Call for rethink as aged-care crisis looms

6 minute read

Critics are disputing the government's figures when it comes to aged-care costs


Scalabrini Village, a Sydney-based aged-care provider, is adding consulting rooms for visiting GPs in the style of a suburban doctor’s practice as a comfort for residents with cognitive impairment.

“We build the doctors’ rooms whenever we do a redevelopment, in the style of what the residents are used to – with out-of-date magazines and flu injection posters on the wall,” chief executive Chris Rigby told The Medical Republic 

“Going into a space that looks like a GP visiting room supports the emotional state of a person with dementia, rather than having a strange man in a shirt and tie come in and start prodding them with a stethoscope.”  

But the Catholic charity, which serves the Italian community and runs six aged-care facilities specialising in palliative care and dementia support, says its care standards face a devastating hit as a result of federal funding cuts of $1.2 billion revealed in the 3 May budget. 

The changes in the Complex Health Care component of the Aged Care Funding Instrument (ACFI) target patients with the highest medical and nursing needs. Within a few years, funding for those patients would fall by about $20 a day or $7000 a year, forcing cuts in skilled staff for people who needed the highest care, Mr Rigby said. 

“That is funding that now goes directly to the employment of registered nurses,” he said.   

“We won’t be able to afford the level of registered nursing cover we currently have, so we would not be able to admit residents with complex care needs, because we would always want to provide excellent care,” he said.  

In a sector where non-profit groups still account for 60% of residential aged-care places and about one-third of all providers operate at a loss, Scalabrini won’t be the only organisation to lose skilled workforce and capacity as a result of what advocates say is a ham-fisted crackdown by government on suspected gaming of the system. 

“They thought, it’s reasonably easy to get the evidence for high-care funding; people are optimising it and not spending it on salaries,” Mr Rigby said. “Well, that’s not necessarily so. We do optimise the funding, but we spend all of it on medical supplies, physiotherapy and nursing salaries.”

The sector is up in arms over the budget cuts, which come after the government projected a $3.8 billion blow-out in ACFI funding over four years amid allegations that one in eight assessment claims by providers was incorrect.  

“The economy can’t support a $3.8 billion funding blow-out.  We have to bring funding growth back to the budgeted trend over time,” Health Minister Sussan Ley said in a speech to the National Aged Care Alliance in late May.  

She said the government wanted to “look at separating assessment from providers and having it done by a third, independent and impartial party”.   

The sector disputes the predicted blow-out figure and is demanding the release of hard evidence to support it.  It also says the real impact of the changes will be a cut of $1.8 billion, or 11%, over the four years. 

Paul Sadler, CEO of Presbyterian Aged Care NSW & ACT and national president of the non-profit peak body, Aged and Community Services of Australia, says the government has bungled its calculations. 

“The government put into forward projections its estimates of growth in demand for people with higher needs in residential aged care and, not to put too fine a point on it, they got it wrong,” he told The Medical Republic.  “They basically underestimated the level to which aged-care operators are finding their residents have higher and higher care needs.” 

He acknowledged that some groups, including a handful of listed companies, had “done nicely” out of the ACFI tool and attracted higher funding. But he added: “It’s an exaggeration to say there’s a massive rort on the system.” 

The Australian Nurses and Midwives Federation is part of the push for long-term workforce planning, arguing the ranks of registered nurses, dietitians and other health professionals in aged care are already unacceptably low.   

 “You have one registered nurse and a couple of assistants-in-nursing for 100 to 150 patients in some places. You can imagine the exhaustion of those people at the end of the day,” the federation’s federal secretary, Lee Thomas, said.  

Staffing levels for high-care patients were the key concern for more than 90% of the nearly 2500 nurses and community members in a recent survey conducted by the federation, she said. 

“What we do know is that people entering residential care these days are older and more frail and have more chronic, complex health issues, and naturally that means more costs.” 

Dr Stephen Judd, the CEO of major provider HammondCare, agrees the ACFI tool needs to get rid of “perverse incentives” that reward providers for promoting dependency and not encouraging wellness.   

But he calls for a broader overhaul including primary care, with a rethink of the fee-for-service model, and suggests the Netherlands’ approach of specialised practice could be an option. 

“I think the priority should be the delivery of primary care in residential aged-care services, which is not being mentioned. It’s a century-old model,” he said.  

“When you have 50% of Australians over 65 with five or more long-term conditions, and the rate rises to 70% for those aged 85 and over, the population in residential aged care has an incredibly high prevalence of chronic disease, and yet the approach to primary care is inadequate.  

“I don’t think you can do that with a fee-for-service episodic base, because you are dealing with chronic ongoing conditions.” 

As well as rallying support among Senate crossbenchers to block the $1.2 billion funding cuts, the sector is urging the government to map out a timetable for long-term reforms to avoid a looming crisis in aged care. 

The 2 July election result, which returned the government with a thin majority, was an “encouraging” development, said Ian Yates, chief executive of the Council on the Ageing. 

“It means that they’re going to be sensitive to people’s concerns. More and more people are becoming concerned that there isn’t a long-term plan for the aged-care sector.” 

Reforms were needed to end the current “lottery” in which people assessed as eligible for an aged-care place could not get one because quotas were capped, while allowing more user-pays places on a means-tested basis, he said. 

“If you have got the whole sector telling you this is the way to go, and the Productivity Commission said it too, it requires someone to bite the bullet.  And then we would have a sustainable system.” 

A Council survey of 1000 older Australians conducted early in the election campaign found quality healthcare was their biggest concern.  But while 93% were happy with how Medicare was working for them in terms of GP access, they were unhappy with aged care.  

With about one-third of voters already aged over 60, the issue would become an increasingly volatile, Mr Yates said.

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