RC provides alternative pathways

The government will need clear objectives and principles to base its response to the royal commission on or risk criticism, a health economist says.

The government will have to base its choice of royal commission recommendations on clearly established principles and objectives to avoid criticism, a  health economist and former deputy chair of the productive commission says.

In their final report released on Monday, Royal Commissioners Tony Pagone and Lynelle Briggs conclude the aged care system needs “a thorough systemic redesign” to sufficiently improve it after reaching “crisis point” following a prolonged period under stress.

They make 148 recommendations for a new system of high quality care, but not all are supported by both commissioners.

The commissioners call for a system based on the protection and promotion of the rights of aged care recipients with those rights enshrined in legislation to leave no doubt about their importance and a statutory duty on providers to deliver safe and high quality care. They want a Medicare style guaranteed universal access to the care and supports an older person is assessed as needing.

“We envisage a system … that ensures that all older people can, without prejudice, receive high quality care in a safe and caring environment. A system that protects older people from mistreatment and neglect, and that protects them from harm,” Mr Pagone wrote.

At the system’s centre is a new aged care program that puts much greater emphasis on care at home, and buildings that resemble people’s homes in residential care. It aims to simplify the current system, and as expected, combines all residential and home aged care, support and respite programs into one with five categories and common eligibility criteria and assessment process.

The commissioners have recommended new and robust governance arrangements including new institutions to drive improvements. Mr Pagone follows Counsel Assisting’s final hearing submissions and recommends an independent commission model but Ms Briggs recommends a government leadership model, also foreshadowed at the final hearing.

“There is, in my view, little point in repeating the same process again by asking the same Department that has overseen the current failings to build and run the new aged care system.”

Royal Commissioner Tony Pagone

Similarly, they have different views on financing the new system from taxpayers with Mr Pagone calling for a hypothecated levy, which means the funds can only be used for this specific purpose, and Ms Briggs recommending an aged care improvement levy , which is non-hypothecated like the Medicare Levy, and changes to means testing.

Professor Michael Woods from the Centre for Health Economics Research and Evaluation at University of Technology Sydney said the government has to clearly establish what principles and objectives it wants from the system and be transparent about them.

Professor Michael Woods

It then needs to clearly use those principles to justify which model or variation it chooses, said Professor Woods, who led the Productivity Commission’s Caring for Older Australians inquiry a decade ago.

“There is a pathway for government to avoid criticism, but only if it takes that first step.”

Professor Michael Woods

“But until it commits to a set of very clear principles or objectives, it’s going to be accused of cherry picking things,” Professor Woods told Australian Ageing Agenda.

“The way to avoid that is be very up front and clear this is what we are committed to delivering in terms of principles and therefore on that basis, we choose the following bits of what.

“There is a pathway for government to avoid criticism, but only if it takes that first step,” Professor Woods said.

Two system regulation options

While the commissioners have proposed different regulatory models, the similarities include a strong regional presence and planning role and active intervention in the market to ensure high quality care and stronger accountability through an inspector general of aged care.

Mr Pagone’s model recommends a new and independent authority, the Australian Aged Care Commission, responsible for the system governor, quality regulator and prudential regulator plus an independent pricing authority from July 2023. A specialist commission could give undivided attention, he said.

“There is, in my view, little point in repeating the same process again by asking the same Department that has overseen the current failings to build and run the new aged care system,” Mr Pagone said.

However, Ms Briggs wants to reform existing institutions to deliver reforms more quickly and effectively under the government leadership model that supports greater independence of regulation and pricing but maintains government leadership.

Under her model, the revamped Department of Health and Aged Care would be the system governor and prudential regulator. She proposes a separate and new quality regulator launching in July 2022 and adding the pricing role to the hospital authority to create the Independent Hospital and Aged Care Pricing Authority from July 2021.

The government must step up and embrace its responsibilities for aged care including to lead and manage its delivery, and fund the system at a level sufficient to provide high quality and safe aged care, she wrote.

The commissioners agree that the pricing authority should determine prices but Mr Pagone considers the determination should be binding whereas Ms Briggs states the government should be able to override  via a transaprent parliamentary motion.

Both agree on the need for the pricing authority to require providers to participate in cost data reviews by July 2022 and all activities from the following year.

Supportings parts, not the whole

Professor Woods said he agreed with each model in part. Mr Pagone’s “aged care commission is a good idea to bring that discipline, transparency and accountability into the system” but “I fundamentally disagree that a separate pricing agency can actually commit to public expenditure,” he said.

The government needs to have the power to make decisions across the complete range of its responsibilities, Professor Woods said.

“I agree with an independent pricing authority provided it can openly and objectively assess the price and recommend to government and government must transparently respond.”

Cam Ansell

In their response to the report, Ansell Strategic managing director Cam Ansell and director Amber Cartwright favoured Commissioner Briggs on balance because of the substantial lead time and cost for implementing a new entity,.

However they do not support Commissioner Briggs’ provision for parliament to disallow pricing determined by the pricing authority.

“We are concerned that such powers undermine the integrity of an independent authority and leave the system susceptible to the same budget interventions that ultimately lead to the royal commission.”

Main image: Aged care royal commissioners Tony Pagone and Lynelle Briggs

Continue to follow us here and see the forthcoming edition of Australian Ageing Agenda magazine for our in-depth reporting on the royal commission’s final report and recommendations.

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