In this changing landscape, what could the future of aged care look like?

Written by Tim Humphries, CEO Homestyle Aged Care, for the Hello Leaders Summer-Autumn publication

Australia’s aged care sector is undertaking transformational change, with unapologetic ambition.

All in the sector agree change is needed, however, a focused approach may lead to sustainable improvement, limit further closures of homes and slow the departures of quality aged care workers. 

The Department of Health and Aged Care published its reform agenda, the most recent version (2.0) outlines 61 Aged Care Changes from October 2022 to December 2024, 26 changes per year.

The pace of change is coming at a financial cost in an already strained sector, as well as personal cost to many in the sector who have, since the announcement of the Royal Commission in 2018, been operating at unsustainably high levels.

The financial costs associated with implementing the changes are significant and with over half of the industry making a loss meeting the change agenda will lead to more providers failing financially. Many also question with so much change being implemented in quick succession how do we know what is and is not working?

Funding increases whilst significant, have mostly benefited care workers and passed through providers’ hands. The increase in workers’ pay is well earned and supported by the sector, however, what was declared as fully funded has not been.

The increase in leave liability from July 1 2023, is to be 50% funded. With the grant opened in December, funds will make their way to providers well into 2024 and providers will continue to cover the additional cost for all leave taken from July 1.

Payroll tax for private providers, which varies by state up to 6% of wage cost, has not been covered in the work value case increases. The December increase in AN-ACC to cover the 5.75% Fairwork increase is greatly beneficial, however received 6 months after the additional costs have been incurred. 

Pass-through grant funding such as the retention bonus and Registered Nurse (RN) incentives whilst providing support to valued team members has come at a cost to providers. Oncosts were not funded, and there was an expectation providers passed on the funds to their teams prior to receipt of funding which arrived many months later.

The use of grant funding to address shortfalls has been welcomed by industry but has also come at the expense to providers. Most grants need additional staff to complete the applications and then respond to, in some cases a great many queries and further details often after the changes to grant rules following application.

Much change has occurred on the fringes of the sector. Significant funds have been allocated to the regulator, consultants for such programs as the Governing for Reform initiative, as well as consulting to assist with grant funding scrutiny.

Consulting support for the regulator was recently shown to be in some cases below the accepted standard. In total, the Department of Health and Aged Care spent around $84 million on consultants during the 2022-2023 financial year!

The Royal Commission demanded transparency and the sector is now providing significant amounts of data daily, monthly, quarterly and annually in a variety of formats to a variety of departments and the regulator.

The benefit of the provision of data is yet to be seen. Reporting of improvements to care outcomes and benefits to residents and care recipients, particularly, quality of life, would be the single best benchmark to improve the sector’s reputation. Whilst quality of life metrics are difficult to measure and benchmark, this should warrant prioritisation and would be supported by industry.

The significant increase in reporting and transparency seems to be one-way, with the department particularly seemingly holding its cards close to its chest whilst the sector tries to guess both its agenda and the details of upcoming change.

Clarity is critical for the successful implementation of change. Care minutes are a great example of where interpretation and classification seem varied across providers. New governance requirements are another change where cost has been incurred to interpret the new requirements.

With new standards and a new act on the horizon, these costs will escalate as we try to understand and interpret what the changes practically mean. Having implemented new standards in 2019, we are aware of the associated cost and complexity, coupled with a new aged care act, more than likely requiring legal interpretation the costs will be significant. 

Whilst the sector sprints to keep pace with the significant change agenda it would seem from both departmental webinars and the constant communication of system outages and errors the Department and the Regulator are understandably also struggling to keep pace. Changes to reporting, funding, regulation, governance, and assessment have all had issues.

The system remains complex, with a great many different environments that often seem to duplicate data requiring providers to enter the same data numerous times in numerous systems. Whilst the complexity and size of the systems mean resolution will take time, from a provider’s perspective, it would be appreciated if timelines were extended to those providing care.

So, what does all this mean? There appears to be a consensus amongst many providers that the combination of the change agenda, a workforce that is feeling underappreciated and overworked, and significant under-investment, shortages are inevitable.

Hospital beds are already being used to accommodate older Australians in most states. The ultimate issue is that older Australians will not be provided with the care they need as the supply will be exhausted. Most workers in the sector want to provide great care to older Australians and to be acknowledged for doing just that. No one will be happy when hospital beds are the last resort for those who can’t find appropriate aged care.  

We have as an industry, those who we care for, those who care, the Department, the Regulator and Government all managed our way through extremely challenging times.

Whilst perfection is not achievable, and we have each made mistakes and missteps, the intent of all continues to be one of genuine care and compassion. Whilst many believe we have passed the point where shortages are avoidable, we owe it to all older Australians to find solutions to the problems that seem obvious to most.  

Tim has over 20 years of health experience including 17 years within aged care. Prior to Homestyle Tim was CEO of Provider Assist, a large, aged care consulting service. Tim recently stood down as Chairman of the board of directors for the Australian Centre for the Prevention of Cervical Cancer after 12 years as a director.