Industry leaders slam AN-ACC funding: “It’s not working at all”

Published on 9 July 2024 (Last updated on 11 July 2024)

Aged care’s AN-ACC funding model has come under fire with one regional provider claiming “it’s not working at all” while another said it’s not sustainable, especially for more innovative models of care that look to redefine the publics’ expectation of residential aged care.

Speaking at ARIIA’s Facing the Future Conference, NewDirection Care Director, Greg Aleckson, said that he – like many in the sector – does not view AN-ACC as sustainable.

“The reason we see AN-ACC as not a sustainable funding mechanism is it’s not unlike ACFI in that it doesn’t promote re-enablement and it doesn’t promote even the maintenance of functional ability and it rewards disablement,” he said.

Mr Aleckson said NewDirection Care, which operates as a micro town rather than a traditional residential aged care facility, has been restricted by the Government’s current funding model as it looks to provide high-care support in a less restrictive setting.

“Innovation was mentioned by the Aged Care Taskforce, it was mentioned in terms of the Aged Care Act. It’s been mentioned a lot but there’s no detail and unfortunately one of the challenges is if you have a highly regulated model that stifles innovation,” he added.

“So while we want to build innovation we’re becoming more regulated and more compliance driven. It’s made more difficult by one body, the watchdog, also being responsible for innovation.”

His thoughts were echoed by Stephen Becsi OAM, CEO, Director and Co-Founder, Apollo Care. Apollo Care, which is very active in acquiring independent providers so they can operate as part of a larger network with more resources, operates primarily in regional Australia. 

It’s in these locations that Mr Becsi said AN-ACC is not working at all, and he believes it will not be suitable for the incoming baby boomer cohort. He also added that the current funding streams are not doing nearly enough to help. 

“Look at everyday living. Providers are losing money. Laundry, cleaning and food, we’re losing $5.62 a day. If you look at accommodation, we’re losing $10.16 a day. You put that together [with direct care] and providers across Australia are losing 64 cents a day for every single resident in residential aged care. Companies go out of business,” he said. 

There is also the additional burden of agency costs.

“If you don’t have enough staff you have to pay for agency. We have one metro facility and we have no agency staff there because lots of people live in Sydney,” Mr Becsi added.

“If you do have agency it’s about $11 per day. But the moment you go out to regional it’s $27.50. One of our newest additions had agency rates at 62%. People don’t want to live in the bush. So you have to do things, otherwise, with these losses the nursing home is going to close down and that’s what’s happening in Australia right now.”

Building on AN-ACC’s unsuitability is its impact on aged care workers who are not Registered Nurses (RNs). The focus on RNs has seen many aged care workers pushed aside or into new roles, with lifestyle services staff among those facing the chopping block the most.

Mr Aleckson acknowledged that the Government had to focus on RNs after the Royal Commission into Aged Care Quality and Safety. However, t’s now created huge demand in a tight market and pushed many important workers aside. 

“From a workforce perspective, we have this model that’s heavily dependent on RNs and that clinical side but we need to be more focused on the other people in the game which is carers. We need to be bringing carers along […]  they’re the people who are with residents or in homes delivering most of the services,” he said, 

“We haven’t talked enough about developing them and we’ve made it all RN-centric. If you want to maintain functional mobility, allied health is where it’s at. And all the other lifestyle factors and quality of life factors are delivered by carers and lifestyle and events people. Those are the real workforce challenges and unfortunately, it’s a challenge unintentionally made by the focus on nurses.”

Mary Patetsos, Aged Care Taskforce member and experienced industry leader, also featured in the conversation. She shared that workforce issues were one of many areas the Taskforce wanted to explore in more detail but simply ran out of time to address. 

One topic they did cover in plenty of detail was of course aged care funding. New, innovative models of funding are seen as essential steps to achieving financial sustainability.

“We were very aware that most providers were reporting deficits not because of poor performance but because the funding model wasn’t able to deliver for them in a way that created enough surplus for them to reinvest in the very things that older people need,” she said.

Ms Patetsos added, “We rely on a regulatory system that we need to comply with which is, arguably at times, burdensome.” 

Few within the sector would argue with that statement.  

aged care reform
aged care taskforce
mary patetsos
Apollo Care
NewDirection Care
Stephen Becsi
aged care funding model
Greg Aleckson