Aged Care Guild commissions Deloitte report into ACFI changes

The Aged Care Guild has said successive budgetary changes are undermining positive impacts of reform, and has commissioned Deloitte Access Economics to review the impact of changes to the Aged Care Funding Instrument (ACFI) announced in the 2016-17 budget.

The Aged Care Guild has said successive budgetary changes are undermining positive impacts of reform, and has commissioned Deloitte Access Economics to review the impact of changes to the Aged Care Funding Instrument (ACFI) announced in the 2016-17 budget.

In a statement released today, the Aged Care Guild, the peak body representing the sectors’ major private providers, said that the Federal Budget’s proposed changes to the ‘complex health care’ domain of the ACFI, designed to save $1.2 billion, as well as the cuts of $472 million announced in last December’s Mid-Year Economic and Fiscal Outlook, continue a pattern of cuts to the sector.

This included the freezing of indexation in 2012 and the removal of the payroll tax supplement in the 2014 budget, which the Guild said cost its members over $100 million per annum.

The Guild’s announcement follows the release of a budget analysis by Ansell Strategic commissioned by industry peak body Leading Age Services Australia (LASA), which found the proposed changes to ACFI would equate to savings of $350 million in excess of those forecast by government in the budget and MYEFO.

The Deloitte analysis is expected to be completed after the 2 July election, the Guild told AAA.

Chief executive officer Cameron O’Reilly said while the Guild understood the need for budget responsibility, this should not be achieved at the cost of the industry’s capacity to meet the needs of an increasingly ageing population.

The 5.1 per cent overall funding increase for residential care announced in this year’s budget did little other than cover new places coming on-line, he said.

While the Guild acknowledged the recent regulatory reforms had been positive for the sector and enabled investment in care options for residents, Mr O’Reilly said these impacts were being undermined by successive budgetary changes.

“Our members are genuinely concerned the tightening in available care funding will impact their capacity to secure capital to invest in quality care and new beds for future residents,” he said.

Mr O’Reilly noted a recent report from accountancy firm RSM had concluded there was little evidence that sufficient supply will be created to meet even the most conservative forecast of demand for places, and the report by Ansell Strategic had warned the ACFI changes will discourage high care admissions across the sector.

He said in this environment, members thought it was unlikely the industry would meet the projected demand for 76,000 new beds that the Aged Care Financing Authority said were needed by 2023-24.

“The recently released Aged Care Roadmap provides a good directional statement in terms of transitioning to a consumer-driven care model but government needs to ensure the sector has the confidence to invest if there is to be real consumer choice,” he said.

“Governments can adjust the budget each year but the reality is they can neither reverse the need for the provision of more complex healthcare nor the increasing demand for residential care places.

“That is why the latest $1.2 billion savings in the Federal Budget need to be properly reviewed and reconsidered by whichever side of politics is successful at the July election,” Mr. O’Reilly said.

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Tags: acfi, aged-care-guild, Cameron O’Reilly, policy,

3 thoughts on “Aged Care Guild commissions Deloitte report into ACFI changes

  1. I can understand that the private operators are concerned about capital to finance new sites and services, but what about care itself.

    Are we for real? Cutting the funding to an already stressed industry, really?

    While we all sit in our lounge rooms, watching the news on the Australian election campaign, thinking about the cuts and taxes we might endure in the end, from either side of the race.

    Spare a thought for the silent and forgotten people that built the country we so enjoy as the legacy of their efforts. I am refering to the elderly in or nursing homes. The government has planned a massive cut to their funding by 1.2 billion and has removed half the funding for complex care.

    This will cause a huge reduction in care provision, specialized services in palliation and dementia end of life care. These citizens are already being forgotten by most of the political parties as their votes wont go in the barrel and they are obviously not important enough to be given the extra funding they need as the numbers of frail elderly grows.

    These citizens sit quietly in there beds and chairs, eating food most of us would return without compliments, missing their freedoms and loved ones, not knowing the people who come in to provide services as they are not family and usually diverse and different in culture and language.

    These citizens have paid their dues, blazed the trails and built the bridges and are still being taxed. The rest of society should be their voice and stand strong against the changes being made by our heartless and ruthless politicians. I can only hope that when the time comes and your choices for independent care are lost, that you understand that what you get in care quality is what you allowed to be delivered to your parents and elders.

    As an industry that pumps the rhetoric of positive, active ageing and person centered care, we are all smoke and mirrors.

    Remember all people and politicians. …….your turn is coming.

  2. Sure, these budgets cuts evidence our government’s contempt for the elderly and they should be vigorously challenged. But I’m not certain The Guild or our other peak bodies are up to the task.

    Crying poor when you’re on track for a 25% annual profit increase, spruiking your next IPO and acquiring facilities by the dozen will be a tough sell.

    Lobbying for deregulation while asking for more government intervention or promoting high standards of care while advocating for the removal of RNs has shot your credibility. And, judging by the tone of AAA reader responses across a range of your initiatives, even your own industry finds your inconsistent messages quite curious.

    So I’m guessing the Commonwealth probably wont be too keen on funding your desire to turn a Porsche into a Bugatti.

    Good luck, but let’s not hold our breath waiting for a result orchestrated by our dear leaders.

  3. Well said, gentlemen.

    As you have both identified, we’ve been hijacked by profit-driven charlatans and funded by one-term bureaucrats who don’t think anyone will notice if Aged Care is all show and no go.

    We get thrown the occasional feel-good cliche, the next BIG THING to prove we’re a dynamic and care-focused industry (active ageing and restorative care) but, on closer inspection, is just meaningless babble that wont be funded, wont be practiced and wont ever have a chance of working under our existing model.

    Person centered care…hands up all those with staff/resident ratios of 1:3, no daily shower lists or the ability to serve a cooked breakfast at 10:30?

    Reablement…how, more heat packs?

    Consumer directed care…take it or leave it (there’s your choice)

    Surely there’s at least one policy maker or CEO out there with an elderly parent? Unfortunately Drew, their time doesn’t seem to be coming soon enough

    Our complacency is shameful.

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