Aged Care Sector Financial Comparators

These days I only read the newspaper on the weekend.  My favourite is still The Weekend Australian.  It often has thought provoking articles, and occasionally some fodder upon which one can reflect from an aged care sector perspective.

The December 8-9, 2018 edition is just one of those occasions.

On page 2, there is an article bemoaning the recent year upon year increase in private health insurance premium rates.  The article reports that ‘Health Minister Greg Hunt … expected to approve an industry average below 3.95 per cent … the lowest since 2001.’ It also includes commentary about the anticipated significantly lower rate increase out to 2022 promised by the current Federal Opposition.   

According to Australian Prudential Regulation Authority (APRA) figures cited by The Weekend Australian, the industry weighted average premium increases approved by the Minister for Health since 2015 are as follows:

2015: ​​6.18{325a31833073d9460f7a78bcb516ce0c388f4161360d4b20624508c43d55a27c}

2016: ​​5.95{325a31833073d9460f7a78bcb516ce0c388f4161360d4b20624508c43d55a27c}

2017​​: 4.84{325a31833073d9460f7a78bcb516ce0c388f4161360d4b20624508c43d55a27c}

2018​​: 3.95{325a31833073d9460f7a78bcb516ce0c388f4161360d4b20624508c43d55a27c}

2019​: Under​ 3.95{325a31833073d9460f7a78bcb516ce0c388f4161360d4b20624508c43d55a27c}

I understand the impact of high levels of private health insurance premiums, that seem reachable by those who for whatever reason determine them to be affordable.  What is more, in contrast to aged care funding, the payment of insurance premiums does not come from the Government purse, but rather from individuals who have determined their affordability.

I find this article useful, if only because for almost the past twenty years I have been monitoring Health Ministers making similar approvals for health insurance premium increases yet at the same time, as the senior Minister over the aged care portfolio, makingstarkly lower indexation for payments for recipients of care or, more indirectly, to the providers of care to aged care recipients.

The comparison of funding increases made to aged care providers through the various indexations against several alternate indicia is shown below:

The chart above clearly shows that whilst aged care funding indexation has indeed kept fairly much in line with CPI, it has failed to keep close to Work Price Index (“WPI”), Average Weekly Earnings (“AWE”), and the greatest gap is between aged care funding and private health insurance premiums.

I will be among the first to say that additional funds are not always the determinant of better quality.  Yet the absence of an equitable funding methodology in residential aged care since 1997, and growing concern about insufficient supply of places in community based aged care since February 2017, seems obvious.  

Inclusive of some $1.7 billion removed from forward funds in 2015 and 2016, there is a clear pattern of diminishing Government expenditure in aged care over the past twenty years to a point where it is highly unlikely that even courageous and good providers of care will be able to sustain their service provision without a sizeable injection of funding.

It has been just three days since the Federal Standing Committee on Health, Aged Care and Sport recommended support for the Aged Care Amendment (Staffing Ratio Disclosure) Bill 2018.

I support the recommendation that aged care providers disclose their staffing ratios. However, it would be unreasonable to expect that providers will be able to achieve a reasonable staff ratio without an immediate and substantial injection of funds – albeit with reporting requirements.

Perhaps the Royal Commission can consider this matter in their review processes into the whole aged care sector quality and safety funding and performance?

Nice chatting

Wayne L Belcher

Bibliography

Alex Grove, Residential aged care funding: recent developments Parliament of Australia

House of Representatives Standing Committee on Health Aged Care and Sport, ‘Advisory Report on the Aged Care Amendment (Staffing Ratio Disclosure) Bill 2018’ (Commonwealth of Australia, Canberra), December 2018 

Sean Parnell, ‘Rise in health premiums likely lowest in decades’, The Australian (Sydney, NSW), 8 December 2018

Elephant in the room?

So, what is the elephant in the room with aged care at the moment?

In a report released Friday 17 August 2018 that showed a recent increase in home care funding for elderly care recipients, there was a worrying trend in demand versus ability to provide that needed care.

That is, despite the growth in older people desiring home care services, the number of home care packages assigned (or available) is simply not keeping up with demand.

At 31 March 2018, according to figures only released on 17 August 2018, the queue waiting to receive a package had risen to 108,456 people.  That is an increase of 3,854 on those waiting at 31 December 2017.  Not only that , but just over half of all those in the queue have been assigned a package at a lower level than their needs require.  Remember this is all based on the Australian Government’s own approved needs assessment, and allocation of packages.

Contemporaneously we have demographers projecting the number of residential aged care places required to be built/developed is now at about 75,000 by 2025.  That is only eight years away.

Continue reading “Elephant in the room?”

Reflections

In late January and early February 2018 I had the privilege of joining the Global Conference on Integrated Care (“GCIC”) in Singapore.  I am delighted to say that for me this was the most beneficial conference that I have attended since my re-connection to the aged care sector in August 2016.

Every nation represented at the Conference shared information about their significantly growing healthcare budget and rapidly ageing population. All nations have health and aged care systems that were created for a previous generation. They are not designed for the massive ageing population growth that require more and more health, social and aged care services.

As often as I remind others of the difficulties aged care providers, their workforce and clients are confronted with, I remind myself that we belong to a bigger system of health and social care provision.

Many parts of that system attract what seems to us, by comparison, to be outrageous funding.  Maintenance care only in a hospital costs approximately $1,200 per day.  A day of care in an intensive care unit costs $6,000 plus per day.  That is not to say of course that these services are not important and desperately needed.

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Presenting at a Global Conference on Integrated Care

The below is from Braemar’s Media Release:

Wayne Belcher (OAM) will speak at the Global Conference on Integrated Care at the start of February, where he will present an analysis of Australia’s aged care sector, two decades after the Aged Care Act (1997) was implemented.

His presentation will cover areas including the history of aged care in Australia and how it has transitioned from basic care homes to a major industry, a review of the care models currently being employed as deregulation takes effect, and a review of clinical governance.

International experts from the USA, UK, Canada and Hong Kong will be among the conference speakers, which will take place at the Resorts World Convention Centre in Singapore from 1- 3 February 2018.

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How fair is the Western Australian GST share?

 


For months, if not years, we have been hearing about Western Australia’s fair share, or rather the lack of it, with respect to GST payments to the States form the GST raised by the Australian Government.

Western Australia, under the current arrangements, receives just $0.34 from each $1.00 raised from within WA from GST revenue to the Australian Government. It clearly seems unfair. Particularly clearly unfair by direct comparison:
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Nothing Changes?

This piece was published as ‘The Bones are Bare’ on Australian Ageing Agenda

I have been back working in the aged care sector for almost twelve months now – first on an interim basis with Baptistcare here in Perth, and for the past four months or so as Chief Executive with Braemar Presbyterian Care in WA.

One of the most common questions on my return to the sector is about the amount of change there has been in “aged care” since I left the sector back at the end of 2010.

One could say that the change has been enormous, with refundable accommodation deposits now part of residential aged care, and significant changes having been made to funding around client centred care in the community aged care sector.

On the other hand, one could quite calmly suggest that no great change has happened. After all, since I first entered the aged care sector back in 1982, we have had at least some fifteen (perhaps closer to twenty) Australian Government Ministers with responsibility for aged care services over the past thirty years. In that same period, we have had at least three major changes to the funding regimes that providers live with daily.

Continue reading “Nothing Changes?”