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Rhetoric vs reality on consumer direction


Constructing older people as ‘empowered consumers’ risks overlooking the disparity of resources, knowledge and support networks available to help them navigate an increasingly complex care market, writes Dr Beatriz Cardona.

The new funding arrangements for home care packages to start in February 2017, which allocate subsidies to consumers rather than providers, together with the introduction of consumer directed care and income-tested care fees signal a new market-based, consumer-driven community aged care system.

According to the Department of Health, the changes in home care from next year will increase competition, “leading to enhanced quality and innovation in service delivery, and reduced regulation and red tape for providers.”

Directing funding to consumers is expected to create a more responsive and efficient system that will drive up the quality of service provision. Older people will be able to shop around for the best provider to meet their particular needs and change providers if they are not satisfied with the service being delivered.

Dr Beatriz Cardona

Dr Beatriz Cardona

International experiences with similar models, however, call for some caution regarding the value of more competition. In his analysis of the healthcare system in the US, Professor Michael Porter from Harvard University has pointed out that more competition does not necessarily lead to better outcomes for consumers.

This paradox is explained in relation to the competition to reduce costs, to capture clients and restrict choice rather than in delivering value for consumers. It is often argued that healthcare is different to traditional markets because it is complex; consumers have limited information and because services are highly customised. 

Capacity to choose is not equal

The 2015 KPMG evaluation of the home care packages program delivered under the new consumer directed care model concluded that consumer information was key to supporting consumers’ understanding and decision-making with regard to purchasing decisions. This includes information on providers, location, price and any information to support an understanding of the quality and effectiveness of providers’ business and service models. The underlying assumption is that well informed consumers will be able to make choices that meet their needs and drive quality in a competitive market.

But is this confidence in the ability of consumers to drive quality well founded? Are we seeing a shift in power relations from the provider to the consumer? This apparent power given to older people needs to be critically examined.

There is an extensive body of literature in the last 30 years from leading gerontologists exploring the reconfiguration of older people as consumers within a framework of positive ageing cultures. Central to this analysis is the manner in which the dominant definition of positive ageing revolves around the virtues of independence, disposable income, self-care and responsibility. Alongside this is economic reform and a shift from a social and political commitment to care for the elderly to privatised and individualised solutions through personal financial management and consumer choice.

The inherent assumption in an open market where older consumers negotiate their care needs is that older people are autonomous and self-motivated agents with equal capacity to make choices in their lives. This fails to recognise the profound inequalities of gender, ethnicity and socio-economic class that persist throughout old age and more specifically the vulnerabilities of frail and disabled older people who are the main users of home care programs.

Basic market theory tells us that success of markets depends on a balance of competing forces. In successful markets the customer is served and his/her needs met. The customer has the power to determine whether the product or service offered is wanted. The success of the market depends on an informed and effective customer. This is currently not the case in aged care.

The ability of frail older people to make informed choices regarding the best provider and services to meet their needs is in many instances limited. Supported decision-making and assisted decision-making, as argued by the Australian Human Rights Commission, is important for older people who have cognitive impairment or require some form of assistance, for example with collecting information or talking through options.

The idea of supported or assisted decision-making does not only relate to cognitive disability but also to protection of vulnerable people. For example, a physically frail older person may be subject to age stereotyping and/or intimidation and abuse even if they have capacity. A study on consumer vulnerability in financial services in the UK by the Financial Conduct Authority in 2015 highlights that consumers in vulnerable circumstances may be significantly less able to represent their own interests, and more likely to suffer harm than the average consumer.

The home care packages reform and CDC models are informed by positive ageing cultures which shift ageing policy from representations of older people as frail and vulnerable towards independent, engaged and active citizens making choices and negotiating their care. While laudable in theory, this shift serves health economic policy agendas seeking a move from dependence on government towards personal responsibility, alongside a move away from universalism and the welfare state towards provision through the market.

Constructing aged care service users as ‘empowered consumers’ risks overlooking the diversity and disparity of resources, knowledge and support networks available to help them navigate an increasingly complex care market. The evidence so far raises serious questions about the ability of older people to drive quality.

The evaluation of consumer directed care by KPMG in 2012 noted that in selecting participants for the pilot of CDC, service providers considered carer support, level of need, health and cognitive status, educational and professional background as key indicators of suitability for self-managed packages. Among this selected group of participants, there was a preference for providers to retain a significant degree of responsibility for support coordination (particularly where the majority of services were provided by the organisation rather than brokered). The evaluation also showed that most consumers declined the option of self-management of funds preferring greater participation in decision-making regarding service type and delivery options.

For many participants, the decision to use the provider’s in-house services was based on price, as the cost of brokered services was often higher. This was particularly so in areas where there was limited choice and if the CDC provider charged an additional fee for arranging the brokered services.

A more recent evaluation by KPMG conducted in 2015 found that consumers were not making significant changes to their support arrangements when they transitioned to CDC, and new consumers were not accessing substantially different services. The report also highlighted the impact of demographic variables on access and quality of services. Consumers from culturally and linguistically diverse backgrounds (CALD), Indigenous people, and older people from poor socio-economic backgrounds and regional and remote areas faced higher costs, limited choice and culturally inappropriate services, among other barriers.

Driving quality improvement

The proposition that consumers will drive quality and be empowered to make choices that best meet their needs is questionable, at least for the vast majority of users of home care packages who are frail, with few care support networks, limited disposable income to subsidise care, and limited skills and experience in navigating complex age care markets and negotiating services.

This also raises the question: if the quality of community aged care cannot be made the responsibility of its users, what mechanisms can be put in place to ensure older people receive care that enhances their quality of life and wellbeing?

The home care standards focus on quality from a perspective based on a service’s processes and structures rather than a client’s social care outcomes. This is a critical gap that needs to be addressed to ensure aspects of quality of life associated with services are made key outcome measures driving quality. These include the extent to which they help improve users’ health and physical functioning, meet basic physical needs with activities of daily living, guarantee personal safety and security, provide access to social contact, and maximise autonomy, skills, and self-confidence.

As pointed out by Professor Porter in his study of healthcare in the US, the only true measures of quality are the outcomes that matter to consumers. Rather than making quality the responsibility of consumers, we need a rigorous system that monitors outcomes and makes these publicly available so providers face  pressure –  and strong incentives –  to improve and to adopt best practices, with resulting improvements in outcomes.

Dr Beatriz Cardona is research fellow at Macquarie University.

This article appears in the current print edition of Community Care Review magazine.

To subscribe to CCR please visit https://www.australianageingagenda.com.au/subscribe-to-ccr/



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6 Responses to Rhetoric vs reality on consumer direction

  1. Ted Wards September 8, 2016 at 11:14 am #

    As someone working in this field I can remember when HACC was introduced. The aim of HACC was exactly the same, to give more choice to the consumer. That worked to a certain extent until the government turned it into the fractured, inequitable system that did need changing. However, the persons who lead the current round of changes ignored the outcomes of the models that they ended up discarding the system as it did not work.
    However I believe the philosphy is sound, however service providers who have been a part of the HACC system have not changed how they deliver their services.
    Some have and I tip my hat to those who really have embraced this new model. However, we have clients that are illiterate, vision impaired, cultural issues and so on and these ones do not understand that they have a say now.
    We are also battling a culture of older people that their doctors are venerated as Gods and they do not question, or ask for help, or are willing to say what they want. We still have many people who will just accept things as they are.
    We then have those with children of the baby boomer generation and these are the lucky ones.
    Classic example of why this does not work. Client in her late 70s has had very bad bouts of gout and developing arthritis in her wrists and her capacity to be able to bend down and clean the oven and fridge disappeared within a few weeks. So we referred her to My Aged Care, they assessed her and her goals were to get assistance to have the oven cleaned and the fridge once a month. An agency accepted the referral with those goals known and when the rep came out they offered her everything other than what she wanted. So her goals were ignored and they offered her their standard services. She didnt need the other services and the goals she stated were not support because the service, although they had accepted the referral, told her point blank they did not offer that type of support.
    I encouraged the client to go back to My Aged Care and report this and have another referral issued. So she did then another agency accepted in July, They still have not been in contact with her so she has given up. I am hearing this more and more. Ive contacted the agencies involved and the excuse was we are starting to transition and its going to take time. My response was the government has given us four years and extra money to transition and we were all supposed to be ready 1 July 2015.
    Seriously this is one big reason why the new private companies in will win this race because they are prepared to fully support the goals of the clients. Service providers have to start realizing that clients call the shots not the service provider. A rather large company are telling anyone who complains “If you don’t like it go elsewhere”. Well guess what, people will!
    Its time to shake up and get with the flow or get out and let those who can do!

  2. megan September 8, 2016 at 11:58 am #

    Should be compulsory reading for all service providers, consumer groups, and politicians. To ensure understanding and use of CDC you have to change habits of a lifetime, plus respect for ‘betters’ ( forget elders- they are the elders), but when attitudes do change, and attempts made to direct care, you are marked out as ‘uppity’ or a troublemaker or greedy. How many service providers will change the lightbulbs, climb up to clean or do those jobs that older frailer people can’t manage when this may’conflict’ with OH&S for staff members?Never mind that the fall caused by dim lighting or trying to do it themselves, will mean premature entry to residential care and greater cost to everyone?
    Don’t get me started.

  3. Paul ostrowski September 8, 2016 at 1:40 pm #

    My congratulations on a very pertinent piece. CDC has now been in place for well over 12 months and it’s timely to ask whether consumers really are able to exercise fully informed choices and to genuinely personalise their Homecare.

    Yesterday at the ACSA national conference, Stewart Brown presented their annual data which showed that, for an average client of an average provider, only 3 to 5% of their funding is spent outside the immediate provider (ie brokered). There are two possible conclusions. Either the majority of providers are able to satisfy all needs and options for all clients, or clients are strongly encouraged to spend their whole package with the hosting provider. With the latter being the most likely, CDC is clearly not yet living up to its ambition.

    Of course, February will represent a true change. From then, consumers will have true independence. Finally they will be able to choose between providers who capture their funding and those who are focused on providing genuinely independent advice and then a fully personalised package of services from the very best providers in their local communities.

    Paul Ostrowski, CEO, Care Connect

  4. margaret norden September 9, 2016 at 2:49 pm #

    I have worked in this sector for over 20 years and started in case management when packaged care was first introduced in Victoria. Presently I am undertaking locum work and moving around providers(both in packaged care and HACC). It has been really interesting to see how organisations and consumers are responding to the new policy directions. And a lot of it is not good. Not good for staff, not good for the consumers. Not good from clinical practice perspectives, not good from morale and job satisfaction perspectives, not good from consumer outcome perspectives.
    I am seeing the development of KPI driven practice(to justify the costs that now have to be declared to the consumer) at the expense of responsive client driven engagement. Also vastly increased case loads with dispersed responsibility for organisation and follow up of services that seem to only create increased levels of confusion and frustration among the consumers. I am also seeing funds spent on questionable items-with the goal created to support the spending.
    The access to the whole system has become complex and “assessment” heavy-something we moved away from a decade ago. Most consumers and families I am seeing have no idea how to negotiate it. And most likely will have no idea how to negotiate the new playing field in 2017. In response to the new “autonomy” many older consumers will rely more heavily on family to make sense of it and guide them through. And who has the time? And what of the ones who have limited family/friend networks? So, really, they have ended up with vastly more players in their game than they had pre CDC. It is hard not to see them as pawns in a massive clamoring for the funded dollar.
    The whole CDC philosophy and process seems to be about financial management/gain wrapped up in the rhetoric of autonomy and support.

  5. Kate Lambert September 9, 2016 at 11:55 pm #

    To understand what IS REALLY happening in the marketplace, I have been analysing CDC budgets and monthly statements for ANY ELDER in Australia for the last 14 months.

    What I have learnt is fascinating.

    I have also attended many meetings with Elders and Approved Providers to witness for myself what Elders are told and offered.

    Again a fascinating experience standing in the shoes of Elders.

    Is Consumer Directed Care working in the real world for Elders? Yes and No.

    Yes, it is working brilliantly when I support my clients with education about their rights because we can take the low-ball offer of 7 hours of care per week for a Level 4 package and using the 7 NEW RIGHTS of CONSUMERS negotiate that to 18.75 hours of care and then by choosing the right TYPE of care, turn it into 48 hours of care without it costing the client one cent more. That is a brilliant outcome that vastly improves the client’s quality of life and made possible entirely due to CDC.

    On the other hand, no, in so many instances CDC is NOT working. Take the case of a Central Coast Approved Provider who was awarded 25 high care packages in Sydney yet has not office, no Case Managers and no careworkers in Sydney. Their solution was to make an exclusive deal with another ABC Approved Provider to deliver their packages.

    In breach of the Home Care Program Guidelines when an Elder exercises their RIGHT to choose WHO they want to provide the care – they are told by Central Coast Approved Provider and ABC Approved Provider who BOTH visit the Elder, no you can’t have ‘ExceptionalCare’ because Central Coast Approved Provider has done an Exclusive Deal with ABC Approved Provider and therefore you can’t have choice, you have to use the carestaff of ABC approved Provider.

    Having offered a frail 90 year old man a package, a week later they tell him they have to cancel the package because he wants to exercise his right to choice. In breach of the Program Guidelines, not only do they deny him choice – they WITHDRAW the package from him.

    The exact opposite to person-centred care, not to mention totally unethical.

    The exact opposite to Consumer Directed Care.

    In total beach of the Home Care Program Guidelines.

    Do they care about the frail Elderly man in his 90s? Absolutely not. It’s all about illegal exclusive deals and maximising their profit.

    Or what about ABC Approved Provider who charges $954 just to SETUP a cleaning service of 3 hours X twice a week and then charges $51 per hour PLUS 27% of the Govt Funding and then sends in a 20 year old male overseas student who can’t speak English and can’t clean. An appallingly over-priced poor-service that is nothing more than ripping Elders off. Thank goodness CDC gives Elders the power to choose who delivers their services – if they are fortunate enough to allow them to exercise their rights.

    Elders will be educated and empowered by ethical service providers who care about Elders and the unethical non-caring providers will come under public scrutiny for their actions.

    All power to the Elders!

  6. Amira September 12, 2016 at 3:18 pm #

    The problem of insufficient health literacy is not unique to CDC and definitely does not justify criticism of the principles of CDC.

    There are many more studies that counter the central argument of Dr Cardona that consumer choice doesn’t improve quality of service provision. Currently, even for the empowered and health literate consumer, there is very little information that service providers are obliged to offer about what they actually offer clients. If you have a look for example at myagedcare website, or that of individual providers – it is no wander that people struggle to make informed choices, when the information simply is not in the public domain about what people get when they sign up to a service provider, let alone in some cases, how much they will be charged by individual providers.

    This is not the fault of consumers. The uncoupling of packages from providers cannot happen soon enough from the perspective of the many consumers who have had the poor choice to either accept a much needed level 3 or 4 package and pay the unregulated and not uncommonly, unreasonable ‘administration’ charges; or go without essential support for services. CDC has not yet arrived in this sense. It will be interesting to see how much more information providers offer publicly, now that it will be necessary to support informed consumer choices. It can’t come soon enough for many.

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