Release of ACFI review is imminent

The government is preparing to release the highly-anticipated review into alternatives to the Aged Care Funding Instrument.

A report by the University of Wollongong into alternatives to the troubled ACFI was handed to the Department of Health in early February.

Dr Nick Hartland, first assistant secretary aged care policy and regulation division, told a sector conference in Sydney yesterday that Minister for Aged Care Ken Wyatt had considered the report and was about to release it.

Last month Australian Ageing Agenda reported that Minister Wyatt was planning to undertake further consultation with the sector ahead of making a decision on a future funding model for the sector (read story here).

Speaking at Aged Care Business Model Innovation conference yesterday Dr Hartland said ACFI was not “off the table” as an option, and the department had commissioned further independent work to refine the tool.

However, Dr Hartland warned that if ACFI was retained as the sector’s funding mechanism it would likely require “ongoing change”.

“If you’re voting for ACFI you’re voting for us to continue to have a dialogue with you about how to continually refine the tool. I can’t see it that we would ever set and forget it,” he told the event hosted by Council on the Ageing Australia and Criterion.

Dr Hartland confirmed that the alternatives to ACFI outlined in the university’s report included a system of funding levels, similar to the approach in home care packages, as well as activity-based funding as operates in the hospital system.

Who does assessment?

Asked about the flagged changes to who conducts assessment of residents’ needs for funding purposes, Dr Hartland said that assessment ultimately depended on the funding model chosen for the sector.

Pat Sparrow, chief executive of Aged and Community Services Australia, said aged care providers had very mixed views on changing assessment arrangements.

“But one thing that is clear is that if there is external assessment, and government effectively sets the level of funding they’re going to provide, then there would be no need for validation.

“We need to have the discussion not just about whether it’s good or bad but about what the trade-offs in the system might be,” said Ms Sparrow.

Part of broader funding discussion

Several of the sector leaders at the conference argued that the decision on the funding tool should be taken in the broader context of addressing long-term funding for the sector – including measures to ensure the viability of rural and remote services and increasing the share of funding from consumers.

Cameron O’Reilly, head of the Aged Care Guild, said his concern was that changing ACFI would be an “extremely complex disruptive process” for the sector.

“I don’t want the whole focus of industry to be on changing the tool rather than focusing on the broader funding picture going forward.

“If you want to simplify the funding tool that’s fine, but don’t avoid the bigger discussion about funding,” Mr O’Reilly said.

Similarly, Ian Yates, chief executive of COTA, said the sector couldn’t focus on ACFI or an alternative without addressing the broader issues impacting the funding of the sector.

Increasing user pays

One of those key issues was increasing user pays in aged care, and there was broad agreement on the need for consumers to pay a greater share towards the cost of their care.

Nick Mersiades, director of aged care at Catholic Health Australia, said it was clear that to get more money into the sector the government would have to look at people’s capacity to contribute more to their care costs.

He cited several statistics that illustrated greater consumer contributions wouldn’t come from income sources and government should be looking at the equity in people’s homes.

“The challenge in terms of future financing is very much around equity release and finding a sensible way around that,” he said.

Mr Mersiades also criticised the “enormous inconsistencies” in consumer contributions across home care, home support and residential care, “which is inequitable and very confusing for people.”

Likewise, Mr Yates said current user contributions and fee structures should be reformed, and consumers needed a clear statement outlining their care needs, how those needs translate into a cost and what government is going to contribute.

“We need to develop a more sophisticated, widely available and competitively priced equity release market which could be an important part of financing later life care and support needs,” Mr Yates said.

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