Opinion: ACAR swings and roundabouts

The Government’s model of residential and community aged care planning is outmoded and playing around with figures won’t fix the problem, says ACSA CEO Patrick McClure, A0.

Above : ACSA CEO Patrick McClure, AO

Since 1985 the Australian Government has made new residential and community aged care places available via an annual Aged Care Approvals Round (ACAR). Introduced to balance the provision of services between geographical areas, differing levels of support and special needs groups, it was also a way for Government to control and predict its expenditure on aged care.

The planning process objectives are clear:
a) To provide an open and clear planning process; and
b) To identify community needs, particularly in respect of people with special
needs; and
c) To allocate places in a way that best meets the identified needs of the
community (Aged Care Act 1997, Section 12-2).

But does the Government’s planning process meet these objectives today?

Initially, using a ratio of 100 places per 1,000 people aged over 70 years, all allocations were for residential places. But over the past 20 years there has been a greater emphasis on community care in line with the expressed wishes of older people. The current planning target ratio is 113 places per 1,000 people aged 70 years or older, comprising of 88 residential places (44 high care/ 44 low care) and 25 community care places.

This system has been useful in introducing some equity in distribution of services but there have been increasing calls for changes to the model including the landmark Hogan report in 2004 and the Productivity Commission draft report.

There are problems in both the design and the application of the model.

The current ratio does not have an evidence base. There is no research suggesting that 113 is an appropriate number required to meet community needs. The arbitrary split between residential and community care is also without foundation when there is increasing evidence that older people would prefer to stay at home even when they require “high” care. The policy effectively restricts consumer choice.

The age of 70 as the benchmark is unrealistic when we consider the vast majority of people requiring both residential and community care are well into their 80s.

The design of the system is outmoded. The Productivity Commission draft report recommends a clear focus on the needs of consumers. In relation to ACAR this translates to removing regulatory restrictions on the number of residential bed licences and community care packages.

Industry and consumer concerns about the application of the ACAR have increased reaching new heights with this year’s round. Transparency as part of “an open and clear planning process” has not been achieved in recent years.

The Department of Health and Ageing (DoHA) uses demographic data, service provision and approval information plus the expertise of the state-based Aged Care Planning Approvals Committees (ACPACs) to estimate places. This allows providers to anticipate their growth, acquire land if necessary, and begin detailed planning to prepare their submissions. A mature and effective industry requires transparency and predictability and cannot operate efficiently when their livelihood is based on a lottery.

The 2009/10 round illustrated some of the dilemmas with Western Australia for example taking up only 314 beds of 1,564 on offer. The under-subscription of beds led to the Department allocating additional packages but providers had only applied for packages on the basis of the original number.   In NSW a shortfall in licences led to packages being allocated to regions where the Department said none were available.

The 2010/11 round is proving to be just as contentious. Providers rely on the indicative allocation figures, accepting there will be small variations between the indicative and actual figures. However it is impossible to explain this year’s scenario:
• Western Australia was expecting 2,398 beds and 87 packages. Instead 1,500 beds and 279 packages were offered – an unexplained variation that will further compound the bed undersupply.
• Tasmania was expecting 373 beds and 23 packages. The reality was 646 beds and no packages. Providers had made it clear to the ACPAC and DoHA that the demand was for packages.

This cannot be considered a rational and transparent model.

The confusion and frustration of the recent ACAR processes underscores the critical need for reform of the aged care sector. Members are not applying for new residential beds because they do not believe that the current funding system will produce sustainable services. Playing around with figures from year to year will not fix the problem. Until the funding issues are fixed the results of the allocation rounds will remain the same and it is the consumers who will be the losers.

We support the Productivity Commission’s recommendation for the progressive relaxation and eventual removal of supply-side limits on bed licences, packages and other services to help correct the mismatch between what is offered and what older people want.

Tags: acsa, aged, aged-care, aged-care-approval-round-acar, aged-care-planning-approvals-committees-acpacs, ageing, department-of-health-and-ageing-doha, patrick-mcclure,

4 thoughts on “Opinion: ACAR swings and roundabouts

  1. Well written Patrick, ACAR has presented as a complete shemozzle over recent years with little rationale behind it.
    Where is the evidence to support the allocations offered?
    Where is the support to ensure that residential care places are provided where there are shortages such as in WA where the problem is continuing to worsen?

  2. Yes it may well be that the paradigm of the mid 1980s has played itself out and that the PC, and before them Hogan, are on the right track when the advocate demand driven formulae rather than supply control ratios. Does the Govt have the will? Does the industry have the stomach? I guess we’ll all find out soon enough.

  3. It appears this is the last ACAR round with outdated formulas and processes and it is designed to add another reason for an aged care reform budget next year. If not, I cannot see how the broken model will be helped by compounding the error with this year’s round.
    Whilst we all want less restrictions so we can be more responsive to need, many regional providers in the non profit sector will need a transition phase to adjust to market based capital expansion without the controls and caps in ACARs and the security of guarantees in provisional allocations.

  4. The article is Well written.For years now we have applied for CACP’s and EACH and EACH-D without success in each ACAR for 10 years. Countless Dollars have been put into paying staff and consultants to put together an application process which represents a lottery process or an essay competition. Whoever has the best essay wins the prize, instead distributing packages and beds on merit process and to thoses providers who wish to provide and excellent service to age care people regardless of SIZE. The government I am sure does not undertsand how age care works and it certainly does not realise that it needs suffient funds to keep people in residential care and people in their homes where they want to be. With the negativity that the government shows to the age care industtry it will be only a matter of time when a crisis occur. Who will the crisis affect? services to the age care person of course. It is only due to prudent operators and a industry bodies that offer excellent advice that not more providers have gone to the wall which inturn affect services to aged persons. let us hope that the government will keep an open mind to the PC so the industry can move forward into the future with the services being offerrde to our age person formost in mind.

Leave a Reply

Your email address will not be published. Required fields are marked *