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.
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.
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