (ACFA) acknowledges in its 2015-2016 annual report – that no data are currently being collected to produce a reliable estimate of unmet need in the area of Home Care Packages. According to ACFA’s figures, waiting times following approval for a Home care Package has improved. In 2014-15, 58 per cent of people commenced Package Levels 1 and 2 within three months of being approved by an ACAT. For Package Levels 3 and 4, 62 per cent of people commenced a package less than three months after their ACAT approval.

ACFA notes that this indicator should be treated with caution as it is not an accurate indicator of waiting time for entry into care. Consumer choice not to enter care immediately can delay commencement of a package. The measure also does not include consumers who may have spent time waiting, but then decided not to take up a placement offer during the relevant period. While ACFA’s qualification of the waiting time indicator is valid, it does not consider a number of issues, such as under supply in regional and rural areas and the affordability of home care compared to residential care.

However, it remains unclear why the Department of Health has not yet implemented a data collection system that would enable it to estimate the demand for Home Care Packages in real time. Such a system is clearly integral to the effective monitoring and evaluation of the aged care sector.

One factor contributing to the lack of data collection in the home care space is the Department’s prioritisation of residential aged care. Between 2010 and 2015, the residential care and home care components of the Aged Care Operational Provision Ratio have barely shifted. In 2010, the home care component was just under a quarter of the overall ratio, in 2015 it was just over [2]. The Department of Health appears satisfied that the overall Aged Care Operational Provision Ratio produces sufficient supply to meet overall demand. However, evidence suggests that consumer preference is overwhelmingly in favour of home care over residential care [3].

While the Department of Health should put in place a system to record demand for Home Care Packages, such a system would not be able to collect true unmet demand unless the pricing distortion caused by the ‘basic daily fee’ is taken into account.

The ‘basic daily fee’ in home care is $9.97 (ie $139.58 per fortnight) for a person needing care every day. A full rate single pensioner receives $877.10 per fortnight and a couple on a full rate combined pension receives $1,322.40 per fortnight. Aged care is typically required at a point in people’s lives where their retirement savings are severely depleted or exhausted, so that their ability-to-pay the ‘basic daily fee’ is minimal to non-existent. For a pensioner, the cost of a Home Care Package itself constitutes a major barrier to accessing aged care services as this cost must be fully absorbed despite a fixed low income. By comparison, a full rate pensioner who goes into residential care as a supported resident pays 85 per cent of the single basic pension in fees, but this covers food and other essentials, so the resident has few additional outlays in this regard. This pricing distortion is likely to be an important reason why Home Care Packages may not be taken up as widely as would be consistent with people’s preferences to receive care at home.

The social security system further exacerbates the price distortion generated by the rate of ‘basic daily fee’ for pensioners who require a high level of care at home. When a member of a couple enters residential care, both members effectively receive a single pension. However, if a member of a couple receives a Home Care Package, the couple stays on a couple combined pension, which is $431.80 per fortnight less than two single pensions. This means that where a couple cannot afford the ‘basic daily fee’ for a Home Care Package, they have no choice but residential care, as they are being squeezed financially by both the aged care pricing system and the social security system.

The Australian Government spends significantly more on a person being cared for in a residential aged care facility compared with what it spends on a person being cared for at home. The average annual Government expenditure for an individual receiving residential care is $56,100, compared with $19,200 for Home Care Package recipient. Even the average expenditure on a ‘low-care’ resident is significantly higher at $25,900 a year [4].

While it is clear that with a rising proportion of Home Care Packages at Levels 3 and 4, the average cost of a Home Care Package to the Government will rise, there is nevertheless scope for a rebalancing of subsidies available for Home Care Packages to make them affordable for everyone who needs them.

Recommendation 1.1

That the Department of Health record consumer preference for either residential care or home care, regardless of availability, affordability or assessed level of need and use that information in determining the overall allocation of aged care places.

Recommendation 1.2

That aged care subsidies be reviewed to ensure that aged care consumers can make a choice between residential care and home care on the basis of preference.

2. Should the number and mix of places for residential care and home care continue to be controlled?

As a funder, the Government primarily subsidises the care component of both residential care and home care. The cost of that component is the same, whether a consumer opts for residential or for home care. On this count then, the Government would have no objection to ceasing control of the number and mix of places, but neither does it have an active interest to cease control. The Government’s position on this count is neutral. As a funder, the Government also subsidises the accommodation component of supported residents, approximately forty per cent of all residents. Here the Government’s interest is to promote consumers taking up home care rather than residential care places, because home care does not require an accommodation subsidy.

As a regulator of aged care, the Government has an interest in ensuring that the providers of residential care have the necessary certainty to invest in the building, upgrading and maintenance of residential care facilities, because even though consumers generally may have a preference for home care, there will always be a proportion of consumers who require residential care. There is no better way of providing investment certainty for residential care providers than by controlling the number of residential care places and by ensuring those places are occupied.

Given that expenditure on residential care subsidies far eclipses expenditure on home care subsidies and that consumers demonstrate a preference for home care, it makes sense to increase the proportion of Home Care Packages relative to residential care places. A greater proportion of home care places in the overall mix is sustainable if the ‘basic daily fee’ were to be reviewed to eliminate the pricing distortion experienced by full rate Age Pensioners. It is noted here that a reduction in the proportion of residential care places would lead to Government savings in the area of accommodation subsidies. These savings could be used to lower or eliminate the ‘basic daily fee’ of $9.97 payable by home care consumers. The accommodation subsidy for a supported resident in residential care is $54.39 a day paid for by the Government. Clearly, there is a significant opportunity to divert potential supported residents, who cannot afford to pay $9.97 a day, into home care, waiving their ‘basic daily fee’ and achieving a nett saving of $44.42 per day per supported resident.

Recommendation 2.1

That the number and mix of places for residential care and home care continue to be controlled.

Recommendation 2.2

That the proportion of home care places be increased so that consumer preference can be fully exercised.

Question 3

3. Could further steps be taken to change key aged care services from a supply driven model to a consumer demand driven model?

As demonstrated in section 2 of this submission, CPSA does not believe that, given the Government’s conflicted involvement in aged care, it is likely for the Government to abandon its supply driven model for a consumer demand driven model. Nor should the Government either.

Although the Australian Government has stated its support for a consumer demand-driven market for aged care services, shifting away from the current supply driven model constitutes a significant risk as the provisions necessary to ensure a well-functioning market are not in place. The idea behind market-based demand driven is that by giving consumers greater choice, service providers will be compelled to “serve the public interest by providing goods and services that are efficiently produced, of reasonable quality, and at prices close to costs” [5]. This requires a setting where (1) information is freely available; (2) suppliers are in a competitive market; and (3) the cost of changing supplier is low [6].

While it could be argued that there are an adequate number of providers for meaningful competition to occur and that the cost of changing provider need not be high, the assumption of freely available information does not hold up in the context of aged care. Many of those who require aged care services could be classified as vulnerable consumers due to age, disability, income, language and education, which in turn limits their capacity to access and digest the information necessary to make an informed choice [7]. Further, people tend to access aged care due to an acute need often stemming from an accident or emergency, which further limits their capacity to access and digest information to the very limited extent that the relevant information is available.

Exacerbating the issue of access to information is that Australia lacks a robust, meaningful and reliable aged care quality monitoring and compliance system to generate the information necessary to make an informed choice. This is compounded by the fact that most information that is gathered is ‘protected information’ under the Aged Care Act 1997, meaning it is further shielded by an almost blanket exemption from Freedom of Information applications.

Finally, aged care providers are overly defensive about the publication and dissemination of information or opinion, particularly where that information or opinion suggests that services may be of sub-optimal quality. Providers are known to threaten legal action and in some cases actually take it, and this does not just affect media outlets and advocacy organisations but also hapless consumers not satisfied with the service. This attitude on the part of providers prevents the operation of consumer blogs and websites along the lines of TripAdvisor and suppresses to a large extent information and opinion sharing between consumers.

Recommendation 3.1

That a robust, meaningful and reliable aged care quality monitoring and compliance system be developed and that the information this system generates be published following a review of Part 6.2 of the Aged Care Act 1997.

Section 4

4. The effectiveness of means testing arrangements for aged care services, including an assessment of the alignment of charges across residential care and home care services

CPSA reiterates the comments made under terms 1 and 2 in relation to price distortion between home care and residential care, which must be addressed in order to facilitate consumer preference. Further, there is a need to review the affordability of the basic daily fees payable by full rate Age Pensioners for both home care and residential care.

All Home Care Package Recipients are required to pay a basic daily fee of $9.97. This constitutes a huge expense for a person whose only source of income is the Age Pension. Full rate Age Pensioners experience significant financial hardship, with many classified as living in poverty [8]. It is both unrealistic and unfair to expect an Age Pensioner to be able to manage the costs associated with taking up a home care package. The rate of Age Pension is intended to cover the basic cost of living and the majority of pensioners spend all of their money on living expenses such as food, rent (or rates for home owners), utilities, transport and health care. Age Pensioners who find themselves in need of care must either try to curb their spending on these basic living expenses, make do without support, or consider moving into residential care, where affordability issues persist.

Recommendation 4.1

That the Department of Health review the affordability of the basic daily fee of $9.97 payable by Home Care Package recipients for full-rate Age Pensioners.

Comments

Those receiving care in residential aged care home are required to pay a basic daily fee of $48.44. Additional fees beyond this basic daily fee are subject to means testing, but supported residents are not required to pay a means-tested care fee or an accommodation fee as these costs are covered by the Australian Government. On top of these fees, residents are also required to cover the costs of pharmaceuticals, medical appointments, transport, clothing and shoes, social outings and personal services such as hairdressing. After paying the basic daily fee, supported residents whose only source of income is the Age Pension are left with less than $200 per fortnight to cover these expenses. Residents are expected to cover both the cost of medical appointments as well as the cost of transport to and from these appointments and given the high prevalence of chronic disease among residents, these costs can be significant.

CPSA has heard from a number of supported residents who are experiencing significant financial stress due to these expenses related to medical appointments and transport. CPSA was very concerned to hear from a supported resident who was forced to stop seeing one of their three specialists as they could not afford the cost of community transport to and from these appointments, was not able to use public transport and did not have a loved one available to drive them to and from appointments. Older Australians must be able to access the care that they need regardless of their capacity to pay for it. The current arrangements do not permit this and accordingly, must be reviewed.

Recommendation 4.2:

That the Department of Health review the affordability of the basic daily fee of $48.44 payable by residential aged care recipients for full-rate Age Pensioners.

Recommendation 4.3

That the Department of Health reviews its policy of not funding transport for supported residents for the purposes of transporting people living in residential care to and from medical appointment.

5. The effectiveness of arrangements for regulating prices for aged care accommodation

In the lead-up to the 2014 pricing reform, the Productivity Commission proposed that means testing to determine the rate of contribution to aged care costs should include the family home [9]. While that proposal was not adopted, the pricing of aged care accommodation effectively assumes the family home is available to fund residential care accommodation, as evidenced by a significant increase in the average amount paid to residential care providers in refundable accommodation deposits (RADs). According to the figures reported in the 2016 Report on the Funding and Financing of the Aged Care Sector [10], the average price of RADs increased at a rate of around 6% a year. In 2013-14 the average RAD was paid at $270,000 across for-profit, not-for-profit and government run residential aged care facilities. Following the pricing reforms in 2014, the average RAD increased to $365,300 – a 26% increase on the previous year.

The experiences of CPSA’s constituents suggest it can be quite hard for a couple of which one member needs to go into residential care to find a supported residency place and pressure is effectively applied on the couple to sell the family home to fund a RAD, daily accommodation payment (DAP) or combination of both. This issue is discussed further under Term 6.
It appears residential aged care providers take a largely laissez-fair approach to the pricing of accommodation, with providers free to charge what they think the market will bear up to a RAD cap of $550,000 and DAP equivalent, with permission needed if providers want to charge more. The criteria used generally in deciding whether or not to grant this permission are not published.

However, figures released in late 2015 by the Department of Social Services under a freedom of information request indicates that 448 residential aged care providers have been approved to charge RADs in excess of $550,000, with 70 providers approved to charge RADs in excess of $1 million and a further four providers approved to charge RADs over $2 million [11]. Accordingly, it does not seem that there is any rigorous or meaningful regulation of pricing for aged care accommodation.

However, the more important point to make about the price regulation for aged care accommodation is that it effectively operates as a system of cross-subsidisation, where those paying for their accommodation through a RAD, DAP, or combination of the two, subsidise the accommodation of supported residents. The Australian Government, which pays an accommodation subsidy for supported residents, has set this accommodation subsidy at a level at which it expects to get a cheaper price in exchange for giving the industry almost free reign in the area of RADs and DAPs. The fact that record low interest rates have made the accommodation supplement currently higher than DAPs in many cases is beside the point: it simply was not envisaged that interest rates, including the Maximum Permissible Interest Rate (MPIR) in the conversion of RADs into DAPs, would drop as low as they have.

There is no comparison between the level of specificity of the pricing regulation that applies to Government subsidies for care and accommodation and the level of specificity of the pricing regulation that applies to RADs and DAPs, paid by residents. Where the Government makes the payment, extensive, very specific rules apply in an effort to control and minimise the amounts it pays, while for payments made by residents the rules leave plenty of room for providers to maximise the amounts they are paid.

Recommendation 5.1

That pricing for aged care accommodation be regulated to the same level of specificity as pricing for care.

Recommendation 5.2

That the Government’s accommodation subsidies be aligned with RADs and DAPs.

Recommendation 5.3

That the principles and criteria used in aged care accommodation pricing be published in the interest of transparency.

Comments

Attempts by some aged care providers to impose a daily charge on residents who have opted to pay for their accommodation through a RAD rather than a DAP demonstrate a weakness in the price regulation of residential care. While the Department of Health has given its view that this daily charge is illegal, some providers continue to publish an Asset Replacement Contribution as a requirement for those who opt for a RAD [12]. Price regulation on this point is therefore either inadequate or not enforced. This is of serious concern, given that RAD and DAP options for paying accommodation costs should operate at parity. Clearly that parity disappears if providers are levying a charge/contribution/fee based on the consumers chosen payment option.

The reason why certain aged care providers have attempted this is probably related to the fact that the current MPIR used in the calculation of the DAP can produce a DAP which is lower than the maximum accommodation supplement paid by the Government on behalf of supported residents. While it seems obvious that certain providers feel that they should at least achieve parity with the maximum accommodation supplement rather than with the DAP equivalent to the agreed price of a RAD, neither the Aged Care Act 1997 or related subordinate legislation stipulate this. Where this type of charge is being or has been levied, providers should be forced to make restitution to consumers.

CPSA notes that aged care providers are permitted to levy additional fees/charges for extra services where the consumer has agreed to pay these fees/charges. While in theory this does provide some protection to consumers, it relies on aged care providers informing consumers of their rights when this is clearly not in the best interest of the business. The experiences of CPSA’s members and constituents suggest that aged care providers are not always forthcoming about this clause. The vulnerability of those receiving residential aged care further exacerbates the imbalance of power between consumers and providers, as consumers may be faced with the choice of either paying an additional fee/charge or having their care agreement terminated. It is critical that consumers are aware of their rights and options for seeking reprieve or restitution where these rights have been breached. This function must be performed by an independent body, such as the Australian Competition and Consumer Commission (ACCC), which has extensive experience in the protection of consumer rights.

Recommendation 5.4

That the Department of Health reaffirm the illegality of additional daily charges based on the consumers’ chosen accommodation payment option and that restitution be made to residents who have been paying such charges.

Recommendation 5.5

That the Department of Health runs an aged care consumer rights information campaign about fees and charges that specifies the avenues for seeking restitution where a consumer has been misled by their aged care provider.

Recommendation 5.6

That aged care providers be required to provide consumers with information about their consumer rights and avenues for seeking restitution prior to commencing services.

Recommendation 5.7

That the Department of Health engage the Australian Competition and Consumer Commission (ACCC) to ensure that regulation of pricing in the aged care sector benefits consumers.

Section 6

6. The effectiveness of arrangements for protecting equity of access to aged care services for different population groups.

By allowing residential aged care providers to charge all residents a RAD and/or DAP, the Government has inadvertently created an incentive for providers to maximise revenue from RADs and DAPs, despite the financial penalty for not reaching the 40 per cent threshold for supported residents. Residential aged care providers that fail to accommodate at least 40 per cent supported residents face the financial penalty of a 25 per cent reduction in the rate of accommodation supplement paid by the Government to cover the accommodation costs of these supported residents. The incentive to disregard the supported resident threshold is further entrenched through the capacity of providers to set accommodation prices according to what the market will bear. The financial penalty for not meeting the 40 per cent requirement varies in effectiveness depending on the Maximum Permissible Interest Rate used to convert advertised RADs to DAPs.

A simple example illustrates the operation of the financial penalty described above. A home with a 100 per cent occupancy rate, with 100 beds and 40 supported residents receives $794,094 [13] in accommodation subsidies for its supported residents at the current MPIR of 5.76 per cent. The home requires a RAD of $450,000 for a place, which equates to a DAP of $71.01, generating annual revenue of $1,555,119. The home’s total annual accommodation revenue is $2,349,213. If the home goes under the 40 per cent requirement, it must go to a supported residents’ rate of 22 per cent to exceed the total revenue it achieves with a 40 per cent rate. The current MPIR is very low. A long term average MPIR is likely to be 8 per cent. The example home would need to a supported residents’ rate of 30 per cent to exceed the total revenue it can achieve at 40 per cent.

However, with resident turnover in residential care relatively high, a home is likely to set its target supported residents’ rate in the medium term, i.e. according to what it thinks interest rates will do over the next two or three years. This means that MPIRs of 10 or 12 per cent are possibilities, at which point the home only needs to go under the 40 per cent supported residents’ rate to 33 percent and 35 per cent respectively to exceed revenue associated with sticking to the 40 per cent rate.

So clearly, the ability of those in the community who need to enter residential aged care as supported residents to do so varies with the prevailing interest rates at the time at which they are looking for a place. In the current environment supported residents may be very welcome, because the maximum accommodation supplement equates to a RAD of just under $345,000, but the intensity of their welcome will quickly dissipate once the MPIR starts to move up again.

While there are also mandatory regional rates for supported residents’ occupancy, these do not realistically limit a home’s actions in targeting a supported residents’ rate lower than 40 per cent. ACFA’s annual report publishes supported residents’ rates by provider type which are well in excess of 40 per cent. However, this is likely to be too coarse an aggregation, which does not even reflect how the supply of these supported resident places is distributed at, at least, the levels of the regions which the Department of Health uses in its planning and administrative work.

The supply of supported resident places needs to be stable and vary only with changes in the planning ratios used by the Department of Health. Currently, supply will vary with general economic conditions. When conditions are good and investment returns healthy, homes have an incentive to preference RAD or DAP paying residents over supported residents.
While the regional ratios for supported residents are published (albeit buried deeply in the Department of Health website and not on MyAgedCare), it is not possible to access information regarding which homes have vacancies for supported residents at any given time. This makes the search for a residential aged care place an incredibly time-consuming and needlessly complicated process for prospective supported residents, who must call each facility individually to enquire about the availability of supported places.

Recommendation 6.1

That the accommodation supplement for supported residents be subject to homes meeting a mandatory and periodically fixed ratio for supported residents. This ratio should be based on information used to develop the overall planning ratio: in practice, the current regional ratios plus a buffer to ensure prospective supported residents have a degree of choice.

Recommendation 6.2

That MyAgedCare include real-time information about vacancies for supported residents in each accredited residential aged care facility.

Section 7

7. The effectiveness of workforce strategies in aged care services, including strategies for the education, recruitment, retention and funding of aged care workers.

The original Living Longer, Living Better aged care reform package included provisions to ensure aged care workers received significant wage increases as this was identified by the Productivity Commission as a major factor limiting the supply of workers to the sector. Under the initial proposal, aged care providers would have received a significant increase in the basic daily subsidy paid by the Australian Government if they could prove they had delivered pay increases to workers above the rate of inflation [14]. Following the change of Government in 2013, this measure was reworked on the basis that working conditions and wages should already be covered by award legislation and workplace enterprise agreements. By increasing the basic subsidy paid to all eligible aged care providers, regardless of staff wages or working conditions, the costs of administering the $1.5 billion funding were reduced. However, by increasing subsidies across the board the Australian Government also relinquished their capacity to ensure that aged care providers channelled these additional funds into wages and working conditions. By cutting the ‘red tape’ around this funding increase for aged care providers, the Australian Government undermined the original objective of the measure, which was to improve wages and working conditions in the aged care sector to ensure a sufficient supply of workers to meet the needs of an ageing population. Accordingly, concerns about the future of the aged care workforce have become even more urgent, while the window of opportunity to address these issues shrinks. The submissions to the current Senate Community Affairs References Committee inquiry into ‘The Future of Australia’s Aged Care Workforce’, particularly those from workers themselves, illustrate the severity of the issues at hand.

A major issue affecting the aged care workforce is the failure of the Australian Government to develop and implement an overarching aged care workforce strategy. The Australian Government has publically stated that such a strategy must be developed and led by the sector. CPSA argues that Government stewardship in the area of the aged care workforce is required in order to ensure that the short to medium term financial pressures faced by aged care providers do not undermine the longer term sustainability of the sector as a whole. Given that staff working conditions are intimately linked to the quality of care they are able to deliver to care recipients [15], an overarching workforce strategy, led by the Australian Government is critical to ensuring that all older Australians are able to access high quality aged care services.

Recommendation 7.1

That the Australian Government take responsibility for developing an Aged Care Workforce Strategy, that recognises the Government’s central role in the operation of the aged care sector.

Comments

Staffing is by far the greatest cost for aged care providers and accordingly providers opt to maintain a flexible workforce so that staff can be hired and fired according to market conditions. A growing trend has been the use of temporary agency staff to cover shifts on a one-off or short term basis. A recent study has highlighted that while this is an effective strategy for managing labour shortages and particularly skill shortages in the short term, it has a detrimental effect on job satisfaction among personal care attendants (PCAs), which in turn increases the likelihood of them leaving the aged care sector [16]. This illustrates the point that workforce strategies which address issues such as staff and skill shortages in the short run may actually have a negative effect over the long run and thus Government oversight is necessary.
Another strategy used by aged care providers to manage staffing costs is to adjust the skill mix so that PCAs make up a greater proportion of the workforce relative to Enrolled Nurses (ENs), Registered Nurses (RNs) and Allied Health Professionals, such as physiotherapists, occupational therapists and dieticians. This practice is widespread, with the deskilling of the aged care workforce evident in the results of the Aged Care Workforce Census and Survey. When the survey was first run in 2003, RNs comprised 21% of the residential direct care workforce, ENs 13%, PCAs 58.5% and Allied Health Professionals 7.4%. In 2012 RNs comprised just 14.9% of the residential direct care workforce, ENs 11.5% and Allied Health Professionals 5.2%, while PCAs comprised 68.2% of the workforce. The results of the 2016 Aged Care Workforce Census and Survey are set to be released in 2017 and will provide critical data around the deskilling of the aged care workforce.

While the majority of PCAs do hold a tertiary-level qualification17, their job is to provide basic personal care and support. RNs as well as Enrolled Nurses (ENs) practicing within the scope of their training are charged with providing specialised clinical and medical care to aged care recipients. CPSA has serious concerns regarding the impact of the deskilling of the aged care workforce on the quality of care being delivered to consumers, particularly those receiving residential aged care services. The Australian Government’s ageing in place policy has meant that those who enter residential aged care have increasingly complex and acute care needs, with around 50% of residents holding a dementia diagnosis. It is critical that residential aged care facilities not only employ a sufficient number of workers to care for residents, but that there is a sufficient mix of staff with the qualifications necessary to deliver this care. However, aged care providers are not subject to having to meet minimum staffing ratios and accordingly have no incentive to ensure that staffing levels are adequate. In practice, this means workers in the aged care sector are under increasing pressure to deliver a higher level of care to sicker and sicker residents despite dwindling resources and reduced supervision from RNs. The pressure placed on individual aged care workers to deliver high quality care in a workplace where management has essentially made it is impossible to do so is among the reasons workers leave the sector.

CPSA’s experience is that the majority of our constituents are shocked to learn that there are no mandatory staff to resident ratios in aged care. A general lack of staffing ratios is compounded by the fact that aged care providers have no obligation to publish or inform prospective consumers of the staff ratios they adhere to. This means it is impossible to consumers to access the information about staffing practices necessary to make an informed decision about their care, which in turn undermines the objectives of consumer-directed care. Both the community and aged care workers themselves have been clear that mandatory staffing ratios must be introduced. The introduction of such ratios would force many aged care providers to re-evaluate their business models to ensure that care was being delivered in accordance with ratios. However, this should not be viewed as a bad thing.

Recommendation 7.2

That the Quality of Care Principles 2014 be amended to include mandatory staff to resident ratios.

Recommendation 7.3

That aged care providers be required to publish the staff to resident ratios they operate under through MyAgedCare so that it is accessible by the public.

8. The effectiveness of arrangements for protecting refundable deposits and accommodation bonds

CPSA does not have any specific comments to make under this term.

9. The effectiveness of arrangements for facilitating access to aged care services

Despite constituting one of the most substantial reforms to the aged care sector in Australian history, with a clear focus on improving the quality of aged care services available to consumers, there has been no meaningful attempt on behalf of the Australian Government to communicate these changes to those affected. This has facilitated ongoing and widespread confusion and misinformation among those trying to access aged care services, exacerbated by the fact that the vast majority of the information related to aged care in Australia is published on the MyAgedCare website. While internet usage across the Australian population sits at 83%, it is markedly lower among older people at just 46% for those over 65 [18].

It is critical that all older people requiring aged care services are able to access all relevant information in the format that best suits their needs. Failure to deliver information in multiple different formats to meet diverse needs constitutes a serious issue threatening to undermine the functioning of consumer directed care – if consumers are unable to access the relevant information, they are unable to make an informed decision about their care. If consumers are unable to effectively demand high quality care that meets their needs due to a lack of information, then aged care providers essentially have free reign to maximise profitability at the expense of quality care.

However, as explored under term 3, a lack of useful/meaningful information about the quality of aged care services offered by each provider continues to hamper the ability of consumers to make an informed decision about their care, thus undermining the operation of consumer directed care. Specifically, prospective consumers are unable to routinely obtain information about staffing levels at residential aged care facilities, despite the significance of this information to taking up services with a particular provider. This lack of information constitutes a barrier to accessing the aged care services that would best meet the consumers need.

Recommendation 9.1

That all information available on the MyAgedCare website be made available in phone and paper format, so that consumers who are not online have the capacity to make informed decisions.

Comments

The process for accessing aged care, from initial contact with MyAgedCare, to a needs assessment, to finally taking up a package or place is not transparent to consumers. This generates significant confusion and anxiety, compounded by the system’s complexity, unresponsiveness, impersonal nature and sky-rocketing costs. The consequences for consumers are severe and CPSA has heard numerous cases where a person has inadvertently rejected an aged care package/place as they believed they were already receiving one. The system is overly complex with too many different hoops for consumers to jump through in order to obtain much needed services. This is compounded by lack of transparency and widespread failure to inform consumers of the process for accessing aged care services upon first contact with MyAgedCare.

There is widespread frustration about the level of information being collected and the fact that the same information is often collected by multiple different parties throughout the assessment process. Many consumers, particularly those of culturally and linguistically diverse backgrounds and Aboriginal and Torres Strait Islander peoples, find the sorts of questions asked of them to be overly invasive, particularly given they are being asked over the phone or by a person they don’t know. Accordingly, many consumers have refused to answer these questions, only to have that refusal interpreted as a refusal to have their needs assessed entirely and thus they are removed from the waiting list. This is a particular issue for services delivered under the Commonwealth Home Support Program or equivalent as in some cases consumers can receive a fast-tracked referral for immediate services over the phone, with a formal needs assessment carried out after they have commenced services. CPSA has heard from consumers in this circumstance, who because they have been receiving services assumed that this request to undertake a formal needs assessment was a mistake or not something they needed to do.

For consumers, the process for accessing aged care services is totally unclear and not explained. While the processes may make sense from a bureaucratic and business perspective, there is an urgent need to make accessing aged care services a consumer friendly process. Consumers do not understand why the process is so lengthy or why so many different parties are involved.

Recommendation 9.2

That the Department of Health implements culturally sensitive and culturally appropriate processes for facilitating access to aged care services to Aboriginal and Torres Strait Islander people and those of culturally and linguistically diverse groups.

Recommendation 9.3

That the process for accessing subsidised aged care services is streamlined and made more transparent and consumer-focused.

References

  1. Griffiths, M. Russell, R. Brunker, G. Boccalatte, M. Goldstraw, P. (2014) ‘Waiting times for Aged Care Packages: The need to know’ Australasian Journal on Ageing, 33(1), pp26-28
  2. Table 1: Australian Government Department of Health ‘2014–15 Report on the Operation of the Aged Care Act 1997’ available: https://agedcare.health.gov.au/publications-and-articles/reports/report-on-the-operation-of-the-aged-care-act-1997
  3. For example: CPSA Members’ Aged Care Survey (2014): in response to the question ‘If you needed some kind of aged care, where would you prefer to receive care?’ 95% of respondents answered ‘At home’ and 5% of respondents answered ‘In a nursing home’.
  4. Australian Government Department of Health ‘2013–14 Report on the Operation of the Aged Care Act 1997’ available: https://agedcare.health.gov.au/publications-and-articles/reports/report-on-the-operation-of-the-aged-care-act-1997 Note: the comparison of the cost of HCPs with the costs of residential aged care has not been repeated in subsequent reports.
  5. Cleveland, G. (2008) ‘If it don’t make dollars, does that mean it don’t make sense? Commercial, nonprofit and municipal child care in the city of Toronto’ A Report to the Children’s Services Division, City of Toronto in Brennan, D. et.al. (2012) ‘The marketisation of care: Rationales and consequences in Nordic and Liberal care regimes’ Journal of European Social Policy, 22(4), 377-391
  6. pp378: Brennan, D. Cass, B. Himmelweit, S. Szebehely, M. (2012) ‘The marketisation of care: Rationales and consequences in Nordic and Liberal care regimes’ Journal of European Social Policy, 22(4), 377-391.
  7. Chester (2011) ‘The Participation of vulnerable Australians in markets for essential goods and services’ Journal of Australian Political Economy, 68(Summer), 169-193.
  8. OCED (2015) ‘Pensions at a Glance 2015’ Available: http://www.oecd.org/publications/oecd-pensions-at-a-glance-19991363.html
  9. Productivity Commission (2011) ‘Caring for Older Australians’ Available: http://www.pc.gov.au/inquiries/completed/aged-care/report
  10. pp160: Aged Care Funding Authority (2016) ‘2016 Report on the Funding and Financing of the Aged Care Industry’ Available: https://agedcare.health.gov.au/2016-report-on-the-funding-and-financing-of-the-aged-care-industry
  11. Department of Social Services: Freedom of Information Disclosure Log 2015 ‘Services with accommodation prices >$550,000 refundable deposit published on MyAgedCare at 30 June 2015’ Available: https://www.dss.gov.au/sites/default/files/documents/11_2015/document_1_-_services_with_accommodation_prices_over_550000.pdf
  12. Reference to specific websites available on request.
  13. $54.39 * 40 * 365 = $794,094
  14.  Explanatory Memorandum, Aged Care and Other Legislation Amendment Bill 2014.
  15. Please see CPSA’s submission to the Senate Community Affairs References Committee inquiry into ‘The Future of Australia’s Aged Care Workforce’ – Submission 295, available: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/Aged_Care_Workforce/Submissions
  16. King, D. Svensson, S. Wei, Z. (2016) ‘Not Always a Quick Fix: The Impact of Employing Temporary Agency Workers on Retention in the Australian Aged Care Workforce’. Journal of Industrial Relations, 0(0) available: http://jir.sagepub.com/content/early/2016/10/20/0022185616673867
  17. King et al (2013) ‘The Aged Care Workforce, 2012 – Final Report’. See Tables 3.12 and 5.12.
  18. ABS (2014), ‘Household Use of Information Technology, Australia, 2012-13’, catalogue number 8146.0, available at: http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/8146.0Chapter32012-13

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