Aged care providers, unions, health professionals and consumer advocates have agreed on a new blueprint for further aged care reform that calls for the phased removal of the rationing of places across aged care and the move to individual funding in both community and residential care.

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The NACA blueprint, to be released today

The National Aged Care Alliance has endorsed the new blueprint, following months of discussions between its 46 member organisations. The blueprint is due to be published on the NACA website today.

The roadmap is in response to repeated statements from the government signalling its openness to some of the more ambitious proposals first outlined in the Productivity Commission in 2011.

As a first step, NACA is seeking cross-party support for the shift to a consumer-led and demand-driven system as recommended by the PC and a commitment from government to undertake a detailed analysis of the risks of removing the aged care provision ratios.

According to the blueprint, this analysis will need to consider how the removal of supply caps will be affected by demographic change; unmet need; consumer capacity to contribute; eligibility assessment; the mix of services available; the impact on demand of a reablement approach; and the effects of other policy measures, such as those relating to the age pension, assets and superannuation.

A major impediment to government support for lifting supply caps has been reliable evidence of  the fiscal risk to government of an uncapped system. However, My Aged Care will provide for the first time an accurate picture of unmet service need across the country.

Access to services in areas of market failure, regional, rural and remote areas and for marginalised communities will also need to be closely examined in the shift to a market-system, the blueprint said.

NACA said a cross-party commitment to lifting supply restrictions would reduce uncertainty in the sector and among investors and financiers, and give all stakeholders notice to prepare for such fundamental change.

Returning to another key recommendation of the Productivity Commission, NACA said it supported the integration of residential care, home care and home support into a single system based on funding following the consumer to facilitate greater choice and flexibility.

However, the blueprint noted that the continued use of block funding will need to be considered where an individual funding model does not work.

Government reform in this direction is already underway with the budget announcement that home care packages will be allocated directly to consumers from February 2017.  The Assistant Minister for Social Services Mitch Fifield has also signalled his support for attaching government subsidies to the consumer rather than the provider in residential care.

Revising aged care means testing

The blueprint also calls for changes to aged care means testing to include the full value of the home in the assets test, together with improved access to equity release products to unlock the value of those assets.

At present, special rules apply to the former home so that its value in the assets test is capped at $157,000. However, as Australian Ageing Agenda has reported both providers and consumer groups have described this arrangement of granting homeowners a different financial status as inequitable.

Ian Yates, the chief executive of COTA Australia and co-chair of the NACA group that developed the blueprint, said all assets should be treated equally in the means test for aged care and the government should facilitate the use of equity release products, as was recommended by the Productivity Commission.

“There needs to be better equity release schemes to be able to charge your aged care costs against your home,” he told AAA. “But the two go together. I don’t think you can include the value of the home in the means test if you don’t have a method for enabling people to bill their aged care costs against their estate,” he said.

Mr Yates said a scheme, which he likened to HECS in the university sector, could be government-backed rather than government-run as was suggested by the PC, but it could not be left entirely to the private sector to develop.

Despite consistent lobbying, Senator Fifield was yet to lend his support in this area.

Other areas of reform identified by NACA were in the areas of dementia care, integrated healthcare, and palliative and end-of-life care.

The blueprint advocated for a new dementia strategy which builds on the draft 2013-2017 National Framework for Action on Dementia and for the harmonisation of advance care planning laws to support older people at the end of life.

Parallel reforms were required in workforce planning and remuneration across the social services sector and in improving access to appropriate and affordable housing for older people, NACA said.

NACA blueprint at a glance:

The National Aged Care Alliance’s new reform agenda calls for:

  • The removal of aged care provision ratios once the risks to government, providers and consumers have been identified and mitigated
  • Consumers to have control of their subsidy to enable them to “enter and move between services and service providers at the time they choose”.
  • Reform of aged care means testing to include all assets and to treat assets equally based on their market value, as well as better access to equity release financial products
  • An integrated approach to workforce planning and remuneration across health, aged care, disability and community service sectors, including the design of a definitive workforce development strategy
  • Reviewing and reforming retirement incomes
  • Aligning the interfaces between aged, health, disability, palliative care and community services
  • Securing access to affordable assistive technologies, aids and equipment for older people
  • Systematic measures for the prevention and detection of elder abuse
  • Improving access to housing options for older people including age-friendly infrastructure and urban design

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