Almost 40 per cent of what older people receiving a home care package are spending is being eaten up by administration and case management fees, an investigation of budget expenditure shows.
The research, by a team from Flinders and Sydney University, involved 150 people in South Australia and NSW who were receiving community aged care services from not-for-profit providers.
It was undertaken in 2016 during the early stages of the transition to CDC to examine expenditure on community aged care services.
CDC entered Australia’s aged care sector following a federal government review in 2010 with the aim of supporting people to remain in their homes for longer by more closely aligning community aged care services to their needs.
The study found that on average, only 53 per cent of expenditure was allocated to care services, while 20 per cent went administration costs and 17 per cent to case management. The remainder when to other expenses and brokered services.
“It was evident that, regardless of the HCP level, administration and case co-ordination/care management fees accounted for a significant proportion of total expenditure: nearly 40 per cent for the total sample, 41 per cent for HCP level 1/2 and 38 per cent for level 3/4,” the study said.
The main drivers for expenditure on care were equipment, transport, home maintenance and supplies.
Researcher surprised by findings
Julie Ratcliffe, Professor of health economics at Flinders University said the “relatively high proportion” of HCP expenditure that went towards fees surprised her.
“I think there is an element of understanding that it would need to be a reasonable proportion in order for people to have high quality care co-ordination because you need quality coordination in the era of CDC and you need to pay the care coordinators,” she told Community Care Review.
“But I’m still not sure that you could really argue that it’s up to essentially half the package in fees.”
Professor Ratcliffe also said the research highlighted the need for standardisation of income and expenditure statements, which she says even the economists involved in the study struggled to understand.
“We had different aged care organisations and each organisation had a different way of reporting the data,” she said.
“So one of the big messages we took from that research was we really should be moving towards standardisation across the sector in the way we report these statements for consumers, so that they can actually understand them.”
The study was published in the Australasian Journal on Ageing in August and researchers say further research is needed to investigate the longer-term budgetary impacts of the transition to CDC.
Read the full report here.