AN-ACC minutes still need work

The price paid per minute should be the same across each class of the Australian National Aged Care Classification, writes Mark Sheldon-Stemm.

The new funding and minutes under AN-ACC demonstrate a movement towards a fairer system, but they remain significantly unaligned to paying for care.  

When the new pricing came out in October 2024 my first analysis involved taking the total funding per class and dividing it by the minutes required under each class to see what price was being paid per class. The table below shows the outcome of this analysis:

Source: Research Analytics

The graph shows the return per minute for each class a provider is paid for carrying out the care for residents in these classes. As the graph shows the price paid varies from $0.80 per minute for class 1 and 13 to $0.44 per minute for class 2.

Mark Sheldon-Stemm. (Image: Supplied)

It is unclear to me how these prices, and the minutes, have been set. Have they been set by the Department of Health and Ageing alone without input from Independent Hospital and Aged Care Pricing Authority?

The other consideration on pricing is to include the total subsidy for each class, which includes the NWAU – or national weighted activity unit – amount. For example, the graph below shows this inclusion for MMM1, which is a metropolitan provider.

Source: Research Analytics

As shown above, the price paid is more even across each class but it is still different.

The price per minute is uneven in both graphs.

When an analysis is conducted on the cost of care for each class the cost per minute is uniform, which begs the question – why are the prices paid per minute different across classes?

This is important is because once providers start being paid for the minutes they deliver, they will be receiving a different price for each class of resident when their cost of care for each class is the same. Pricing signals like this will then favour some classes of resident over others and therefore lead to people not receiving care because someone else will draw a better price.

While the pricing in each classification now appears to be headed in the right direction, the minutes allocated to each class do not align.

In my opinion this is because the minutes came from the aged care royal commission recommendations – rather than from empirical evidence. And somehow, the system is trying to make them fit into the classes and the number of people under these classes.

Now that funding will be tied to the minutes in the future – as announced in the government’s Mid-Year Economic Fiscal Outlook in December – it is even more important to get the minutes and funding correct.

Mark Sheldon-Stemm is principal at Research Analytics

Comment on the story below. Do you have an opinion to share about an issue or something topical in the aged care sector? Get in touch at editorial@australianageingagenda.com.au

Tags: AN-ACC, care minutes, funding, mark-sheldon-stemm, Research Analytics,

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