Enforcing mandatory daily fees for home care would be positive for both the sustainability of the sector and for consumers, the aged care royal commission has heard.
Paul Sadler, CEO of Presbyterian Aged Care, which provides home care services to some 830 people a week, said older people who weren’t being charged the basic daily fee ended up with less money available for their care.
“We currently have a situation where not all providers charge the basic daily fee, and in some instances, not even the income tested fee, Mr Sadler told the Royal Commission into Aged Care Quality and Safety.
“And the net effect of that is actually to reduce the available funds for the home care recipient in those circumstances, so they actually have less money available for their care.”
However, he added there would have to be a hardship provision in place for people who were unable to contribute if basic daily fees were to become mandatory.
Erosion in purchasing power
Mr Sadler also told the commission there had been a “gradual but inexorable erosion in the relative purchasing power of HCP and CHSP budgets”.
Whereas twenty years ago a level four Home Care Package of $30-$35,000 would have provided about 20 hours of care, today it would only buy about 10-12 hours.
He also noted a disparity with NDIS funding, saying under the disability insurance scheme it was possible to access packages of over $300,000, and backed recommendations made in the Tune Report for a level five home care package.
“I would argue that we absolutely need a higher level of funding available to help people stay in their own homes, if that’s their choice,” he said.
Mr Sadler said with the waiting list for home care currently at 128,000, up to 50,000 extra packages would be needed to absorb demand.
Asked by Counsel Assisting Timothy McEvoy about interest generated on unspent funds, estimated in recent figures released by Stewart Brown at almost $7,000 per client, Mr Sadler said the interest generated from Presbyterian Care’s unspent funds over the last year amounted to about $21,400.
That interest was considered “part of general interest income”, he said and used to support all of the provider’s aged care service operations, including CHSP and residential care.
He also said some providers accumulated unspent funds “for the proverbial rainy day” and that Presbyterian Care believed this was often in the interests of a client.
“Look, we do (hold funds) where we believe that will be in the interests of the older person and we absolutely agree that holding a contingency amount or an amount for a planned purchase makes a lot of sense, and the flexibility of the individual budget actually supports that,” he said.
Other reasons for accumulating unspent funds included consumers saving for a bigger expense like respite or equipment, or choosing not to take up a full service. Also, the assessed level of care might be higher than was needed.
“So for whatever reason there has been a mismatch between the ACAT assessed level and the level of care that is actually needed by the recipient,” he said.