A prickly question

Industry members at an information night hosted by Gadens Lawyers last week were presented with an uncomfortable proposition.

Above: Arthur Koumoukelis

By Stephen Easton

Could uncapped supply and increased competition in the aged care market place the interests of community care providers at odds with the best interests of their clients?

This uncomfortable theoretical proposition was raised by aged care lawyer Arthur Koumoukelis, on behalf of some “people involved with the industry”, at an information night held at the Sydney offices of Gadens Lawyers last week.

During a presentation on the Productivity Commission (PC) report, Caring for Older Australians, Mr Koumoukelis told the audience that the idea had been raised during discussions with “some providers and advisors to the industry”, who had asked him to put a multi-faceted question to those attending the function:

“Is it in fact in the best interests of community service providers to keep people at home in order to receive ongoing subsidies, when in fact that person is probably best suited to be in a residential care facility?”

“How many providers have seen people coming out of community care and come into their facilities, who really should have been there a little while earlier? And how much of it is driven by the ability to continue to receive a subsidy?”

Later, Mr Koumoukelis said that he “saw a number of heads nodding” when he asked this question, but added that it was “not the whole room”.

“…If you’re opening up care and opening up supply and opening up the ability to receive the subsidies, what is going to be the stop-gap in relation to these kinds of behaviours [on the part of community care providers]?” he asked the audience.

Mr Koumoukelis emphasised that he was only relaying a concern raised by some aged care providers and “people involved in the industry”, in relation to the emphasis placed on community care by the PC, and the lack of any recommendations regarding a mechanism for ongoing re-assessment of care needs.

The proposition rests on the assumption that some individuals’ care needs cannot be fulfilled through community care, and that deregulation and increased competition could lead to a potential ‘moral hazard’ for community care operators – a situation where a person’s health is best served by moving into residential care, but an unscrupulous service provider is less than forthright in bringing this to their attention.

“I am putting the question back into a [hypothetical] regulatory framework,” Mr Koumoukelis said. “When you’re told by operators or providers or advisors to the industry that, ‘We receive people who probably should have come to us sooner’, because they’re malnourished [for example], you ask the question, ‘Was staying at home in fact the best care?’”

This theoretical potential was not, he stressed, an indictment of Australian community care providers, but simply an “interesting structural issue” that had arisen in discussions about how the aged care industry might work once supply controls were removed.

“There is no suggestion there are any providers who do not and would not act in the best interests of their customers. It is merely a structural question,” he added later.

Benevolent Society chief executive Barbara Squires, who was present at the event, said she found it very unlikely that community care providers would not act in the best interests of their clients.

“I find that hard to believe that any reputable community care provider would want to keep someone as a client just for the money. …I think it’s just a rather extraordinary suggestion,” Ms Squires said. 

But according to Mr Koumoukelis, the potential for immoral behaviour could not be underestimated.

“If you can accept the proposition that abuse [sometimes] occurs in residential aged care, and that inappropriate care is provided, then why not accept the proposition that this can happen in community care?”

Ms Squires said that later in the evening, she confirmed with Mr Koumoukelis that his unnamed industry contacts had not suggested anyone should be compelled to move into residential care against their wishes.

 “… [Arthur Koumoukelis and I] both agreed if the person is mentally competent to assess the situation themselves and decides they want to stay at home, even if the level of service their funding will pay for is lower, then it is absolutely their right to do so,” she said.

In part two of its aged care report, the PC addresses the need to limit the fiscal risk to current and future taxpayers from ‘Moral hazard and free riding in aged care’ (Box 7.7).  This refers to older people accessing subsidised services they want but don’t need – or the reverse – refusing services that would improve their health in the long term, but they do not want to access.

The report does not refer to a potential for moral hazard to arise on the part of community care providers.

Tags: arthur-koumoukelis, barbara-squires, benevolent-society, caring-for-older-australians, community-care, gadens-lawyers, pc, productivity-commission, reform, risk,

6 thoughts on “A prickly question

  1. The moral hazard is already occurring. Residential aged care operators have mentioned instances of supported living enironment operators “a new kind of aged care” bleeding their residents cash dry with in-apartment services until the point where there care needs dictate that they must advance to proper residential aged care with an approved provider. At this point, it is reported that these care recipients arrive at proper residential aged care service with much of their capital eroded! (The capital is eroded because the supported living apartment operator has deducted the cost of care and other services in the form of an exit fee).

  2. An interesting and important question – but it also assumes that someone CAN move into residential aged care at exactly the time when they first need it. We know there are waiting lists and capacity constraints on residential aged care. I’m sure the providers of residential care do see people who would benefit from coming into residential care sooner, but I wonder how many are able to offer a place to those people when they first needed it?

  3. The bigger risk might be from over committed residential care providers trying to convince older people, or their guilt-ridden families, that they need residential care when in fact they could enjoy a longer period of independent living within risk levels acceptable to them. I have heard many residential-only providers do just that even in the current protected (albeit somewhat lean) environment. On balance I think there is more likelihood of this that the risks Arthur cites.

  4. Whilst the prospect Arthur has raised may seem alien to many providers who always make the care of the older person the highest priority, I have in fact already seen this type of event occur, with consequent physical and emotional harm caused to the individual in the community care environment. The fact that ‘a number of heads nodded’ when this propsed was raised means that it would be sensible to identify this risk and put a sensible framework in place before there are significant cases of harm that result in over reactive and over protective frameworks.

    There is also the related point of ensuring that carers (partners and family) are not placed under subtle and overt pressure to continue to provide care in a community environment after the situation has ceased to be tenable for them. At present, there do not appear to be any formal assessment points that consider this likelihood and formally identify other options to carers.

  5. Do providers respond to financial incentives? Yes. But if there is likely to be an incentive under the PC’s recommendations, then it already exists for a provider to retain someone on an EACH package, for example. In my experience it is much more likely that an older person will be the one refusing to leave their own home because of a fear of change and dislike of residential care, than a case of community care providers encouraging them to stay unreasonably.

  6. Residential care providers that are accredited and offer great services should be given the opportunity to expand into offering community care packages within their catchment areas. Priority should be given to these providers so they are able to manage the care services offered to clients needs, and build the relationship on trust and consumer satisfaction in the event that transition is needed. I do not see the percieved problem from Arthur, but I do see its emergence if things ar not fixed.

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