Please sir, we’d like some more

Good in principle but more detail needed is the message from the recent ‘two Julies’ PC roadshow.

The two Julies‘ – Julie Hough, left and Julie McStay at the Sydney forum

By Keryn Curtis

More details, greater clarity, assumptions explained.  This is what aged care providers would like from the Productivity Commission (PC) in order to properly respond to the recommendations in its report, Caring for Older Australians.    

The views were expressed fairly consistently across three forums held jointly this month by Aged Care Association Australia (ACAA), Hynes Lawyers and PKF Chartered Accountants and Business Advisors.  To inform the response they are developing ‘on behalf of the aged care industry’ to the PC report, the three partners, together with Aged Care Queensland, ACAA-NSW and Aged and Community Care Victoria, presented an overview of the key recommendations to almost 300 providers and industry stakeholders in the eastern capitals of Brisbane, Sydney and Melbourne.

The presentations and discussions were led by aged care lawyer, Julie McStay of Hynes Lawyers and PKF partner, Julie Hough in a tag-team style format referred to as ‘the two Julies’: Julie McStay presenting the proposed regulatory changes and Julie Hough focusing on the recurrent and capital funding issues.

Good, theoretically

McStay and Hough say that while attendees of the forums seemed generally supportive of most of the concepts proposed in the PC recommendations, there is uncertainty about some of the elements in the proposed reforms and how they will interact. 

“Providers welcomed the economic approach of moving to a demand driven, consumer directed system with potential for increased user pays recurrent funding,” says McStay.  “But there is less certainty about the capital funding recommendations, particularly the lack of incentive for consumers to pay a bond.”

“Participants at all three forums raised concerns about perceived disincentives for consumers to pay lump sum accommodation bonds, rather than take the option of periodic payments for accommodation,” Ms McStay said.

The proposed Pensioner Bond Scheme (PBS) is seen as a large part of this problem.  Intended to exempt the proceeds of sale of the family home from consideration towards pension entitlements, yet be flexibly structured towards periodic draw downs, indexed to the CPI and government guaranteed, the PBS was seen to discourage lump sum payments. 

“They’re worried that accommodation bonds would be leached out.” said Julie Hough.

“Obviously that has implications for provider banking arrangements and their ability to pay down debt.  Providers perceived that bank borrowing arrangements for construction debt, which is traditionally paid down to serviceable levels by accommodation bonds, would be likely to be considered a higher risk by lenders, despite lump sum bonds being available on all residential aged care places.”

“Many providers felt that in striving to balance bank debt repayments against sufficient lump sum resident funding, discounting of bonds – to make them more appealing than the periodic payment – would be inevitable. So a great deal of clarification and some financial modeling is needed,” Ms Hough said.

The supply equation

Another area requiring more detail was the way in which the PC envisages the cost of supply of accommodation.  

“What does the cost of supply entail?  It’s more than the land and building cost and the running costs. Providers felt it should also consider future replacement costs and an adequate return on investment.  So, lots needs to be taken into consideration,” said Ms Hough.

Complaints handling and review processes under the new Australian Aged Care Regulation Commission (AACRC) were another source of concern to attendees at the forums.

“The AACRC was seen as OK but not a single person I spoke to that didn’t have something to say about the CIS.  It is seen as such a drain on resources,” said Ms Hough.

Further clarity is also sought regarding the methods proposed to be adopted to address issues of quality and transparency that currently exist within the ACSAA as well as the proposed policy in relation to audits, support contacts and unannounced visits.

Delegates to the forums also ask whether a risk-based approach to compliance and enforcement will be adopted within the AACRC and what the proposed enforcement tools will look like.

“People felt it was great to have a new body […] and the division of the other different functions all sounds good.  But they couldn’t clearly see how it was all going to work.  It’s great to say we will have a new statutory authority but where do the resources come from and what does it need to look like in order to be successful?” Ms Hough said.

One Stop Shop

In relation to the proposed Australian Seniors Gateway Agency, the primary concern was around the way the assessments will take place across both community care and residential care.

“The report considers a number of options but it seems to be endorsing a single assessment process that would look at lot like ACFI for residential care and be ACFI-like for community care,” says McStay. 

“Providers are asking, will the Gateway agency be undertaking the assessments?  Not the providers?  And how is the Gateway going to do it in a location removed from the facility?

“Is it just another level of burueacracy? Will it be able to achieve everything it sets out to achieve,” Ms McStay said.

Providers also questioned what mechanism would be available to them to challenge a decision if they don’t agree. 

“If there is a material change in the resident’s condition, providers felt they should have the right to review.  But what if you disagree with their assessment?  If the assessment isn’t considered accurate by providers?  So that needs to be considered.” 

The hub of the matter

The operation of the proposed regional hubs presented another rich vein for questions.  Major concerns were expressed about the operational contracts for these hubs, if they were to be outsourced by Government – the key concern being one of conflicts of interest should aged care service providers step into the role.   

Related to this, providers questioned details such as how many and who would be on the multi-disciplinary teams assessing people for more specialised levels of care and support and how consistency could be ensured from hub to hub and across metropolitan and regional and remote settings. Also how the system would interact with the existing GP network.

“People need to be appropriately qualified to undertake the assessments.  There were some pretty strong objections to the gateway agency conducting case management assessments and concerns about more bureaucracy,” Ms McStay said.

According to Hough and McStay, other issues earmarked for more explanation included the process envisaged for transition from the current system to the new demand driven one and also the time frame proposed.

* See a detailed account of the issues arising from the Hynes, PKF, ACAA forums in the forthcoming March April issue of Australian Ageing Agenda magazine.

Tags: aged-care, aged-care-association-australia, caring-for-older-australians, hynes-lawyers, julie-hough, julie-mcstay, pkf, productivity-commission,

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