Above: Commissioner Robert Fitzgerald speaks at the Community Services and Health Industry Skills Council Conference (image: CS&HISC).
By Yasmin Noone
Aged care services could soon fall out of the reach of disadvantaged, vulnerable and marginalised older Australians, if sector wages increase significantly, a Productivity Commissioner (PC) has cautioned.
Commissioner on the PC’s Caring for Older Australians inquiry, Robert Fitzgerald, warned of the very real possibility that wage increases could have a negative impact on the affordability of aged care services, at the Community Services and Health Industry Skills Council (CS&HISC) national conference, Making a Difference...2011, last week.
He explained that in the PC’s proposed market-orientated system of the future, aged care wages would need to increase substantially to become "competitive" with wage levels in other, comparable industries, and effectively retain and attract staff to key positions within the sector.
Increased wages would force up the provider's operating cost and consequently, the price of care. Mr Fitzgerald said that although the federal government would pay two thirds of the consumer’s costs, the remaining one third borne by the provider would most likely be passed onto the older adult in need of services.
"Yes, costs could go up," assuming that ‘all things remain equal’, Mr Fitzgerald stated.
"It’s important to ensure that costs don’t go up so much that the people who need services…or are entitled to services, withdraw from the system."
The best mechanism to guarantee that wage increases do not have an adverse affect on care costs, Mr Fitzgerald stated, is additional government funding.
"The government could pick up more of the costs but it must maintain a level of costs that ensures that wages [don’t increase so much] that it pushes people out of the system."
However, he said, in the absence of government funding within a market-orientated sector, increased wages would result in a decrease in demand for aged care services.
“This demand [for residential aged care places] will then flow into other forms of care.
“Policy makers must therefore be aware of the long-term flow-on effects of resource allocation and the public policy implications of substantial wage increases."
The age of advocacy
According to Mr Fitzgerald, the Commonwealth’s adoption of the PC’s market-orientated recommendations could also lead to the development of a new area of service – aged care consumer advocacy.
Putting the consumer at the centre of all care and business decisions, obviously means providing the older person with the choice and power to decide what services they need and want to receive.
But, he said, some older, vulnerable consumers will be unable to make a decision about the type of care they want without additional help and support.
"It is true that for some, choice is an illusion so we must ensure that [all] consumers have choice, and [there are] supports for those who are vulnerable.”
The role of the aged care advocate or intermediary would therefore "grow in importance…as people are expected to make choices".
Reiterating the recommendations of the PC’s final inquiry report, Mr Fitzgerald stated that block funding should also be continued in remote, Indigenous, homeless and other services.
"Residential aged care facilities will look nothing like they do today.
"We need to fund the change and reform the system.
"…Systematic reform is important. The cogs that work the system must be realigned."