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Leaders propose strategies to improve sector viability


A deal between stakeholders about service and funding expectations, aged care treated as a necessary part of ageing and a non-political approach to accessing consumer wealth are among strategies needed to ensure the sector’s viability.

That’s according to industry leaders and representatives who discussed the royal commission and sector issues at Health Metrics 2019 World Conference in Melbourne last Thursday.

Panel members discussed key strategies needed to ensure viability of the sector in the current environment that includes the royal commission and its possible outcomes, the ageing population, declining profitability for providers and the public’s poor perception of aged care.

CEO of aged care peak Leading Age Services Australia, Sean Rooney said a social compact between the community, government and the industry that clearly sets the expectations and commitments from all the parties must be part of the solution.

“That compact would say things like the community expects this level of service, the government would fund that level of service and the industry will deliver that level of service.

“And the government can’t change how much they want to fund overnight without any consultation,” Mr Rooney told delegates.

L to R: Chris Baynes, Sean Rooney, Norah Barlow, Steven Strange

Elsewhere during the discussion Mr Rooney reiterated calls for funding now, not after the royal commission reports its findings.

He called for an additional $3 billion to improve the viability of the residential aged care sector and cap the wait time for a home care package at three months.

“If you want to bring stability to residential aged care back to the level of financial performance across the industry prior to the ACFI changes in 2016, we need $1.3 to $1.5 billion over the next 18 months,” Mr Rooney said.

He said LASA believed it was appropriate and necessary to limit the wait time for a package for someone assessed as requiring care in the home to 90 days.

“In order to realise that over a three year period – we think it will take three years to get to that – about half a billion dollars a year” is needed.

‘Necessary part of the fabric’

Fellow panellist Norah Barlow, who is CEO of New Zealand aged care provider Heritage Lifecare NZ, said aged care needed to be seen as a normal part of life rather than a burden on government funds.

“I would like to see aged care treated as a necessary part of the fabric of what we do as part of ageing and not treated as a taker from the public purse,” said Ms Barlow, a non-executive director and former managing director of Australian listed provider Estia Health.

Aged care should be treated as part of the long line of services to care for people, the same way a doctor is treated as a respected professional, not a taker, Ms Barlow said.

If we saw aged care like that then it would be easily funded, she said.

“The for-profits get tainted with that as if you are taking the money but in actual fact it is the capital being circulated and as long as people understand that then I will be happy.”

Non-political approach needed

The CEO of aged care software company Health Metrics, Steven Strange, called for a non-political approach to discussions and measures to access older people’s wealth.

“I would like to see the government not politicise what we call tapping into people’s estate. Don’t politicise it or call it a death tax.

“It’s the stuff we need to fund the industry and with that funding, the bankers come back to the table and the likes of bigger and smaller groups are suddenly affording the cool technology,” Mr Strange told the conference.

Referring to the concept as a death tax or similar would kill the opportunity for the sector to be able to afford to do things more efficiently, he said.

Read also

 Technology an important enabler for aged care, says Colbeck

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3 Responses to Leaders propose strategies to improve sector viability

  1. Susan Watson September 4, 2019 at 11:06 am #

    Some great discussions, well done, totally agree, the non political approach is really needed, the sector will continue to slide backwards without this injection, and I agree that waiting for the Royal Commission findings that a major injection is needed, and then waiting for any action on those findings and recommendations is too long to wait. There is no way that these struggling businesses can invest in infrastructure and technology without some boost. The hospitals at least can do this, as they are expected and budgeted to do so, and the public insists on it, not with Aged Care unfortunately. Well done to those speaking up.

  2. Paul Dwyer September 5, 2019 at 10:11 am #

    One key area of funding relates to the calculation of the Maximum Permissible Interest Rate(MPIR).

    We note the systemic change in the way residents pay for accommodation. Daily Accommodation Payments (DAPs) are now 40% and continuing to increase as the preferred method of payment.

    When the reforms commenced in 2014, the MPIR interest rate was 6.69%.

    The Department will shortly announce the October thru December interest rate for new residents will be 4.98%.

    For a facility who had a room accommodation of $550,000 in 2014, and is unable to increase this, it represents a reduction per resident of $9405 per annum, when comparing 2014 and 2019.

    This leads to two further questions.
    – Is it time for the Minister to examine the method of calculation for the MPIR.
    – As part of long term planning, should Government make DAP mandatory, redesign the calculation of the MPIR against a higher rate, and allow residents to have the capacity to use their assets to meet their own care needs above the basic level

  3. Anton Hutchinson September 5, 2019 at 2:21 pm #

    It’s great to see an actual conversation going on nationally about funding, it’s long overdue.
    Waiting even longer for the conclusion of the Royal Commission does only one thing and that is in favour of the Government at the expense of consumers and operators.
    The government has a plethora of studies, reports, complaints and even ACFA telling of the true picture of funding so further delays are at the very real cost of the public.

    This whole catastrophe was brought about by the government, they suspected that some providers were over claiming (hard to accept if you have ever been validated) and thought that kicking the whole industry was acceptable.
    Real pressure needs to be on the government and its needed right now, they are sitting back thoroughly enjoying our discomfort while rolling in the savings!

    A lot of providers have been apathetic about the situation, waiting in the wings for a miracle but now is the time to come out of the shade and make a noise. I understand fully about retribution etc but this is worth the risk. I have been pushing LASA for a walk on Parliament house and I urge all to also push and stand up.

    Come to Canberra, I’ll make you a cup of coffee and we can put this firmly on the government table. Push your peak body now!

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