200,000-place shortfall in 30 years: CHA

Catholic Health Australia says there will be 200,000 more aged care places in 2039 if the Government adopts a new model (pink line) for aged care planning.

There will be a shortfall of nearly 200,000 aged care places in 30 years time if the Commonwealth Government does not adopt the aged care planning recommendations from a recent report, according to Catholic Health Australia (CHA).

The National Health and Hospitals Reform Commission (NHHRC) suggested in its interim report on the nation’s future health needs that the population base for care planning should be lifted to those aged 85 and older.

It said the age of people requiring aged care had increased significantly and the ‘old old’ segment of the population was growing at a much faster rate than the current population base of people aged 70 and older.

“If we continue to use a benchmarking planning ratio for aged care places based upon the population aged 70 or more, we will see a shortfall in the actual places that we need,” the interim report said.

Modelling conducted by CHA according to this recommendation, estimates that the shortfall will reach 195,954 by 2039.

The CHA analysis made two projections: one using the current ratio and the other employing a new model, based on the number of people receiving care as a proportion of people aged 85 and over in 2007.

Under the alternative planning ratio there would be a 241 per cent increase in the number of beds by 2039, compared to 2007 levels.

However under the current ratio, the number of places would rise by just 153 per cent.

The organisation’s CEO, Martin Laverty said the proposed model was much more appropriate given the expected increases in aged care demand.

“The formula that the commission is proposing is one that gives us the flexibility to meet that extended demand.”

Mr Laverty also supported the commission’s recommendation that bonds be considered for high care residents, saying the report had demonstrated inadequacies in current funding.

“You can’t argue with the need for more aged care places,” he said.

“The focus now has to be on how we finance the provision of those places to have a viable residential and community care sector.”

But Aged Care Association Australia (ACAA) is concerned that estimates of future need may lead to over-supply.

The organisation’s CEO, Rod Young ACAA said there was a seven per cent over-supply in residential aged care places based on the existing formula. 

“There is no simple answer but if the current allocation methodology is leading to considerable over-supply any model that exacerbates that scenario has to be strongly questioned, as the aged care industry bears the full financial risk of over supply,” he said.
 
“Government policy is to ensure over-supply which, though laudable in the name of choice for consumers, is financially highly risky for aged care providers whose subsidy income has for years been predicated on occupancy levels at 98 per cent or higher.”

It is expected that the Rudd Government will make a formal response to the commission after the full report is released around the middle of the year.

A spokesperson for the Minister for Ageing, Justine Elliot, said the government is committed to the long-term viability of the aged care sector

“We are looking forward to continue listening to older Australians, the community and the industry to hear their ideas,” she said.

“We also encourage a robust and constructive debate to take place.”