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MYEFO measures ‘unlikely to help’ embattled providers


The economic measures announced in the federal government’s mid-year budget outlook are unlikely to improve the financial struggles many aged care providers are currently facing, according to an analysis of the fine print.

Grant Corderoy

Grant Corderoy

Aged care funding was the centerpiece of this week’s Mid Year Economic and Fiscal Outlook, with $287 million for 10,000 high level home care packages, a $56.4 million government top-up to reduce basic minimum home care fees and $111.2 million to increase the viability and homeless supplements for residential care facilities.

The government also will provide an additional $81.7 million to improve services, regulatory arrangements and workforce arrangements, as well as $98 million to increase MBS fees for GPs attending aged care facilities.

But in their analysis of the outlook handed down on Monday, aged cared specialists StewartBrown say financial performance results for September, due to be published on Thursday, show many providers are continuing to struggle, and the MYEFO measures are unlikely to shift the trend.

Residential care loses out

The analysis notes the September quarter financial results for residential aged care providers are “well below” those for the same period last year, and apart from the $111.2 million increase in the viability and homeless supplement there was no increase for the residential sector.

“While the increase in the viability supplement should improve the results of a relatively small number of providers, we do not see these forecasts changing significantly as a result of measures announced yesterday,” the analysis says.

Senior partner Grant Corderoy told Community Care Review while the supplements were important it was disappointing there was no additional funding for residential care providers.

“Residential is still under-performing, it’s still got a funding crisis, and probably they should have used this opportunity to have additional funding,” he said.

Home care a winner

The main winner in the MYEFO was home care, Corderoy said, with the release of 10,000 high care HCPs providing a shot in the arm for home care providers, who have also experienced a “general decline” in financial returns compared to a year ago.

Given that margins are generally higher for high care packages, the increase should boost the performance of providers who offer them, the report says, as well as easing waiting lists for high care packages.

However it was unclear whether the 10,000 packages were new or just being brought forward from additional packages announced in the budget.

The report also took a wait-and-see approach to the announcement the government would reduce fees for low care packages.

“It may have been better if it was accompanied by an announcement that the daily fee, even at the reduced level, was a compulsory charge, in the same way that it is in residential care,” the report says, adding that would be more in line with co-payment recommendations made in the Tune Report.

Corderoy also said clarification was needed about whether the reduced daily fee will affect clients who are on low care packages as an interim measure while they wait for their appropriate level.

“We do not know, based on the information released, whether this will affect clients that have been assessed for a high care package but are currently allocated a low care package,” he said.

The report also notes that the MYEFO had failed to allocate any additional funds to CHSP, but says reducing fees on lower level home care packages might act as an incentive for people to move off the commonwealth support scheme.

You can read Stewart Brown’s analysis of Mid-Year Economic and Fiscal Outlook here.

Read more: 10,000 home care packages funded in $550m aged care boost

Read more: Peaks welcome boost to residential aged care funding

Read more: Home care sector faces tough times

Read more: 45 per cent of facilities making a loss

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3 Responses to MYEFO measures ‘unlikely to help’ embattled providers

  1. Darryl Chapmann December 19, 2018 at 12:03 pm #

    A couple of comments. The Daily Care Fee in residential care is not a mandatory fee but a maximum rate, although, because of the under-resourcing of residential aged care I have never heard of a provider that doesn’t collect this fee. Many providers of HCP don’t charge a client the Daily Fee as it saves them the hassle of refunding it as unspent on separation. These clients build up considerable surpluses just from the subsidy component, which would indicate that they are on too high a level package in the first place, which in turn means someone in genuine need misses out. Incorrect package assignment, resulting in significant surpluses, also means that some clients are provided with services/items for which they should not be entitled. It encourages some providers to possibly do the wrong thing. These are tax payer dollars and are being misused to the detriment of everyone, including residential aged care services. Darryl (Residential and HCP provider)

  2. Community Care Provider December 20, 2018 at 3:09 pm #

    Fund the services providers and not the Home Care Package Providers. In this way the client gets the services they need, no storing up surpluses and the available funds go further and provide more people with the care they need to remain living in the community.

  3. Dezlie December 31, 2018 at 11:15 am #

    The Daily Care Fee is in fact a contribution to ward the persons care and not a fee to the provider. I really dont understand why older people on a pension should contribute to their care as I understand people on the NDIS dont have to. $70 per week is a lot out of the pension. I suggest though that if they are to contribute then it should be mandatory as it is in Residential. I am hearing from clients that providers say they take this fee from the package so there is no out of pocket for the client. How is this allowed? I also agree with Darryl that the department should reallly audit around what is being perchased with this money. I know of people who purchase food and general househld white goods. Not ok and not at all related to the persons care needs.

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