A parliamentary committee will investigate the finances of aged care providers in response to a recently introduced federal bill calling for financial transparency.
The bill, which introduced on 19 October by Centre Alliance Member of Parliament Rebekha Sharkie, was referred to the Standing Committee on Health, Aged Care and Sport later that week but just announced this week.
If passed the Aged Care Legislation Amendment (Financial Transparency) Bill 2020 would require residential aged care providers to disclose income, spending on food, medication, staff, training, accommodation and administration and what they pay parent bodies.
Providers would also need to submit an annual financial transparency report to the quality regulator.
Ms Sharkie said the bill would provide transparency on aged care spending.
“This will enable families of loved ones, stakeholders and the public to have a clear view, for the first time, on the proportion of income that providers actually spend on costs of care and how much is just being pocketed or wasted,” said Ms Sharkie, who holds the South Australian seat of Mayo.
She said the bill would amend the Corporations Act 2001 to ensure residential aged care providers included detailed information in their annual financial statements.
“Unlike hospital and childcare centres, aged care facilities can employ as few staff as they like because there are no staff-to-resident ratios in nursing homes. We do not know how much they spend on staff, or what categories of staff they spend their money on,” Ms Sharkie said.
Organisations are transparent when they enable others to see and understand how they operate in an honest way, Ms Sharkie said.
“This must apply to the aged care sector; they should not be exempt in any way. This bill will ensure that goal is achieved,” she said.
The bill mirrors the legislation introduced by fellow Centre Alliance MP Stirling Griff in June last year, which is the subject of a Senate inquiry with final report due on 23 November.
The parliamentary committee has not set a date for public submissions yet.
Peaks support transparency, question proposed bill
Aged and Community Services Australia CEO Patricia Sparrow said transparency should underpin funding and financial arrangements in aged care.
“The aged care system can be complex, and it’s crucial residents and their families, and people needing to engage with the aged care sector can access meaningful and transparent information that can support important decisions and help build trust,” Ms Sparrow told AAA.
Counsel Assisting’s final submissions to the Royal Commission into Aged Care Quality and Safety provided a range of recommendations for transparency, she said.
“The commission’s final report will provide the ideal opportunity to address transparency once and for all,” Ms Sparrow said.
Leading Age Services Australia manager of policy and advocacy Tim Hicks said LASA supported transparency, but not all the propositions in the bill.
“Most of the proposed financial disclosures in the bill don’t seem helpful. People decide what to buy based on quality, not financial reports.
“Staffing hours we support in-principle because it can be a useful proxy, but we need to make sure we have the right risk-adjustments and don’t create perverse incentives,” he said.
It would be better to publish food satisfaction scores rather than on money spent on food, Mr Hicks said.
“For accommodation, existing pictures and data on room size and time are much more useful than accommodation spending,” he said.
The focus needs to remain on the right things, such as quality of life of residents, Mr Hicks said.
“We want a holistic report card that covers quality of life and key clinical indicators, adjusted for case-mix and other confounding factors,” he said.