Above: Anne-Marie Archer, CEO of Leading Age Services Australia – WA.
By Stephen Easton and Yasmin Noone
The aged care industry has renewed its call to the Commonwealth for an independent ‘cost of care study’ to ensure the funding allocations match the real cost of providing a high standard of care.
At the heart of the matter is whether future aged care funding is based on an objective measure of what it costs to provide a reasonable or acceptable standard of care, or whether an amount of money is allocated in the budget first, before being stretched as far as it can.
The debate is complicated further by differences between building and staffing costs in different parts of Australia as well as differences between business models and levels of charitable donations in different parts of the sector.
The CEO of Leading Age Services Australia – WA, Anne-Marie Archer, said the gap between funding allocations and true care costs was widening every day and services would struggle to provide the care that would be needed in future.
Ms Archer said the situation in Western Australia was amplified by higher staffing costs and further compounded by increasing utility and operational costs.
“Whilst all of the industry’s expenses are going up – the [federal] Minister for Ageing has put changes in place to reduce funding dollars to deliver the same provision of care for residents entering care from 1 July 2012,” Ms Archer said.
“It is critical that the Commonwealth commits to an independent cost of care study to establish the true cost of care – as opposed to what the Commonwealth is willing to pay.”
She said the situation in WA was so critical that Leading Aged Services Australia (LASA) national CEO, Gerard Mansour, traveled to the state last week to speak with local providers and get a firsthand understanding of the situation, and how it could be addressed at a federal level.
Mr Mansour said he was concerned by the shortfall in future aged care infrastructure and service development in Western Australia.
With a shortfall of over 3000 aged care beds, based on federal government projections, and an uncertain commercial future for the industry, LASA has warned it is unlikely that WA will be equipped to accommodate the future demand for residential aged care.
“We have reviewed individual situations … and it does not bide well for the future provisions of care in Western Australia,” Mr Mansour said, referring to two case studies sent out with together with the statement.
“I have kept abreast of the WA hospital overcrowding and congestion and unless the Commonwealth undertakes an independent cost of care study and revises the care funding to realistic rates, Western Australians will become more dependant on the state services for their aged care.”
Mr Mansour said research recently commissioned by LASA from the Centre for International Economics predicted aged care facilities would face unrecoverable losses as a result of the recent changes and that this would further compound the issues for WA providers.
The National Aged Care Alliance (NACA), which represents the aged care industry as well as professional bodies, unions and seniors advocates, has called for a cost of care study for several years, and funding that reflects the true cost of care was a key theme running through the Productivity Commission’s reform recommendations in 2011.
Unions have long argued that a realistic assessment of the cost of care would include more staff on duty and higher wages, which would mean a substantial increase in government outlays, as staffing costs represent the biggest overhead for providers.