Aged care reform hangs in the balance

Aged care reform getting up in this year’s budget is far from a sure thing, ACAA’s CEO has warned. The uncomfortable reality is that aged care’s once-in-a-generation reform package is in a competition for funding that will go right to the line.

Aged Care Association Australia CEO, Rod Young, who plans to resign this year, but not retire.

By Stephen Easton

The sweeping aged care reform package developed by the Productivity Commission (PC) is politically risky, faces stiff competition for funding and may not be implemented this year, according to Aged Care Association Australia (ACAA) chief executive, Rod Young.

Speaking at a forum in Sydney on possible financial consequences of the proposed reforms, Mr Young presented the political reality that despite the support of service providers, employees, health professionals and consumers alike, 2012 may not be ‘the aged care reform budget’ after all.

“Much as I would like it to be like this bird having a perfect landing, really I’m not confident that we’re going to get across the line,” Mr Young said. “I think there’s a real necessity for as many of us who can, over the next six weeks or so, to actually continue to tell government that this is a major reform that needs to happen.

“It’s a precarious position. The reform agenda, as you know, introduced a number of issues that have a degree of political risk attached to them. …We are at the mercy of something called a surplus for the next budget, and in that context there is nothing, I wouldn’t think, that this government will hold at a higher priority than returning a surplus in the 2012-13 budget.”

Mr Young went on to detail several other government priorities that would compete with aged care reform, including the National Disability Insurance Scheme and a possible response to the 2008 Bradley review of higher education.

The forum’s facilitator, Sue Macri, who was an associate commissioner on the PC’s aged care inquiry, said the aged care reform package had been deliberately designed by herself and the other commissioners, Robert Fitzgerald and Mike Woods, to be implemented in full.

Ms Macri expressed the view that the government might attempt to cherry-pick some measures from the report in order to avoid political risk and maximise its chances of being reelected, rather than make decisions in the best interests of the aged care sector.

Mr Young voiced a similar concern in his presentation, particularly in relation to the establishment of an aged care ‘gateway’ system, which he described as an “absolutely crucial” part of the reform package.

“If the gateways get poorly resourced, poorly structured and poorly integrated with the rest of the aged care and health systems, then much of this would be a failure,” he told forum participants. 

“At the same time, if government wanted to, they could simply introduce the gateways, and nothing else. … That would be an unsatisfactory outcome for us, as providers, because I think it would be seen very much as an opportunity lost.”

While some participants in the forum later described the presentation as pessimistic, Mr Young said he was simply attempting to project some possibilities of what the government could do “in the context of a very tight fiscal environment”.

The ACAA CEO, who plans to step down from his post later this year and pursue other roles around the sector, also warned of resistance to changing from the current system, which limits the cost of aged care through the allocation of bed licenses and community care packages, to one based on universal entitlement according to assessed need.

“Entitlement; I’m not sure everybody’s actually grasping what that means. But more than the gateway, more than licenses, more than the capital reforms, this is the fundamental issue that will probably kill us, or save us, as far as movement in this budget goes,” Mr Young said.

“The fundamental design of this scheme is that if you go to a gateway and are assessed as needing services, you’ll get them. … The Commonwealth struggles with Medicare all the time and how it meets its costs, because it cannot control the number of services that are rendered, and therefore the outlays that are associated with Medicare. 

“The boffins at Treasury will almost certainly be arguing that that fiscal risk, particularly in an environment where the Commonwealth is trying to balance its books and bring them into surplus, is too great a risk to be taking.”

The forum, on the impact of the PC’s recommendations on aged care funding and finance, also featured presentations by Bruce Bailey, managing director and director of aged care services at Guild Accountants, which hosted the forum, as well as Kevin Griffiths and David Dixon Hughes from Westpac.

Sue Macri is also on the board of Guild Accountants, which was recently acquired by the RSM Bird Cameron group of companies.

BREAKING NEWS Wednesday, 21 March (Corrected, Thursday 22 March): COTA Australia’s director of aged care reform engagement, Pat Sparrow, has told the Aged Care Queensland State Conference that whether an aged care reform package of some kind is included in this year’s budget is still uncertain. Ms Sparrow also said that whether or not the sector’s much-anticipated reforms do make it into the budget depends on continued lobbying pressure.

Tags: acaa, budget-2012, caring-for-older-australians, productivity-commission, reform, rod-young,

3 thoughts on “Aged care reform hangs in the balance

  1. The aged care industry does not drive a hard bargain with government. We have been too conciliatory,and this attitude must change. We have a minority labour government meaning pressure must be applied to the independents. The outcomes sought are that Government must remove the distinction between High Care and low care in classification of all new residents from July 1. There is no good reason to retain it. Significant respources would be saved by government in accommodation charges, if those people that had the means paid a bond.
    Furthermore the disbanding of all ACAS teams would save significant amounts, if Doctors or Discharge planners could admit residents to aged care facilities. If doctors are responsible enough to admit to hospitals why not aged care facilities ?

  2. Graham is correct – we have argued for years that there is no reason why a GP should not be the “gateway” to aged care services. DH&A seems to take the view that somehow doctors can’t be trusted to make such a determination, or maybe it is simply that their “command and control” DNA gets in the way of streamlining, improvement and real reform. They know that they can’t control doctors the way they do aged care providers – they simply wouldn’t dare! The Australian Government needs to set the reform path in motion this year. Further procrastination means that the age tsunami will hit our economy and it will be defenseless because planning just does not exist. It is time for strong and consistent messaging not just leading to the budget which is already set, but carried through to the next election – it’s not that far off. Our industry and those we serve need strong and effective leadership – now more than ever – supported by a vocal industry with presence in all electorates. There seems to be a view that “someone will do something some day” – well guess what? That someone is every one of us in our industry – and today is that day! It’s time…..

  3. There is no reason why any suitable organisation could not be an aged care ‘gateway’ and assess the aged for access to services. The challenge would be to maintain this as a free service to the aged person seeking assessment. Whatever format the assessment takes will involve having people with appropriate training. I’m not sure I can see a GP charging $60 a visit wanting to spend their time assessing the aged. Its a very time consuming process. So they will hire someone else, probably an ex-ACAS assessor. Who will pay for that person? If it isn’t the aged person seeking assessment then it must be paid by the government. Where are the savings?

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