Home care providers are holding $329 million of unspent funds on behalf of consumers and this could increase substantially in the medium term, ACFA says in its latest report.
The figures have sparked calls by the Aged Care Financing Authority for a policy review amid concerns the unspent funds could be used more effectively elsewhere.
In its July 2018 report released on Tuesday, ACFA says the sum equates to average unspent funds per consumer of $4,613 as of 30 June 2017 – a 26 per cent increase of $946 from $3,667 per consumer the previous year.
“This level of unspent funds represents a large amount of funds not being used for care services,” the report says.
“Unspent funds may accumulate as a result of consumer choice to save a proportion of their budget for future events, or because the consumer does not require all the funds allocated to them. In the latter case, the funds could be used more effectively elsewhere, including unmet demand.
“ACFA considers that a review of policies concerning unspent package funds and the implications for the home care package program is warranted.”
COTA CEO Ian Yates said the figure was not entirely surprising but he said it was important to understand why money was accumulating.
“For example, some funds are being saved up for a significant purchase, such as equipment, or a longer respite period. Some are due to people having being allocated a higher level package than they currently require and not using all of it,” he told Community Care Review.
The financial performance of home care providers was relatively strong with 75 per cent of providers reporting a profit, however there was a slight decrease in profit from the previous year.
The report says StewartBrown surveys for the nine months to March 2018, where the impact of recent reforms are likely to be reflected, indicate that average revenue per client declined by 2.5 per cent, or $1.87, per day, compared with the 12 months to 30 June 2017.
In terms of overall financial performance, the StewartBrown survey indicates that earnings before tax per client per day in the home care sector declined from an average for all providers of $5.37 for the 12 months to June 2017 to $4.39 for the nine months to March 2018.
Adjusting to consumer directed care
The report says the home care sector is continuing to undergo significant change and providers and consumers are still adjusting to consumer directed care.
“These changes give consumers greater control over their own lives by enabling them to make choices about the types of care and services they purchase and from whom they are purchased.
“However while these changes are a positive step for consumers in terms of greater choice and flexibility, consumers need to be better supported in order to exercise informed choice.”
It notes the 2018-19 Budget responded to this need by providing funding for the development of system navigators to guide consumers and with funding to improve the MyAgedCare website.
ACFA says ongoing demographic changes will see an increase in demand for aged care with the proportion of people aged 85 and over growing by nearly five per cent of the population by 2055, compared with just over 2 per cent today.
Government expenditure on aged care is projected to nearly double from 1 per cent of GDP currently to around 1.7 per cent of GDP by 2055, driven by wage increases and the increasing complexity of chronic health conditions in ageing populations.
The demand for aged care services will expand with the ageing of the population, in particular a rapid expansion in the oldest age groups.
It notes the challenges of supplying enough aged care to meet demand is likely to be felt in the next 10-15 years as the baby boomers begin to enter the aged care system.
The numbers on home care
The aged care sector represents 1 per cent of GDP, provides services to 1.3 million Australians and directly employs over 366,000 people.
It is one of the fastest growing and arguably most important industries in the country, according to ACFA, which notes the sector is still adjusting to many changes including giving home care consumers choice of provider and services.
What the government is spending on aged care
- Total of $17.1 billion up from $16.2 billion. Expected to reach $18.6 billion next year and $22.2 billion in 2020
- $2.4 billion on home support
- $1.6 billion on home care
- $11.9 billion on residential care
- Of the total aged care budget, 66.2 per cent is spent on residential, 16.9 per cent on home support, 11.6 per cent on home care and the rest on flexible and other care
What’s being provided in the community sector
- Subsidised home support or care provided to 33 per cent of people aged 70 and over
- 97,516 home care packages, up 10 per cent up from 88,875
- 722,838 people getting CHSP
- 62,089 getting HCC in Western Australia
- 108,000 on the national prioritisation queue at March 2018
How home care is doing
- Home care providers: 702, up from 496
- Home support providers: 1,621
- Revenue: $1.85 billion
- Expenses: $1.65 billion
- Profit: $201 million
- Commonwealth funding: $168 billions
- Consumer contributions: $150 million
- Unspent funds: $329 million
Who the workers are
- 366,000 paid age care workers, less than half in home services
- High job satisfaction but concerns about pay and perception that aged care isn’t valued
- 14 per cent of home support and home care workers are casual or contract
- Average age of direct care employees is 52
- 23 per cent of home support workers born overseas
Read the full report here