Aged care must retreat from financing opinion trap – sector must voice funding needs, government must shoulder how to pay for it

Kathy Eagar is an honorary Professor at the University of New South Wales and an adjunct Professor at Queensland University of Technology. She’s got a PHD in Health Economics and has worked in the health and aged care industry for decades. But as her colleagues and peers across sectors will note, it’s that Eagar is a straight-talker that marks her out as a lens to be heeded. So when she is involved in a new initiative, say the newly minted CHSP Alliance or outlining the absurdity of classifying showering as everyday living, advocates and industry leaders alike confirm it’s worthwhile to take stock. Far from easy or convenient, Eagar wants to be a part of leading aged care into a sustainable and resilient future, that means naming speed-bumps. And she’s ready to highlight a doozy, aged care as a sector has fallen into a trap; A trap of opining on how it is financed and not doubling-down on the funding it needs. An about-turn is advocated to shed mandates shouldered, but not the sector’s to bear, to avoid, as she sees, the dragons up ahead.

Funding not financing

Eagar sees that a return to protecting mandates, and re-drawing lines in the sand is not only vital for aged care to thrive but in so doing, to shed the complicated decisions, precedent and fallout that has crept into how the sector and government interact.

“Funding is about the level of resources that’s in aged care and how much aged care needs and how that funding is then distributed, between public and private, groups, organisations and needs.”

“Financing”, however, is quite another kettle of fish Eager reminds, “financing is about how the government raises money, for example, through taxation, through borrowing, through broad fiscal strategies.”

She says, “the sector clearly has a right to know something about funding, they have a right to lobby for that, and they actually know deeply how funding needs to work.”

“But financing, the sector really has no mandate and quite frankly no expertise in, because it’s about macroeconomic policy.”

Eagar raises these concerns not as a discourtesy but as a vehicle by which the sector can protect itself from taking responsibility for, and bearing the fallout from, headaches and decisions that should lie with policymakers.

Safeguarding scope

Eagar sees the pronounced trap of bearing the burden of financing decisions as starting a few years ago, “there was a working group a few years back, the government walked into the room indicating that aged care levies were not even to be recommended, and that they would not countenance that option, instead offering up increasing consumer charges as the way forward.”

The issue, Eagar notes, is that sector representatives at that time said, “’oh, that’s a good idea, and we’ll get behind it.’”

As a chosen path, higher fees have had consequences. There has been considerable pushback due to the rise in consumer fees, and due to its support, the sector has borne blame.

Eagar looks to other sectors and their behaviour regarding funding and financing mandates and responsibilities, “take AUKUS for example, where billions and billions are being spent, the defence force does not argue or opine about where that money comes from, it just says what it needs.”

“And in health, we’ve got big, powerful organisations who are very good at advocating for what they need”, she says.

“[These sectors] never fall into the trap of saying how the government should finance its needs, through taxation, or borrowing, or levies, or any type of fiscal measures, they just loudly and clearly, repeatedly, say what they need.”

Eagar and other experts saw that there were a host of ways aged care could have been funded more, “and consumer charges is only one of them. I could have an opinion too, I think we should fund aged care by increasing raw minerals taxes and taxing multinationals more.”

“I have a perfect right as a citizen to express my view, and so does every person working in aged care but the sector should protect against supporting an insider’s opportunity to give a personal opinion.”

Conflict of interest

She sees that, “those who’ve been speaking out and saying, ‘we should increase consumer charges’, they very likely have a significant conflict of interest.”

“For those sitting on government advisory bodies, that is, they’re insiders with government, they’re recommending the government making policy changes that may very well benefit them.”

Eagar names a concern, “so I have a problem with the government setting up an advisory group of aged care stakeholders where the aged care stakeholders recommend to the government that the government make consumers pay more when the people who benefit from that are the aged care stakeholders.”

She is frank, “I could come out and say, from my point of view, we should fund aged care by cancelling AUKUS, I personally think it’s a massive waste of our resources, we don’t need it, and we’re never going to get anything out of it.”

“We should be funding aged care, better aged care by cancelling the AUKUS contract.”

But she is equally fair, “at the end of the day, it’s a personal view about financing.”

“The main issue is that we have people sitting on committees that are expressing personal views, and those views are highly political and conflicted.”

Eagar indicates a heart for the newly arrived in aged care, “when it comes to higher fees for the incomers, there was so much complacency because those at the table were grandfathered.”

“It’s all very well for aged-care committee members to support higher fees because it’s the newcomers that get hit, nobody saying yes was going to be hit by those additional charges.”

The big picture

Eagar points to other sectors and standards of operating, “we don’t have the defence force being asked where the money should come from for the submarines, we don’t have the AMA or anybody else being asked how the government should fund Medicare.”

She highlights that two issues have crystalised, that have come from government pointing to aged care support, approval and backing of financing, conflicts of interest that may arise and “a lack of expertise to comment on macroeconomic policy when there is no view of the big picture.”

It is to this that Eagar says the sector must put up boundaries. Out of a profound hope to see it thrive she speaks, “defense and health are big sectors, they know to avoid being pulled into feeling responsible for indicating where the money should come from.”

“It is the government’s job to work out how to finance sectors, it is down to government priorities, it is not the provider’s job.”

She highlights that it is through government resources, its role, what it is charged by the Australian people to do, is manage to pay for necessary sectors. While it can’t pay for everything, “it is their job to prioritise, plan and manage any fallout, it is not the aged care sector’s burden to bear.”

Future boundaries

Going forward she hedges, “it could be likely, the next time aged care asks for something, the government may well turn around and say, ‘oh and how should we finance it’”.

Eagar is adamant, “the sector must be empowered to know that it is not its job to come out and shoulder all these things things that are politically unpopular, the sector should not be the one to carry the can in the eyes of the public, that is the government’s role and mandate.”

She highlights that passionate and sincere sector leaders must double-down on voicing exactly what they need, unapologetically, and indicating where the money should go, and leave paying for it to the government. When it comes to the big picture, and simply, the responsibility, “financing has always been and should always be, the government’s purview.”