Top Menu

Providers prioritised financial viability at expense of care


Some aged care providers lack the right balance between care quality and safety considerations and financial concerns, the royal commission has heard.

Providers ought to consider whether they should make certain decisions such as cutting staff, not just whether they can, senior counsel assisting Peter Rozen told the Royal Commission into Aged Care Quality and Safety.

Last week’s hearing of the aged care royal commission in Hobart focused on the leadership and governance of aged care providers Southern Cross Care Tasmania and Bupa Aged Care Tasmania (read other coverage here).

Both Southern Cross Care Tasmania and Bupa South Hobart had reduced staff because of financial pressures, and both then had facilities sanctioned for unmet quality outcomes.

Key themes highlighted by witnesses included:

  • deficiencies in care caused by insufficient care time
  • deficient organisational culture
  • insufficient attention to quality and safe clinical care
  • poor communications from facilities
  • a lack of responsiveness to complaints.

The royal commission heard that financial considerations at both organisations were prioritised at the expense of care, Mr Rozen said.

Peter Rozen

Former facility managers at Southern Cross Care Tasmania told the royal commission they felt pressured to reduce staff numbers irrespective of the impact on care.

A general practitioner and former and current staff at Bupa South Hobart told the royal commission their concerns about the impact of reducing nursing staff hours and skill levels were ignored.

“This week’s evidence has raised questions about whether the right balance has been struck between quality and safety of care considerations on the one hand, and financial considerations on the other hand in some of our aged care providers,” Mr Rozen told the royal commission.

“Financial viability must be a central consideration of proper business management in both profit and not-for-profit entities,” he said.

“But it must be remembered that financial viability is a means to an end in aged care; it is not an end in itself.”

He said the evidence presented throughout the week highlighted the risks to residents when governing bodies of approved providers prioritised financial and funding-considerations over quality and safe care.

“We must have an aged care system in which organisations have the governance, leadership culture and skills to ensure that high-quality and safe care becomes not just a stated vision but the daily practice of all involved in caring for older Australians.

“A system in which the decision-makers and approved providers consider not only whether they can make decisions such as cutting staff but whether they should make such decisions,” Mr Rozen said in his closing statement.

To stay up to date on the latest about the Royal Commission into Aged Care and Quality go to our special coverage. 

Comment below to have your say on this story

Subscribe to Australian Ageing Agenda magazine and sign up to the AAA newsletter



, , , , , ,

4 Responses to Providers prioritised financial viability at expense of care

  1. Anton Hutchinson November 19, 2019 at 6:59 pm #

    It’s a bloody disgrace that the Royal Commission, knowing how much has been slashed out of residential care continue to allow rediculously incorrect statements from government and other sources.

    Even the haters of aged-care by now must be aware that the industry is well and truly in crisis.
    What choice do operations have when the government forces you into insolvency other than to make cuts to whatever options they gave!
    Any business has the right to make a profit, I simply don’t understand the thought pattern of those so offended by the thought, why would anyone go into business?

    This particular business doesn’t have the ability to charge more to reflect operational costs like other businesses so the only intelligent remedy is to insist that our very surplus orientated government to immediately increase funding to Residential Care.

  2. Christine November 20, 2019 at 2:47 pm #

    Having worked in aged care for some time now, l am disgraced at how readily aged care providers have cut staff to keep themselves afloat financially. The “care factor” from some of these businesses has been abysmal for a very long time, well before the drastic government cuts of recent years. Obviously their business model was not well thought out from the start. Instead of using money to prop up the wages of upper management, buy more land to to build ILU’s, corporate cars, shareholders, etc, etc, etc, it would have been so much better if they could have used some common sense to look after the elderly properly. Business will “thrive” if set up properly, and for the right reasons. l agree government needs to provide more funding to aged care, but aged care providers must be held accountable, on how that money is used. Too many aged care residents are not getting proper care, proper nutrition, proper treatment, lack of activities, etc.

  3. John November 23, 2019 at 1:57 pm #

    Why would the Royal Commission go on a witch hunt and blame game with these providers, I understand they want to look at why the agency smashed them, but it must be obvious by now that providers have to do whatever it takes to keep their businesses afloat! I don’t know why other businesses don’t get criticised when they cut staff for trying to stay open. Watch this space as providers go under. Providers need support, this rubbish about making super profits is now a myth.

  4. Ross Greenberg November 24, 2019 at 11:40 am #

    My wife has only just signed with a provider on the 5-8-2019. My wife has frontal lobe dementia and it robbed her of the ability to walk among the other issues faced by dementia patients. We interviewed 5 providers and outlined our immediate primary goal of the ensuite modification. We also wanted the work to begin immediately after the required funds had accumulated. This would entail all drawings, specifications, quotes, selection of contractor and time for the job to start to be in place ready and waiting. It was estimated that sufficient funds would have accumulated by 30-10-2019. I had organised for 5 contractors to visit so I knew what the modification would cost prior to signing so schedules were known by the provider at time of signing. The OT for the provider visited about 2 weeks into the agreement and took all information to design the modification as requested. The OT advised it would take about 4 to 6 weeks to have the design ready. I discussed with the OT the hobless vs hob design and stated we wanted the hob design. The new shower hob would be 40-50mm high and the shower floor would be the same height, instead of the existing 125mm hob and the shower floor dropping down 75mm. The hob mod. would be around $10,000 vs hobless at $20,000+. My wife can’t walk by herself and has no balance, we are in a HUG position where I support most of her weight when we shuffle to showers, toilets etc.. When we enter the shower recess I have to take one arm away from my wife to help lift her leg over the 125mm hob, at this stage we are both at risk of falling. Our primary goal was accepted by the provider causing us to sign the agreement, it was also communicated to their OT prior to signing and on other occasions to highlight the urgency of the modification. The OT got the documentation to us on 20-11-2019, 7 weeks later than stated, with a statement they will use their contractor, meaning all the work I had undertaken to get the modification completed ASAP was not accepted, and YES NOTHING was said about this UPFRONT by the provider’s representatives, including the OT. Now at this time of the year businesses are closing for the Christmas holiday season, this means the promised outcome happening in November 2019 will now be delayed until February-March 2020, 3 to 4 months. Their contractor visited and his statements frightened me because of the extra work he would do, way in excess of the other 5 contractors recommendations. Our provider has a closed system for contractors which causes a very long waiting period, a known fact, and possibly a higher cost compared to competitive quotes from a wider pool of contractors. The Royal Commission should look at these provider closed policies to see if outcomes can be delivered quicker and less expensive by using an open policy selecting from the wider contractor pool that is available to every one else. The Royal Commission into the banking industry uncovered criminal practices because of closed policies and systems. All Royal Commissions should investigate closed policies and practices to see if anything is lurking in the shadows. My concern is the delays may cause my wife to suffer injury while waiting for the modification. ALL my preset goals have not been met, my provider is failing dismally and I believe in breach of general contract law. I am ready to research what options does my wife have to remedy this situation. I only hope that business in this industry do not have government exemptions against legal remedy, as this would create industry unsavory practices. My understanding is government is by the people for the people, not to harm to people by protecting business.

Leave a Reply