Regional providers fear the cost of aged care reform could be too high

Regional aged care providers in South Australia have expressed their fears over implementing aged care reform changes at a public hearing regarding the new Aged Care Bill in Port Lincoln last week, 650 kilometres from metropolitan Adelaide.

Executives from Helping Hand Aged Care, Boneham Aged Care Services, Eyre Peninsula Old Folks Home and Edenfield Family Care were among those who shared their insights on regional aged care and what the new Aged Care Act and key reforms mean for them.

Helping Hand CEO, Christopher Stewart, began proceedings by highlighting the critical role aged care providers play in enabling older people to age in their communities. He shared how Helping Hand stepped in and acquired a community-owned facility in Whyalla – a town of roughly 20,000 – which had faced regulatory sanctions, care failures and financial distress. 

“At risk were 150 older residents, 200 in-home care clients and over 220 jobs. Today it is fully compliant, continues to serve the people of Whyalla and sustains those vital jobs,” he shared.

“This success was achieved despite ongoing challenges that regional providers face, including increased costs of compliance and regulation, workforce shortages – especially of RNs – and the higher cost of operating in non-metro areas. We believe it’s critical that the legislation and its accompanying rules and policies acknowledge the distinct challenges faced by rural, regional and remote providers to ensure that they can continue to deliver high-quality care.”

Approximately one-third of Helping Hand’s services are delivered in regional South Australia. Mr Stewart said the close-knit nature of aged care in that environment – where residents and staff often have lifelong connections – causes it to stand apart from many metropolitan areas.

When asked about the importance of Support at Home, Mr Stewart said the program will help to fill the gaps left by residential care homes that have closed in recent years because of short staffing. He cited the cost of service delivery and travel expenses as another added challenge, particularly as a not-for-profit provider.

He emphasised the need to get it right and be a success because “people have nowhere to go” when their local residential care home closes. 

The cost of change

The regulatory burden was another focal point as the Shadow Minister for Aged Care, Senator Anne Ruston, queried the regulatory cost to providers. Mr Stewart said his organisation has already spent a conservative $2 million per annum in recent years. 

Necessary system upgrades for Support at Home and other upcoming changes will likely see those costs blow out to $6-8 million with staff training to come at a “significant cost”.

Edenfield Family Care Operations Manager, Michelle Schupelius, said their expenses won’t be as large because of their smaller scale, but the same challenges remain. 

“We’re going to need an education module that meets the requirements of the new legislation that’s coming through. Our systems as well wouldn’t meet the requirements that are coming in, and our policies and processes will need to be completely overhauled,” she said.

“Being a smaller provider, the cost isn’t quite as great. However, it still is looking like we’re going to need to employ two to three full-time equivalent, exceptionally knowledgeable registered nurses with the ability to look at all of the evidence and put that into evidence-based practice. That’s quite a significant cost for a small provider.”

Ms Schupelius added that the uncertainty over how Support at Home will look behind the scenes is hindering providers from making progress on preparation. Both she and Mr Stewart said it could be at least 12 months to implement systems that would have them prepared for the new home care system and requirements. 

“Small providers will really struggle with this because we don’t have the services and the staff available to focus on this project. We still have our day-to-day things that we need to do. From a smaller provider perspective, that does concern me – their ability to roll this out properly,” Ms Schupelius said.

Trevor Johnson, Eyre Peninsula Old Folks Home CEO, was also concerned about the pace of change. Like most other regional providers, the not-for-profit operator does not want to see their residents further affected by regulatory changes. 

“Please don’t pass the bill just to be politically expedient. We’ve already been hit by the government rushing in the 24/7 and other RN care minute mandates. Look at the consequences: you’ve had facilities close across the country. And we reduced our capacity by at least 10% for a period of time,” he explained.

Mr Johnson said it cost the provider – which operates on one residential care site – just under $900,000 to meet mandated 24/7 registered nurse coverage. This money has been pulled from savings intended to fund facility refurbishments. 

“Every resource we divert to an unreasonable rate of change reduces our ability to enhance our offering. We have finite resources. We’re not a big government agency that the government can just throw money at,” he added.

Several providers also noted how damaging training costs could be. One indicated it might take $50,000 to effectively train all their staff for one day, which for smaller providers, would eat up a considerable amount of their budgeted profit.