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Sector should start planning for reform review now


If stakeholders are hoping the upcoming review of the aged care reforms put forward priorities for future reform, particularly around freeing up supply of places, they’ll need to engage effectively, writes Dr Ian Holland.

This year, every stakeholder in aged care should prepare for a major review of the sector and its performance.

When the Living Longer Living Better reforms were legislated in 2013, they included a requirement that the minister order an independent review of the changes. Due to commence three years after the new laws took effect, the review will start soon after July 2016. By then, the last of the changes, which didn’t take effect until 2015, will have been ‘live’ for at least a year.

The review should take around 12 months. There are already extensive terms of reference, and the aged care minister can add to them. The review presents a major opportunity to focus on the future direction of aged care, but will not be without its issues along the way.

Ian Holland

Dr Ian Holland

The review faces plenty of challenges. The Act requires the minister to trigger the review, but it can’t be before July. How much attention can the minister and department give to preparing for a review, when the government has been put on an election footing? Further disruption or delay may come if there is a change of minister; more so if there is a change of government.

The reviewer will need to navigate a crowded field of stakeholders who all want to be heard. Relationships with the other established sources of advice to government will need to be built. These include the Minister’s Aged Care Sector Committee; the government’s independent advisory committee, the Aged Care Financing Authority; and the sector ‘peak of peaks’, the National Aged Care Alliance, which the government supports to engage in aged care policy discussions.

Once underway, the review will coincide with one of the biggest aged care reforms in a generation. In February 2017, home care packages will become portable, with consumers taking the driving seat not only in what care they receive, but in who provides it. This is a massive change.

It isn’t the only thing that will be changing as the review is conducted. In Victoria, HACC will be transitioning to CHSP from 1 July 2016. Western Australia, meanwhile, won’t have transitioned at all. The review will be dealing with different circumstances in different states.

The most important source of information for the review should be My Aged Care. Since its introduction in 2015, the website, together with its client record system and referral services, has been generating data on the population seeking and receiving aged care. This is hugely important information. However, My Aged Care got off to a troubled start, and the ACATs have only just begun using it for full assessment and referral.

It is not clear whether My Aged Care is going to be able to produce enough data, with sufficient quality, for the review to rely on it. It would also require government to have the resources to work on producing meaningful reports from the system. Given that the department is being stretched by all the demands on it – particularly implementation of the 2017 reforms – this may be a tough ask in times of public service austerity.

And in the background loom bigger changes affecting both the workforce and consumers of aged care. Most prominent is the rapid up-scaling of the NDIS, which is significantly altering the community services environment. But there are other changes happening, too. New business models are beginning to change aged care. Web-based services are connecting care workers with consumers, with no intermediaries, and this has the potential to transform the entire sector once packages are held by consumers from 2017. Some providers will already be changing their operations to respond to this kind of transformation.

While the review will have to navigate all of these complications, it also represents a significant opportunity. This review will be government resourced, public, and will require an official response. It is a great chance to set directions – so preparation will be important. The terms of reference have the potential to become a shopping list, which could result in a report that doesn’t give any sense of where priorities should lie. This isn’t likely to benefit anyone. It is in the interests of providers, investors and consumers alike to ensure the review is strategic and puts emphasis on some key issues. Their peak bodies need to work with their members to establish where priorities lie.

The review will be asking fundamental questions about the performance of Australia’s aged care policy, but also about the performance of providers. For example, the review will look at trends in unmet demand for residential and home care places. It has a brief to consider whether to undertake a fundamental transformation from supply-driven to consumer demand-driven aged care.

It is likely the review will analyse the increasingly intense competition in the ACAR rounds. When Senator Mitch Fifield was minister, he made clear that he wanted to get rid of ACAR. There is work to be done by the review – and by providers and government – on how the vigorous competition for ACAR places would translate into service offerings if supply were to be deregulated. Providers should be ready to outline the benefits and risks involved in replacing the ACAR mechanism.

The review is also required to look at prices and price regulation. With aged care being one of the big expenditures in the Commonwealth’s budget, we can expect close examination of how the legislative changes have influenced prices, and the Commonwealth will want to know whether it is getting value for money. Providers will need an understanding of how costs and prices are affecting their operations and must develop key economic messages they want to put to the review. They will be doing this knowing that government has no appetite for increasing its financial contribution to the sector.

The review has to consider the effectiveness of arrangements for protecting equity of access to aged care services for different population groups. This is crucial, but also an area where the challenge of gathering quality information will be great. The review will need to find data on what levels of access these groups have. It will also need to compare levels of access with levels of demand. Then it will need to look at whether the policies designed to support these groups are actually affecting outcomes. This is a big ask inside 12 months.

It will be important that providers, consumers, and niche service organisations pull together their evidence around equity of access. For providers this may be particularly important as the review could recommend changes to how access is financially supported.

At the end of the review, what will be the outcome? Will the review make recommendations for reform, or will it avoid them, opting instead to summarise evidence and perhaps list key issues? The government will want as much wiggle room as possible, so it may seek a report that is just descriptive. However, most stakeholders are likely to press hard for recommendations, particularly supporting the end of rationing of supply.

For stakeholders to engage effectively, they should start planning now. Priorities should be set, and evidence needs to be pulled together to address the key questions the review will ask. That evidence needs to be current, focusing on the way services are being provided now, and the way consumers want them delivered into the future. There were problems during the transition, which were real and frustrating, but they should not be a focus. Clear priorities, good evidence, and commitment to delivering an even better service system, together have the potential to ensure a constructive review.

Dr Ian Holland is principal at Hamilton Stone consulting. He has worked on aged care reform for UnitingCare Australia and the National Aged Care Alliance. During a decade working for the Senate he led the secretariat that supported parliamentary scrutiny of the 2013 aged care reform laws and the National Disability Insurance Scheme.

This opinion piece currently appears in the May-June edition of Australian Ageing Agenda magazine.

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