No answers from DoHA on industry viability

Victorian aged care providers had an early chance to quiz a senior public servant on the aged care reform package. But on the question of how the reforms will help providers stay in the black, he had little to tell them.

Above: Sanda Hills, CEO of Benetas.

By Stephen Easton

Over 300 Victorian aged care providers gathered in Melbourne last week to hear more detail on the government’s aged care reform package, and put their questions to a key departmental bureaucrat.

Keith Tracey-Patte, assistant secretary of the policy and evaluation branch within the aged care division of the Department of Health and Ageing (DoHA), provided members of Aged and Community Care Victoria (ACCV) with an overview of the reform package.

Mr Tracey-Patte also participated in an “animated” question and answer session, providing as much detail as possible at such an early stage, but was largely unable to allay the sector’s biggest fears. 

Gerard Mansour, CEO of ACCV and the nascent national peak body, Leading Age Services Australia (LASA), said in a statement following the briefing that more consultation with the government was needed, to “ensure the industry, including residential aged care homes, will thrive under the proposed reform”.

ACCV members are concerned the reform package does not do enough to ensure the ongoing financial viability of aged care provision – particularly in light of a proposed five-year, $1.6 billion ACFI clawback, without a study into the true cost of providing aged care.

Uncertainty also remained after the briefing around how the proposed Aged Care Financing Authority (ACFA) will function.

Sandra Hills, CEO of Benetas, said there was “a lot of concern” expressed about exactly how the ACFA will determine the cost of providing aged care, which varies in different areas and is currently based on care needs assessed by providers.

“Certainly [Mr Tracey-Patte] was able to explain the government still had a list of priorities, like flexibility and choice for consumers,” Ms Hills said. “But still, one of the objectives of the reform was focused on the [financial] sustainability of the sector, and that’s what people were questioning – is this really a sustainable package?”

“People were concerned about capital, and why it’s going to take two years to implement most things.”

She said that increasing the ‘cooling off period’ for new residents was an issue for some ACCV members but would have little effect on Benetas’ operations.

Neither would measures to increase transparency, prevent ‘superbonds’ and make providers offer an equivalent periodic payment option, she added.

Ms Hills said the DoHA representative laid out the government’s position plainly and honestly, acknowledging that the reforms clearly did not mirror all of the Productivity Commission’s recommendations, and were also designed as a package that would “get over the line” and manage the twin risks of a budget blow-out and a voter backlash.

“They’re obviously trying to manage a whole range of factions in the industry and the community, like unions and the people who are worried about a ‘fire sale’ of the family home’.”

Kevin Bertram, CEO of Shepparton Retirement Villages, said Mr Tracey-Patte did provide a lot of detail where possible, and was “totally honest and upfront” about areas where policy details were still being hammered out, promising to provide answers to some questions as policy develops.

Mr Bertram said a lot of the reform package was very good from his perspective – including its focus on care in the home, people with dementia and consumer choice – but was still concerned that “if the government encourages people to pay by periodic payment, rather than lump sum bonds, that could hurt quite dramatically”.

He supported specific funding for wages through a ‘workforce compact’, which would help improve care quality but do little for providers’ precarious financial positions. No further detail of the workforce compact emerged from the briefing, he said.

The $1.6 billion reduction in ACFI outlays over five years would “hurt the industry from a viability perspective”, Mr Bertram said, particularly as occupancy was already declining in residential care, and could decline further as home care continues to grow.

“1.6 billion dollars over five years, over about 200,000 beds Australia-wide, is about $8,000 a bed that going to be clawed back. That’s mammoth.

“There’s very little new money; it’s robbing Peter to pay Paul – but the Peter they’re robbing is not rich. There’s about 2,500 providers Australia wide, and they’re not all in there making huge money.”

Another major source of uncertainty for the industry, he added, was the issue of which political party would be in government after the next election.

“The Coalition been quite silent on many of these issues, so we don’t know how they’re going to manage the additional demand, and the reducing workforce; that’s a big unknown.”

Anyone attending the ACS NSW & ACT State Conference will get their chance to ask questions about the reform package in a 30-minute ‘Q and A’ session with the Minister for Ageing, Mark Butler, this Thursday at Australian Technology Park, Sydney. Questions must be emailed in advance to elizabethp@agedservices.asn.au by midday on Wednesday to be selected.

Tags: accv, benetas, doha, gerard-mansour, lasa, living-longer-living-better, productivity-commission, reform, victoria,

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