Home care potential for retirement village sector

Retirement living and aged care consultant James Underwood at LASA National Congress 2013

By Natasha Egan

The ideal place to deliver home care is in a retirement village rather than the family home, according to leading consultant for the retirement living and aged care sectors James Underwood.

Mr Underwood, who is director of James Underwood and Associates, was speaking at the Leading Age Services Australia National Congress 2013 in Sydney on Monday. 

He told delegates there would be increasing opportunities for funded and unfunded home care provision in retirement villages following the introduction of consumer directed care (CDC) with its preferred provider methodology and changes to co-payments for residential and home care packages. 

“The best place for care to be delivered is often not at home. The best place for home care to be delivered is in a retirement village, serviced apartment, assisted living cottage or other congregate living environment,†Mr Underwood said.

As the number of home care packages increases from 60,000 to 110,000, they are going to end up substantially being delivered in the retirement village sector, he said.

Some people currently living in a retirement village, assisted living facility or congregate living environment will already be accessing care through local home care providers, which up to this point have mainly been religious and charitable organisations, Mr Underwood said.

While larger organisations have generally wished to use their own staff, under preferred provider methodology, which is all the way through CDC approaches, a retirement village resident will be able to tell their home care provider they want their cleaning, transportation and daily living services to be carried out by the village staff they see delivering services to their neighbours, he said.

The home care provider will then have to decide whether to accept the retirement village people to provide the assistance under a sub-contracting arrangement. 

“I can see it almost impossible to think of retirement villages that are co-located with nursing homes and operated by approved providers under the Aged Care Act being unable to be acceptable as preferred providers of sub-contracted assistance under home care packages from external organisations,†Mr Underwood said.

As soon as two or three years down the track, Mr Underwood said he envisaged the main source of assisted living assistance in retirement villages will be performed by retirement village staff sub-contracted at appropriate rates from the approved home care providers. 

And when it happens, it will result in a lot of interesting things, such as night staff and weekend staff and other assistance, all coming through retirement village staff that already provides that assistance in the village, he said.

Rise in residential care fees could make retirement villages more attractive

Another potential opportunity for retirement villages results from the rise in residential care fees, according to Mr Underwood.

Under the new rules around co-payments the government subsidy won’t kick in until the residential aged care recipient has reached the maximum payment threshold. 

“Under the new system for a new person entering residential care after 1 July next year, when the government assesses a person and finds that the person will pay $9000 a year, they have to pay the whole lot before they get one cent of subsidy.â€

If their care fee is $200 a day, their co-payment is $6000 in the first month, $3000 in the second month and nothing after that until the anniversary date of their admission the following year when they co-payments will start again, he told the audience.

“This is a way for government to get more of the co-payment and pay less of the subsidy.â€

If retirement village residents accessing home care went back to the operator and asked what they could get for an extra $200 a day, they would likely find they could get quite a bit of help, he said.

Unlike residential care, home care recipients will not be expected to pay the full annual entitlement from the start.

“In home care, if the co-payment was $25 a day, it would simply be $25 a day for 12 months,” Mr Underwood said.

“Home care would have a real marketing advantage over our residential care people.”

Home care not an attractive option for self-funded retirees

While the co-payment is averaged out over the year in home care provision, the increase in home care fees is also significant, Mr Underwood told delegates.

“I cannot imagine self-funded retiree ever taking up a level 1 or level 2 package. I can’t imagine many part-pensioners at the upper end taking up too many level 1 or level 2 packages.

“And I can’t see many self-funded retirees taking up level 3 package assistance because the co-payment is so high.â€

Again this could be an opportunity for care provision within retirement villages with fee-for-service arrangements for those self-funded retirees searching for a way to meet their care needs, Mr Underwood told delegates.

Fee-for-service arrangements haven’t worked out very well in retirement living environments in the past where they have only modestly been taken up, he said.

“But in the future, if otherwise having to pay a very large co-payment for only a few hours of assistance then a fee-for-service arrangement or an unfunded home care arrangement particularly within retirement living activities is likely to me much more successful than we’ve seen in the past.â€

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