Oct 23, 2017

Could Changes to ACFI Make Aged Care Funding More Sustainable and Flexible?

A new report into aged care funding highlights a range of options to modify Australia’s residential care funding instrument.

Minister for Aged Care, Ken Wyatt AM, said the Review of the Aged Care Funding Instrument (ACFI) would inform the Turnbull Government’s continuing aged care reforms.

“We are determined to put residential care funding on a more consistent, sustainable and equitable footing,” says Minister Wyatt.

The Government currently contributes $18.6 billion per year to aged care and by 2020-21 this is expected to reach more than $22 billion.

“We are committed to a system centred on safe, quality care for our older Australians, while ensuring expenditure is affordable for consumers and sustainable for taxpayers.”

The report, prepared by Applied Aged Care Solutions, undertook a comprehensive review of ACFI, focusing on ways to improve the current tool, including adapting it for external assessments of funding needs and updating it to bring it into line with current care practices.

“We welcome the new report on residential aged care funding reform, which adds to the options provided in a recent University of Wollongong report,” Minister Wyatt said.

The Government-commissioned study was released in April this year, outlining a variety of potential new funding models and tools for the aged care sector.

Minister Wyatt said no decisions had been made, with the next step in the long-term reform process a Resource Utilisation and Classification Study, now underway at the University of Wollongong’s Australian Health Services Research Institute.

This study is investigating the drivers of residential care costs, according to location and the varying needs of individuals in care.

“We will continue to monitor use of the existing Aged Care Funding Instrument to ensure expenditure remains under control, while maintaining quality care,” says Minister Wyatt.

“We are equally committed to continue working with the community and the aged care sector to get these reforms right.”

However, the Aged & Community Services Australia says the Review of the Aged Care Funding Instrument (ACFI) highlights the need for sustainable, flexible funding to support the aged care needs of Australia’s rapidly ageing population into the future.

While ACSA are evaluating the details of the report’s recommendations, and their practical application for aged care providers, they recognise the importance of the funding review in assessing the sustainability of the sector into the future and hope this report on residential aged care funding reform will contribute to an informed assessment of the funding needs of providers.

“Government, and the community as a whole, needs to be asking tough questions about how we get the aged care sector on a more sustainable footing to ensure providers are equipped to deliver the care older Australians expect into the future,” said ACSA CEO Pat Sparrow.

“With a rapidly ageing population, that conversation is vital and urgent.”

As the peak body for not-for-profit aged care providers, Sparrow says that providers want funding that is underpinned by a strong set of principles that reflect the importance of equitable access to high quality care for all older Australians requiring residential aged care.

“Ultimately, the contents of this report should help to inform funding decisions that build an inclusive, sustainable model of aged care service delivery and funding that can adapt to the changing needs of Australia’s rapidly ageing population.

“Reports like the review of the Aged Care Funding Instrument represent a valuable opportunity for government, the community and the industry to pause, reflect and get this vital issue of funding right.”

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