Aged Care Royal Commission: What You Need To Know

Last year the Royal Commission into Aged Care was all anyone in Aged Care was talking about. Unfortunately, Covid-19 has indeed overtaken the Royal Commission as the topic de jour. To keep you up to date with what is happening in the Aged Care Royal Commission (and keep you informed as the fountain of Aged Care knowledge among your family and friends) you’ll receive a regular update on the happenings in the RC world via this blog, produced by the HCA Learning Team.

Many insights into financing and sustainability of future improvements so desperately needed in the aged care system have been brought forward, but with terrific ideas come terrific costs. Any models put forward to produce a change in the Aged Care System need to be funded, delivered and regulated in a manner that works now, yet is viable for the future challenges placed on providers in the future as our demographics shift.

Perhaps the most notable witness of this current hearing was former Prime Minister Paul Keating. His concept of aged care costs being met by a HECS-style funding model, where every Australian is extended a loan to pay for their care with that debt recovered from superannuation or property in their estate, has undoubtedly been the most publicised in the popular media.

Mr Keating was not the only witness who has suggested that user pay is the only way we can manage an increase in demand for services. There is frustration from providers that funding for services offered have not been subjected to inflationary considerations and have random freezes or cuts placed at often short notice. As Nick Mersiades, Director of Aged Care of Catholic Health Australia succinctly stated:” funding that’s being provided is not keeping up with costs. Essentially it’s predicated on an indexation formula which is based on a labour productivity expectation which is not sustainable”. Essentially, this suggests if an aged person were receiving a care package five years ago and the care requirements had not changed, they would be receiving reduced care or services. This predicament is emphasised if there is no competition between providers, as is the case in many rural and regional centres.

In addition to user-pays, continuum is perhaps the other keyword for this hearing. Mike Callaghan, former Chair of the Aged Care Financing Authority and Chair of the Australian Grants Commission, says services should not necessarily be provided at a single age. For example, an individual who can afford to pay for the services of a gardener and a cleaner in the home, should not automatically be financially assisted to pay for those services upon reaching a set age. Likewise, contributions to Aged Care, according to many witnesses, should be proportionate to capacity to pay- the user pays continuum. There is no doubt that equitable co-contribution itself has monumental challenges- antiavoidance strategies and joint estates will require much thought and likely bipartisan debate.

One of the intriguing concepts and future opportunities for Aged Care providers was raised on the day where the Big 4 Banks appeared, discussing the exorbitant costs of bed licenses, the massive borrowings of Aged Care Providers and the shift of preference towards home care. Even before COVID-19, Aged Care was moving away from a Residential Care preference to Home Care inclination, but the pandemic has given momentum to this shift. As more Aged Australians choose to stay in their home or receive partial support in independent living facilities if required, the opinions seem to be agreed- opportunities for business in the future rests in Independent living facilities.

The Royal Commission’s Final Report is due to be complete in February. How one Royal Commission will solve all the issues of Aged Care remains to be seen.

Did you know: Healthcare Australia’s Online Learning Platform (LMS) has 80+ aged care courses that can be accessed on any device, anywhere and any time? Click below to learn more.