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Unspent funds in home care under further scrutiny


Amid increasing attention on unspent funds in home care packages, the latest StewartBrown industry benchmarking data shows average amounts continue to increase.

New data released by the accounting firm on Tuesday shows average unspent funds have grown to $5,862 per client in the March survey, up from $4,255 in June 2017.

On average 14.5 per cent of package funding was unspent across the national survey sample of over 21,000 packages.

StewartBrown said providers should be aiming for a target of 5 to 6 per cent of unutilised funding.

While the national average is approaching $6,000 per client, some providers have reported consumers with surpluses over $20,000.

Community Care Review understands the Department of Health has recently met with providers and sector experts on the issue of unspent funds to better understand the drivers for the accumulation of funding and possible responses.

Speaking at the LASA NSW State Conference earlier this month, StewartBrown senior partner Grant Corderoy said the reluctance amongst some consumers to accept necessary additional care and support was a major reason for the build up in unused subsidies.

He said nationally there was in excess of $320 million in unspent funds sitting in the balance sheets of providers.

A drop in pricing among some providers in response to increased market competition was also impacting on the utilisation of funding, Mr Corderoy said.

This week, the Department of Health also released a new fact sheet for providers on “actively managing unspent funds”.

In the fact sheet, the department identified client choice, automatic package upgrades and temporary leave as contributing factors to the accumulation of unspent funds.

The government reiterated the position that a “small proportion” of a client’s budget can be set aside for future events, such as leave of a carer.

The department also encouraged providers to help clients opt out of the home care queue if their current needs are being met to avoid an unnecessary upgrade to a higher level package.

Stakeholders in the sector such as COTA Australia have argued for the structure of the four package levels to be reconsidered in the ongoing reform of the home care system to ensure a more even and incremental increase in funding, which would positively impact on unspent subsidies.

Industry consultant and trainer Lorraine Poulous said home care providers should be working creatively with clients to understand how a package can be used to meet their diverse needs such as through allied health services and reablement programs, chronic disease management and assistive technology.

Historically, the program’s original guidelines explicitly referred to the option of a contingency fund of no more than 10 per cent, which could be used in an emergency or to meet unplanned needs. However, this specific advice was later removed as the program has been implemented and demand for packages has grown.

Elsewhere, the StewartBrown survey reported a decline in the financial performance of home care providers, including for the top quartile of providers.

The March quarter showed a decline in average Earnings Before Tax from $5.37 per client per day in June 2017 to $4.39.

StewartBrown said many new providers have a low-cost model that “promises more than [organisations] can deliver, resulting in pricing pressure.”

Administration costs have also decreased on June 2017 levels as providers focus on achieving greater efficiency and economics of scale, the report said.

Access the StewartBrown reports here.

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6 Responses to Unspent funds in home care under further scrutiny

  1. Ellie June 22, 2018 at 9:18 am #

    Funny that prior to CDC these funds would have never accumulated to this extent… and we could subsidise the small proportion of those socially isolated, complex care needs individuals who otherwise would’ve had to go into care…
    One option is asking whether consumers would be happy to forego some of their funds to everyone, like insurance… under this model it’s impossible.

    Clients hold onto the money because it took them so long to receive the package and generally on higher levels of support tend to stabilise. They would like to keep the money sitting there in case they need 24/7 support or lots of home modifications.

  2. Dr Dwyer June 22, 2018 at 12:13 pm #

    I think the money is being pooled for the intended reason. When the client needs this money most they can activate it for crisis and sickness or complex needs ….and the problem is ??

  3. Megan Tait June 22, 2018 at 1:41 pm #

    I would like to clarify the “unspent funds” versus the ” Contingency fund” issue that I am seeing more and more in the monthly statements of some community clients . I’m not sure if older recipients of HCPS are aware that Home Care Providers can retain a certain amount of a HCP ( Home Care Package) for “Contingency purposes ” but this is not compulsory at all . Recently I assessed a client who apparently had a Level 2 HCP and wanted more assistance with transport , unbeknown to this man he has $12,000 in his Contingency fund ! What’s going on here ? this is the 4th person with accumulation of contingency funds that has been advised their HCP are fully utilized – This is unethical .
    Secondly the HCP Providers ‘Administration and Case Coordination ” fee that providers are able to charge can range form 30% to 50% of their HCP Government subsidy and urgently needs to be sealed at a standard amount for all HCP – this is just and prevents elder abuse , yes financial elder abuse and discrimination . I again explained to an lovely 89 year old widow last week that the provider took 50% of her HCP before she even got to use it and she was horrified and unaware . I’m sorry this unspent funds article is a joke , here we are with frail and ageing people sitting on a Level 2 that is maxed out , approved for a Level 4 that will never eventuate in the current national cue crisis and now being advised that they cannot access CHSP to bridge the Gap , while waiting for their higher level package – I see this all the time , that’s the truth I work it and live it and sadly these older people deteriorate while in the waiting cue with no options than to enter into RACF , so much for CDC and My Aged Care .

  4. Ellie June 22, 2018 at 3:59 pm #

    The issue is when clients pool such large amounts of funds for ‘a rainy day’, they are at risk of entering residential care or dying without ever accessing the funds… these are returned to the government who see windfall and may potentially reduce the packages available in the future. The truth is, lots of these clients with large surpluses have been on home care packages for years, and have lots of protective factors working in their favour they do not need to access their home care package to fully utilise their funds. There are also limitations and exclusions they can’t use funds for which may also mean the money just sits there anyway, a liability for the provider. Under consumer choice principles, it doesn’t seem right to harass a client to ‘just buy an iPad’ when it is not in their interests and is not an appropriate use of taxpayer funds of ‘just use it’. The unspent funds debacle also refuses to acknowledge the workforce as a massive issue. Trained carers/staff are dropping out of the workforce because it doesn’t pay enough, nor does it guarantee them security, respect and further training and career progression pathways… so what is the point of having package funds sitting there if there are not the carers there to come in and support the client? Carer hours are the major expense (and so they should be) as they are the ones providing personal care, shopping, transport and respite when clients need it most.
    Generally clients accessing home care packages after the Feb 2017 reforms are of much higher need so will likely not accumulate such massive surpluses. HOWEVER, they require huge amounts of manpower, time and expertise to even sign the agreement to start services. We have entered into a new era where on paper things look wonderful, increased choice, increased packages, increased transparency, however in reality we are looking at home care package providers under increased pressure to deliver services and find carers in a workforce which is depleting… result? Agency staff / increased administrative requirements = unhappy clients. I swear, giving older people a million brochures and a fancy website does not replace the plethora of experienced, compassionate staff who are walking out of the sector.

  5. Jason July 11, 2018 at 5:37 pm #

    Surely this is a good reason to review the clunky package level allocation and move to a needs led funding system like NDIS? If someone realistically only needs or wants $33k of services why allocate a level 4 package? Better their needs are assessed and services delivered as they need them rather set funding block amounts that may not be totally needed but that locks funds up in the system whilst the wait lists grow ever larger.

  6. Caroline July 12, 2018 at 9:00 pm #

    Allocated funding under the current HCP system is ridiculous. We have people on L2 who have genuine need for more service hours and/or equipment and we also have people on L4 with seriously under-utilised funds. A flexible system between levels as well as regular re-assessment is the way to go! The concept of allocation of funds to meet needs is right but its implementation is poor and needs a re-think!

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