Category: Aged Care Funding

Reverse the aged care cuts?

Residential aged care in Australia is big business. The Aged Care Financing Authority estimates the residential aged care sector requires $31 billion of investment over the next decade. To attract investors, the Productivity Commission recommends a competitive market with reduced regulation. Private equity firms, new foreign investors, and superannuation and property real estate investment trusts are entering the residential aged care market in large numbers.

The ‘Living longer living better’ aged care reforms have decreased regulation and introduced a consumer-driven market based system. The irony of this move towards a free market system is that providers rely on government subsidies. The government pays approved providers a ‘residential care subsidy’ for each resident living in an aged care home. The amount for each resident is calculated using the Aged Care Funding Instrument (ACFI). ACFI is used to pay subsidies based on each resident’s level of need. It has three funding categories: Activities of Daily Living, Behaviour and Complex Health Care. Funding in each of these domains is provided at four levels: high, medium, low or zero.

ACFI provides a financial incentive to classify residents as requiring a higher level of care. The provider receives additional subsidies when a resident is reclassified as requiring a higher level of care. However, staff levels rarely change nor are extra services provided to the resident. Where do our taxes go?

Under the current arrangements, the providers do their own assessments for government subsidies. Although politicians and peak bodies may claim that the overwhelming majority of providers are doing the right thing, the ACFI Monthly monitoring reports do not support this claim. It has been reported that one-in-eight of 20,000 ACFI claims audited last year (2014-15) were deemed to be incorrect. This figure is already tracking higher at one-in-seven in 2015-16. The ACFI Expenditure Working Group has been formed to understand the causes of recent growth in residential aged care subsidies.

Michael Pascoe asked: “Where’s the dividing line between systemic fraud and “innocent mistakes” in the aged care sector? It’s somewhere in the hundreds of millions of dollars very-much-for-profit aged care providers have been ripping out of the system by exploiting a flawed funding model – a model that encourages exaggerating care needs and discourages improving the health and independence of individuals”.

The changes to the Aged Care Funding Instrument (ACFI) announced in the federal budget have caused some private providers to worry about their profits. In a letter to managers of aged care homes, Optimum Healthcare Australia estimates the changes to ACFI will result in an average 80-bed aged care home losing $439,000 per year in government subsidies.

Not surprisingly, the peak body representing private providers is asking the government to reverse its decision. Leading Aged Services Australia has launched a campaign: ‘Reverse the Cuts – Fund the Care Australian Seniors Need and Deserve’. In response, Aged Care Matters has begun a reverse campaign: “Cut the greed: Provide the care Australians fund”. When a resident is classified as requiring higher needs, additional resources should be directed towards the resident with higher needs. Aged Care Matters also calls on all providers to stop exaggerating residents’ care needs.

Optimum Healthcare Australia recommends aged care homes re-appraise residents before the January 2017 to ensure funding is “grandfathered”. They recommend residents’ care needs are reassessed “to determine what care they actually need, not just what is reported by carers.” With their assistance, providers will “experience minimal financial impact from the [ACFI] changes”.

Some ACFI coordinators and ACFI consultants describe their role as “generating income for the providers”. An ACFI coordinator for an aged care home with 160 beds told Aged Care Matters that he is “highly stressed as the provider expects the ACFI rate for all residents to be at least $204 per day”. He described the provider for whom he works as “cooking the books” to maximise funding.

ACFI consultants must not only stop exaggerating residents’ care needs, they must also stop reclassifying residents with an illness and care needs that they do not have. Recently, an aged care home falsely claimed a resident had Parkinson’s Disease, and related health deficits, for which the provider claimed a subsidy under ACFI. When his daughter complained to ACFI Compliance Section, she was told that the appraisers “must be able to trust the word of the health care professionals at the aged care facility”.

ACFI is built on an honesty system. In an era of fraudulent behaviour in both pink batts and private colleges, it is clear that profit-based systems that rely on government subsidies cannot rely on honesty. The funding of aged care homes require transparency, scrutiny and accountability. We must all know how the providers spend our taxes.

When a resident in an aged care home is reclassified as requiring a higher level of care, the extra funding should be used to employ more staff or to introduce services such as strength training, music or lifestyle programs that would improve residents’ quality of life. Their care must not be traded on the market like any other commodity.

Dr Sarah Russell is the Principal Researcher at Research Matters and a former Registered Nurse. She is a foundation member of Aged Care Matters.

Published in Online Opinion

Optimising aged care funding

Religious, community-based and charitable organisations were once the main providers of residential aged care in Australia. Families could feel reasonably secure that while standards of care would vary, aged care facilities were not motivated by profit. During the past decade, privately owned aged care facilities have grown at twice the rate of those in the non-profit sector. Publicly listed companies are now the fastest growing owners of aged care facilities.

Earlier this year, Bentleys Chartered Accountants reported that profits in the aged care industry rose significantly. Despite the small sample (only 179 aged care homes), their report estimated that net profits jumped 159% in 2015, from $4.14 to $10.71 per resident per day.

The growth in the aged care industry is underpinned not only by our ageing population but also government subsidies. Major aged-care providers such as BUPA, Japara, Regius and Estia receive substantial government subsidies. Estia, for example, received a 10.9% increase in government subsidies during last financial year.

The changes to Aged Care Funding Instrument (ACFI) announced in the recent budget are intended to help curb a predicted $3.8 billion blowout in government subsidies. The changes will save the government $1.2 billion.

The peak bodies that represent providers of residential aged care – Leading Aged Services Australia (LASA), Aged and Community Services Australia (ACSA) and Aged Care Guild – have described these changes as a “budget cut”. The Aged Care Guild complains that the budget is fuelling uncertainty in the industry and could force a rethink on future investment plans.

In an increasingly competitive environment within the aged care sector, peak bodies for providers have successfully lobbied the government for less regulation. The recent Aged Care Roadmap describes “lighter regulation” and a “consumer driven and market based system”. Paradoxically, the providers of aged care homes lobby simultaneously for a decrease in regulation and an increase in government subsidies.

Government subsidies in aged care often serve the interests of the providers more than residents. When a resident is reclassified as requiring a higher level of care, the provider receives more money from the government. However, staff levels rarely change nor are extra services provided to the resident.

Currently, funding for aged care homes is based on a ‘terminal decline model’ rather than ‘restorative care’.  The provider receives additional subsidies when a resident declines. There is no financial incentive for providers to introduce services such as strength training or lifestyle programs that would improve residents’ quality of life. Instead, a provider is rewarded for promoting dependency rather than encouraging wellness.

Under the current arrangements, the providers do their own assessments for government subsidies. Many providers employ staff purely to complete the ACFI paperwork. The role of these staff is to generate income for the employers rather than provide care to residents. Some providers employ Aged Care Consultants who specialise in “ACFI optimization”. These Aged Care Consultants promote themselves as specialists who help to maximise funding for the aged care home.

It is not only the for-profit organisations that are making massive profits in residential aged care. Mecwacare, for example, is as a not-for-profit organisation that offers residential aged care. According to its Annual Report, it made a net profit of $3.9M for the year ended 30 June 2015. It purchased a new head office and added a further six Aged Care Homes to its portfolio.

For both the for-profit and not-for profit sector, ACFI documentation appears to have become a creative writing exercise. It has been reported that one in eight claims for government subsidies are incorrect. Whether the blowout is due to false claims for subsidies or the increasing number of high care residents in aged care is unclear.

The federal government recently introduced fines to curb a growing trend of incorrect, or deliberately false, claims for subsidies. Whether a fine of merely $10,800 for providers who repeatedly make false claims will act as a deterrent remains to be seen. Money may speak louder than the coroner.

Coronial inquests into separate deaths at two aged care homes, BUPA Kempsey and Arcare Hampstead in Melbourne, exposed inadequate care, mismanagement and cover-ups in response to complaints. Despite this inadequate care, both BUPA Kempsey and Arcare Hampstead were fully accredited by the regulator, the Aged Care Quality Agency, with perfect scores of 100 per cent in all criteria. Surely this suggests something is wrong with the accreditation processes.

Following the coronial inquiries, both homes were asked to improve their policies and procedures. However, the Aged Care Quality Agency did not change the accreditation processes. The accreditation and outcome standards remain woefully inadequate.

The Australian Aged Care Quality Agency must review the process of accreditation. The accreditation process should play an important role in monitoring the standards of care in all aged care facilities. Given accreditation enables aged care facilities to receive government subsidies, it should not be a rubber stamp.

Aged care homes requires greater scrutiny, accountability and transparency. We need evidence-based information so that we can have informed discussions about how to provide the best possible care for frail, elderly people who live in aged care homes. We need to feel reassured that government subsidies are being used to improve the quality of life of residents, not the pockets of providers.

Dr Sarah Russell is the Principal Researcher at Research Matters and a former Registered Nurse.

Published in Online Opinion

Aged care: Preventable nursing home deaths surge

The Age
Michael Bachelard
29 May 2017

Sarah Russell’s mother, Joan, died in a nursing home in September 2015. She believes the death was premature.

“When my mother was engaged, she was terrific. When she was alone and not engaged, she’d suffer anxiety … [and] she would get up and walk,” Dr Russell, a public health researcher, said.

Dr Russell gave up work to look after her, but she could not be there at all times, so she attached a note to her mother’s walking frame to warn the personal care assistants at the aged care facility not to leave her walker within reach.

One day, in the dining room after lunch, they did.

“She got up and walked, fell over. She didn’t break her hip, but she did damage her ribs, and six weeks later she was dead. The GP made the connection between the fall and her decline … I think the fall hastened her death.”

Dr Russell said the care assistants in Joan Russell’s home were “extremely busy”, but “the other explanation is that there were a lot of people in Mum’s nursing home for whom English was not their first language.

“It’s a real problem, not just for instructions left on a walker, but for communication at all. I don’t know if the person who left the trolley beside my mother was not able to read the instructions or was too busy and forgot.

“We were great friends, my mother and I … It mattered a lot to me that she had the fall.”

Dr Russell received an apology from the facility.

Read more here

Behind the numbers

Letter, The Age

The federal government cut payments to aged care by $1.2 billion over four to help curb a predicted blowout in costs. Aged care providers are predictably are up in arms. Unfortunately, government subsidies often serves the interests of the providers more than residents.

Under the current arrangements, the providers do their own assessments of residents. When a resident is reclassified as requiring a higher level of care, the provider receives more money from the federal government. However, staffing levels rarely change nor are extra services provided to the resident. One in eight claims are reportedly incorrect.

The Aged Care Funding Instrument is based on residents’ level of care rather than ‘restorative care’.  There is no financial incentive for providers to introduce services such as strength training or lifestyle programs that would improve residents’ quality of life.

The funding of aged care homes requires greater scrutiny and transparency to ensure the best possible care for frail, elderly people.

Sarah Russell, Northcote

Good bloke or smug thug

The Human Rights Commission’s report The Forgotten Children: National Inquiry into Children in Immigration Detention was tabled in parliament two months ago. The 315-page report provided compelling first-hand evidence of the negative impact that prolonged immigration detention has on children’s mental and physical health. The report also made 16 recommendations.

Since the report was tabled, there has been no substantive discussion in parliament about the report or its recommendations. Our Prime Minister has used all-too-common techniques to stifle debate – attack, shoot the messenger and then ignore the message. These silencing techniques have been effective – they have taken the focus away from an important issue that reflects on Australia’s standing in the world community: children in detention and our obligations under international law.

Tony Abbott’s aggressive behaviour towards the President of the Australian Human Rights Commission, Professor Gillian Triggs, has been named for what it was: bullying.  No doubt, like me, other women have experienced this type of silencing behaviour. In response, Gillian Triggs remained composed and dignified. She is a role model for all of us at the receiving end of such attacks in both public and domestic places.

When Tony Abbott was accused of bullying Gillian Triggs, several colleagues defended him. They described him as a “good bloke”. I don’t know Tony Abbott but I know Tony Abbott Types (TATs). TATs are often described as “good blokes”.  They are men who attended an exclusive private boys’ school. After school, they studied at a sandstone university, lived at an exclusive college and did the ‘right’ courses – law, commerce and medicine. Although many men get over their privileged upbringing, TATs do not.

TATs are men whose sheltered lives as white, private school-educated, professional heterosexuals make them blind to their privilege. They form a network by surrounding themselves with others who share their worldview. They have a toxic sense of entitlement and often say that feminism has “gone too far”.

The upper end of town is filled with TATs. These men huddle together at exclusive clubs where their networking sustains their network. When they attend social functions, they often reminisce about their school and university days – a cricket game or a rowing regatta. The old school tie matters at the MCG’s Long Room.

They do not respond respectfully to alternate views. Instead, they react aggressively. They see disagreement as combat they must win. They either attack people who disagree with them, or ignore them. Either way, they ruthlessly shut down dissent. TATs perceive those who disagree with them as enemies who must be silenced.

They use a range of tactics to quell opposition. They will interrupt, talk loudly and mock. They jeer and insult. They blame others. Recently our Prime Minister described the Opposition Leader as an “arsonist” and “the Dr Goebbels of economic policy”. They dismiss alternate views by describing them as “offensive” and “ridiculous”. All these tactics are used to avoid negotiation and compromise.

They shoot the messenger rather than listen to the message. Personal attacks are common not only in parliament but also in the Australian media. In The Australian’s ‘Cut and Paste’ section and The Saturday Paper’s ‘Gadfly’, ‘argumentum ad hominem’ replaces reasoned arguments.

TATs do not substantiate their views. They don’t need to because they know they are right. They use rhetoric, slogans and dog whistles rather than evidence to support their views. The proposed government-funded ‘stop the boats’ telemovie has been described as “propaganda”. How can propaganda further informed debate?

If the evidence does not fit with their worldview, they will simply ignore the evidence. Statements such as “climate change is crap” and “coal is good for humanity” deny decades of academic research.

TATs do not apologise when they offend others – perhaps because they do not have the insight to know how offensive they can be. Scott Morrison refused to apologise to the Save the Children staff for besmirching their reputations. Instead, he brazenly attempted to justify his actions.

They are also vindictive. Cross a TAT and you will be punished.  Soon after the recent failed spill motion, an outspoken supporter of Tony Abbott, Scott Buchholz, replaced Philip Ruddock as party whip. Philip Ruddock went quietly. Not so Gillian Triggs. Professor Triggs refused to resign. She continues to speak about the plight of children in detention.

I call on all of us who are victims or witnesses of bullying to similarly take a firm stand. The next time our views are attacked, dismissed or ridiculed, we should stay put and stay on message.

A TAT recently told me to “shut up” before abruptly leaving the room and slamming the door. He told me that my views are “offensive”. When I later received a hurtful email, I was told that the email was “only factual and honest”.

The next time I am on the receiving end of a TAT attack, I will ask him to “settle down”. When he responds aggressively to my views, I will substantiate my views. If he treats me dismissively, or attributes malicious motives, I will name his behaviour for what it is: a technique to negate my views.

Now that the tantrum towards Gillian Triggs has passed, it is time for our government to provide a substantive response to the Human Rights Commission’s report and its recommendations.  If the issue of children in detention and Australia’s obligations under international law continue to be ignored, it will be at our peril.