Aged Care has Breached Community Trust

A wakeup call for the industry

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 woos.  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 have failed to adapt.

The numerous, varied and often exorbitant HCP fees structures that currently exist have not been the mandate of government policy, they been initiated by provider organisation. 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.

Why the huge disparity?

The industry has been required to offer all HPC’s on a CDC basis since July 1st 2015, having been given notice of the change well before hand 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 Australian, 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; they 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 cost providers more to manage than it delivers for service provision – 41% of RAC provider organisation 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, almost to a man, 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.

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, 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 is perfect, we all get it wrong from time to time; we’re human and the community don’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 have 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.

Originally published on Linkedin

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  1. Nick welcome to the discussion and thank you for finally admitting that the industry is not giving our community the sort of service it expects and needs. But you misunderstand the problem by using dated 20th century thinking. Staff and family as well as those who study the social dynamics of how markets work in vulnerable sectors have been telling industry and politicians for years that the sort of market system that we have in aged care is not working and cannot work.

    It is quite clear from the unhappiness from staff and families and from the unacceptable levels of staffing recently revealed that the problem is far worse and more widespread than you are prepared to admit. International data comparing staffing and failures indicates that if we actually measured and reported failures in care transparently they would reveal the true situation is anything but world class.

    While we understand why families get so angry it is not your motivation, your commitment or your dedication to the 20th century free market system as a solution that is in question, but that system itself. Aged care is not the only vulnerable sector where this has failed badly and the problem is global. Wise men of the past have pointed out that it is always good men who do the most harm in the world and the market is one place where this happens. Those involved simply do not see what is happening

    Quite separate to the issue of care is the unrealistic way in which industry and government markets itself and advertises care and a quality of life that they cannot deliver. These are frail people who are slowly and probably sooner than later going to die and their experience will be nothing like they and their families have been promised.

    It is the community, each local community, that is ultimately responsible for its vulnerable members when they are in need, not government and not providers. Whoever is providing care is doing it as an agent for and is directly responsible to each community it serves.

    These communities have been excluded from policy development and from the management of the system. Instead policy and services have been marketed at them like lollies, a commodity sold by salesmen selling snake oil, and as soon as the sugar dissolves this lolly is bitter. It becomes difficult to live in fairyland.

    If the industry is serious about fixing this then it has to be totally honest and totally transparent with local communities about staffing and failures, as well as realistic about life. It can then work with them to improve the service and fix problems to give the best life possible and so regain trust.

    Aged Care Crisis is pressing for an empowered visitors scheme located in each local community, supported by, working with and reporting to local community groups and professionals. These groups would then work with local management and help them to address problems as they occur. This is what you must do to regain trust. A trusting community would be likely to support industry when it needs more money. Remember that when the industry last had plenty of money it went shopping while the numbers of trained nursing staff continued to decline.

    Aged Care Crisis have been urging a move to a 21st century community based model for over 8 years. Industry and government have been wedded to their outdated ideas about markets and done everything they possibly can to ignore this obvious way forward and not talk about it. Aged Care Crisis would love to discuss this with you and be a part of the solution rather than a critic. This discussion should also be open and public – on web sites like Hellocare and Aged Care Crisis. We hope you will respond.

  2. Nick I find it interesting and disappointing that you are not prepared to engage in a discussion of these issues and look at the arguments. You have had 2 weeks to think about it!


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