Reforming aged care

AUSTRALIA’S aged-care sector has so many problems that it is difficult to know where reform should start.

Demand for aged-care places exceeds supply. Quality of accommodation is patchy and government oversight patchier still. The system lacks transparency and some badly constructed incentives lead to allegations of rorting by a handful of operators.

Inequities abound, with some less-well-off residents obliged to subsidise the care of others with much greater wealth.

Staffing is a critical issue. Pay is far too low, leading to a shortage of willing workers, and there are no legislated minimum staff-to-resident ratios to help ensure reasonable standards of care.

In the face of these daunting challenges, the federal government has announced a $3.7billion overhaul package.

While produced in response to a report issued last year by the Productivity Commission, the package does not incorporate the centrepiece of the commission’s recommendations – the use of family homes as de facto ATMs to fund aged-care accommodation.

This proposed market-based reform was likely to be too unpopular with voters and too open to the risk that the aged-care industry would simply drain equity from family homes without necessarily providing improvements of equivalent value.

Instead, the government plans to change the way people pay for residential care by permitting refundable lump-sum payments or periodic rent-like fees.

The troublesome division between high and low care will be removed, eliminating the temptation for providers to push residents into more profitable categories.

Lifetime cost cap

Importantly, the government is dramatically increasing the number of home care packages, partly funding this increase by a means test on recipients, requiring better-off recipients to pay towards their care

For residential clients who can’t pay for their care, the government will increase its daily subsidy.

Care costs will be capped at $25,000 a year and at no more than $60,000 over a lifetime.

No immediate steps have been announced to improve the staffing problems, but a task force will examine these issues, presumably with the intention of raising wages to attract and keep better staff in aged care.

Money has been allocated to boost transparency in the sector. This would be an extremely welcome development in an area plagued with allegations of substandard care that often prove difficult to investigate.

The single greatest complaint heard from residents of aged-care facilities and their families is alleged lack of compassion. Regrettably, it isn’t clear how legislative reform might reduce the volume of such complaints.

But if care providers are to be permitted to earn better remuneration, they should expect to be subject to greater accountability on a variety of measures including staffing, quality of physical facilities and provision of the quality of life services that many suggest are at present often lacking.

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