Apr 08, 2021

Opinion: Yet another fee layer makes aged care more complex

Old lady counting money

Mum doesn’t drink – and surely the care home has to provide shampoo. These are two common responses to the increasing number of fee-incurring additional services that are being added into residential aged care agreements.

Even if she did drink and washed her hair in expensive shampoo every day, at $25 a day for these items and others, she could buy a lot of good wine and beauty products. Instead, she is being asked to pay an additional fee for a package of services she is very unlikely to use – and if she did, she’d rather buy her own.

Charging for additional services is another way care providers are boosting their bottom lines. However, it is not unusual to see items you might expect to be included in the $550,000-plus room price – such as a flat-screen TV or social activities.

Fees for bundled services ranged from $5 to $65 a day and cost an average of $25.65 a day. Fees at the lower end were targeted towards supported residents, the survey found.

Telephone, in-room TV, menu choice, hairdressing, Wi-Fi, alcohol with meals, events and outings, Foxtel TV, garment labelling and premium toiletries are the top additional services included in the bundle.

Residential care is never a one-size-fits-all, yet the additional service or “lifestyle packages” (as they are becoming known) are marketed as though everyone will use the services.

Access to a desktop computer or iPad and free Wi-Fi is important to some residents, but not everyone.

Beware bundles

While residents have to agree to the additional service fee, increasingly the services are bundled in a way that residents do not get to select particular preferences. The bundle includes essential services – such as TV and telephone. Most people would not regard these as optional or beyond reasonable expectations of their new home.

If you have found the care home you like and it comes with this additional charge, then you may have no choice but to add it to the actual care fees or find another place that doesn’t have the mandatory extra cost – or is charging differently.

Extra services are described as hotel-type services, such as better-than-average accommodation with nicer furnishings, and food and services, but not extra care. Provision of extra services is regulated and can only be charged by facilities with extra service status.

Providers with extra service status are required to publish the fees on MyAgedCare and their own websites.

However, additional services are different.

Late disclosure

Additional service fees are often not disclosed until a potential resident or their family are taking a tour.

For Roslyn Montgomery (not her real name), the dilemma was whether to accept a room for her mother, whose recent stroke left her bed bound and requiring help with everything from bathing to feeding, and pay an additional service fee of $40 a day.

Of the long list of food, leisure and lifestyle services being marketed to her as if she were 20 years younger and in her previous life, the only obvious pleasure for her mother to look forward to was the promise of regular live entertainment.

“If she did take up drinking, at that cost we could buy a lot of very good whisky for her to enjoy,” says Roslyn.

“The facility itself had a good reputation, had a good feel and there was a sunny, bright room with an outlook she could enjoy, but there was a bitter taste knowing they were basically making money out of her but providing no more care,” she says.

It is not supposed to be like that.

According to the Department of Health, providers should only charge fees for additional services that provide a direct benefit to the resident or where the resident can take up or make use of the service.

If services are bundled and become a condition of entry, this is almost impossible to achieve.

There are circumstances where an additional service fee can’t be charged – such as when a person’s care needs are so high that they can’t use any of the services – but it is difficult to see how this is being policed.

The Aged Care Act has a list of hotel services to be provided to all care recipients who need them, including: the maintenance of buildings and grounds; furnishings, including bedside lockers and chairs with arms; bedding, including linen and blankets; laundering of clothing that can be machine-washed; toiletry goods, including toothpaste and brushes and mouthwashes, moisturiser, shampoo, razors and deodorant; meals of adequate variety, quality and quantity; programs to encourage recipients to take part in social activities that promote and protect their dignity; and emergency assistance.

Like any hotel, the quality of the goods and services provided can vary greatly along with the price.

A few years ago, the for-profit providers were the ones more likely to offer the bundled packages than the not-for-profits, but there is plenty of evidence to suggest both types of care homes are making it a condition of admission for new residents.

Clearer rules may yet come as a result of the royal commission, but until they do, many individuals and families weighing up the benefits of paying more for things that have nothing to do with care face an added emotional and financial dilemma.


First published on The Australian Financial Review. Republished with permission. 

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