The Aged Care Approvals Round for home care packages will be abolished with funding to be allocated directly to consumers rather than providers from February 2017, the Federal Government announced in Tuesday’s Budget, paving the way for a significant shake-up of the home care sector.
The budget measure, costing $73.7 million over four years, advances the government’s plans for a more market-based, consumer-driven aged care system, first flagged in Assistant Minister for Social Services’ landmark CEDA speech in November last year.
The government also confirmed it will work to consolidate the Home Care Packages program and the Commonwealth Home Support Program into a single home care system from July 2018.
While consumers will have greater choice and flexibility to direct their package to their preferred approved provider, planning ratios will continue, capping the overall supply of packages available.
NDIS-style individualised budgets will also be paid to chosen providers rather than “cashed out” to consumers as is an option in consumer directed models overseas, such as in the UK.
The changes will present a significant challenge to the business models of providers through the end of ACAR and the transition to a more competitive market.
Under the changes, the My Aged Care Gateway will be responsible for prioritising clients’ access to packages at the regional level and it will receive $19.9 million over two years in capital funding to enhance its functionality.
Senator Fifield said the move to open up competition in the home care sector will lead to enhanced quality, innovation and service delivery.
“Packages will be portable, allowing consumers to change their service provider, including where the consumer moves to another location,” he said.
Ian Yates, chief executive of Council on the Ageing (COTA), welcomed the home care changes and said giving funding directly to the person in need of support will create a more responsive and efficient system.
“It will also drive up the quality of service provision as older people will be able to shop around for the best provider to meet their particular needs and will be able to move from one provider to another if they are not satisfied with the service being provided,” he said.
However, Mr Yates said it was disappointing that older people will have to wait until 2017 for the changes to kick-in and the reform should happen sooner.
“We also wanted to see a timetable for the government to move residential care to this model and we hope that will happen soon,” he said.
Catholic Health Australia said while this measure was a welcome development in the staging of reform, it continued to advocate for the removal of service rationing for all aged care services.
Stopping reform at this point would continue inequitable access to services where demand exceeds the number of packages available through the regional planning ratio, the peak body said.
Hal Kendig, Professor of Ageing and Public Policy at the ANU Centre for Research in Ageing, Health and Wellbeing, said it was encouraging to see the government moving ahead with a consumer directed home care system.
“This shift in power relationships is fundamental to a more open market that should work towards more choice, control, innovation, and quality of care,” he said.
“However, resources remain heavily constrained and CDC implementation will require careful monitoring, especially with the trend towards older people having to meet more of the costs themselves.”
Regarding the transition to a single home care system, few details were released with the Federal Government only saying it would consult with stakeholders on potential program and funding options, as well as options for implementation and transition.
Currently, the CHSP is block funded, while home care packages are funded through individual budgets.