Research Page

Aged need protections

Letter, The Age

Graeme Croft refers to the slump in share price of aged care companies (Letters, 6/9). This followed analysts downgrading aged care stocks after the government issued new guidelines. After the budget announced changes to the Aged Care Funding Instrument, causing providers concern about profits, some privately owned aged care homes responded by charging additional service fees, including “capital refurbishment fees” and “asset replacement contributions”. These fees improved profits but did not provide any benefit to residents. The Department of Health has announced that these types of fees contravened the legislation.

So while I agree with Croft that the industry needs serious reform I don’t agree with his conclusion. The care of vulnerable older people is too important to be left to the free market.  In an unregulated environment, these extra charges, up to $18 a day, would have gone unnoticed.

Croft also refers to the “high standards” set by the government. On the contrary, legislation falls remarkably short of demanding high standards. Unlike childcare centres, there is no requirement for aged care homes to have mandated staff-to-resident ratios. The accreditation and outcome standards also remain woefully inadequate. “Consumers” of aged care are often frail. They do not have the capacity to “drive” the residential aged care sector.

Sarah Russell, Northcote

Bags of money in aged care


Letter, The Age

Residential aged care is big business. The Aged Care Financing Authority estimates the sector requires an investment of $31 billion over the next decade. Most of this will come from the private sector (The Age, 29/7). The bipartisan “Living longer living better” reforms have decreased regulation in aged-care homes. Vulnerable older people are now “consumers” in a market-based system. Deregulation serves the interests of providers, not residents. Paradoxically, private providers of aged-care homes lobby for a decrease in regulation and an increase in government subsidies. Leading Age Services Australia, the peak body representing private providers, is using images of “money bags” to promote their funding workshops to optimise government subsidies. This ad suggests that profits trump residents’ care. Recent calls for camera surveillance in aged-care homes divert the focus away from the need for systemic change. The care of vulnerable older Australians is too important to be traded on the market like any other commodity.

Sarah Russell, Northcote

Silence on elder abuse

Letter, The Age

Mr Turnbull responded quickly and appropriately to Four Corner’s report into the abuse of youths in the NT corrections system. How long before he responds to Monday night’s ABC’s 7:30 program into elder abuse? Over the past few years, there have been numerous reports of elder abuse in aged care homes. There have also been several government inquiries into aged care homes. The federal government’s ‘‘Future of Australia’s aged care sector workforce’’ (2016) received 73 submissions from staff and relatives who are extremely concerned about declining standards of care in aged care homes. How many more inquiries describing neglect and elder abuse will be needed before a royal commission into residential aged care is held?

Unlike in child-care centres, hospitals and schools, there is no federal legislative requirement for aged care homes to have mandated staff-to-resident ratios or skill pre-requisites; or even have a registered nurse on site. Without registered nurses in aged care homes, the risk of elder abuse increases.

To ensure older Australians receive the quality of care they deserve, aged care homes require greater scrutiny, accountability and transparency.

Sarah Russell, Northcote


Financial elder abuse is family violence. Research shows that women over the age of 80 are most at risk of financial elder abuse, with adult sons being the most common perpetrators.  It is often a silent crime – unreported and unacknowledged. Like all silent crimes perpetrated mostly against women, financial abuse will be difficult to police.

Claudia Castle’s examples demonstrate that the opportunities for children to act inappropriately are enormous. There are no formal mechanisms to ensure that financial powers of attorney act in an older person’s best interest.

Boomers with early inheritance syndrome feel a sense of entitlement to their parents’ assets. They make ageist and sexist assumptions that devalue the rights of their elderly parents. They often justify their actions by saying: ”Mum doesn’t need money now, and it’s going to be mine anyway.”

For financial elder abuse to become a criminal offence, attitudes towards older people, particularly older women, need to change.

Sarah Russell

Aged care reforms: who really benefits?

The Federal Government is promoting its reforms in the aged care sector as supporting a more consumer-focused system of care.

But do de-regulation, the introduction of a more market-based funding system and the entry of new commercial interests add up to better care for older Australians?

The answer, according to Dr Sarah Russell, is a resounding no.  She argues that the current reform agenda risks exploiting vulnerable consumers and that more regulation is needed in the aged care sector to reduce rorting and promote the delivery of high quality care.


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

Too many one-offs

Whenever a negative story is reported about aged care, peak bodies representing the providers claim this negative story is a “one-off incident”. John Kelly’s response to my recent opinion piece is one such example (Letters, 5/6). The federal government’s recent Future of Australia’s aged care sector workforce (2016) received 73 submissions from staff and relatives who are extremely concerned about standards of care in aged care homes. It is clear from these submissions that many aged care homes employ an inadequate number of staff. In some instances, there is only one registered nurse on duty in an aged care home with 150 or more residents. In some cases, relatives feed, shower and dress residents because staff are too busy. When the call bell is used to get assistance to walk a resident to the toilet, no staff may be available. How many “one-off incidents” are required to indicate systemic failure?

Sarah Russell, Northcote

Time to listen

The arrogance of the letter by John Kelly (CEO, Aged and Community Services Australia) is symptomatic of much that is seriously wrong with the aged care sector.  Residents are starting to be heard – and what they say about standards in many so-called “care” premises is deeply unsettling. Australia may be a good place in which to to get sick – can it be said that it’s a good place to get old?

John Simpson, Melbourne