Sector abuzz as providers publish prices online

Providers and consumers have welcomed the publishing of pricing and accommodation information on My Aged Care as a new era of transparency for the sector but some have also highlighted improvements to be made.

The maximum accommodation costs for aged care facilities across the country have been published for the first time online in a major step forward for transparency in the sector.

So far three-quarters of residential aged care providers have provided information to the My Aged Care website on the maximum accommodation prices they will charge from 1 July, as well as an explanation of payment options and a description of key features for each type of accommodation.

The move, designed to empower consumer decision-making by facilitating an easy comparison of services, was legislated under the Living Longer, Living Better reforms.

The new information made available from this week includes information on room size and amenities and must also be published on the providers’ website and in any other materials given to prospective residents and their families.

Aged and Community Services Australia CEO Adjunct Professor John Kelly said the publication of accommodation pricing would benefit consumers with access to timely information and has allowed providers to focus on the presentation and marketing of their services.

However, Professor Kelly said the process has encountered some technical issues and ACSA has been working with Health Direct and the Department of Social Services to resolve these concerns.

Council on the Ageing Australia chief executive Ian Yates said the changes armed consumers with more information to make an informed decision and improved consumer protection by allowing older people and their families to check the fairness of prices against like competitors.

Reaction to prices

Aged care management consultant James Underwood said concern about a negative impact on occupancy rates, particularly following the introduction of asset testing for care fees from 1 July, has caused some providers to respond conservatively in the setting of maximum accommodation payments. “Of the accommodation charges I have reviewed so far, some would be considered priced a bit low,” he told Australian Ageing Agenda.

Mr Underwood said it was also a shortcoming of the My Aged Care website not to include the number of rooms available for each accommodation type. Further, he said the example of a combination payment using a 50:50 ratio was not a common scenario for consumers and therefore not helpful. “It would have been more sensible for organisations to show the example of their choice,” he said.

Mr Underwood said the small size of some of the rooms advertised on the site, including those in high care, was very surprising and would be noted by consumers doing their research.

Taking a different view, Fiona Somerville, a commercial director of Ideal Consultancy, said her initial analysis of a sample of the published data showed that providers appeared to be pushing up prices relative to previous years. She said this was because organisations did not want to be locked into a conservative upper limit.

However, she said this strategy should be used carefully as it could influence which door consumers knocked on first.

Overall, she said the new era of transparency and competition would force providers to improve the quality of their marketing and communications to consumers, which in the past has been very process rather than person-driven. “This is a call to action for organisations. As the first point of contact for consumers, there are great opportunities for providers to use the descriptions of services on My Aged Care smartly,” she said.

Elsewhere, there was speculation of a delay or backlog in the approval of prices above $550,000 from the Pricing Commissioner.

Rachel Lane, principal of Aged Care Gurus, said that in her search of facilities in her community in Melbourne, which she said would have rooms with a market value well above $550,000, she could find just one facility with a listed price above $550,000. “The rest just say ‘price pending approval’,” she said.

Occupancy rates needed

Echoing Mr Underwood’s comment about listing the number of rooms, Ms Lane suggested the site should include occupancy rates for each tier of room type. She said while consumers like the idea of a market price as it gives the impression of choice, the reality is that facilities are running at 90 per cent occupancy on average and “people are going to have the pay price attached to the bed that’s available on the day they need it.”

She said the idea that people can wait to move into aged care to get a cheaper price or get a better room for the same price was a fallacy. “It works that way when people are moving from their own home to, say, a retirement village, because the urgency with which they need to move doesn’t really exist. But when you need to move into aged care it’s normally a very quick move, and if you’re coming from a hospital it can be at whirlwind speed.”

Ms Lane suggested the vacancy rates within each tier of room be published, “because if the bed is not available to you on the day you need it, the price is irrelevant.”

Streamline the process 

Leading Age Services Australia (LASA) CEO Patrick Reid said while the publishing of accommodation pricing was an important feature in providing consumers with open and transparent information LASA held some concerns about an additional layer of red tape for providers.

“We understand this is a complex project but it is essential to provide a product consumers can readily access and understand but also ensure that processes are as streamlined as possible for providers avoiding red tape, something LASA has expressed concerns about.”