Support at Home pricing to damage seniors, health and aged care sectors – the impacts of short-sighted policy

For the aged care sector secure to endure, more than that to thrive, costs must be acknowledged, balanced and managed, not just for the current generation needing care but the many to come. The latest fees policy for Support at Home shows a worrying trend of policy without balance. Australia’s tax base is built on the principle that those that have should pay more, so that those that don’t aren’t left in squalor. Expert, and adjunct professor at UNSW and QUT, Kathy Eager, shares how rigid funding models mean the ones that can sustain the least, will feel the impact most.

Aged care is complicated. Any voice in the space who says otherwise is concerningly naïve or drastically out of touch. Without sounding glib, many seasoned leaders in the space know it takes a blend of sincerity, clear intellect and enduring spirit to seek to make a difference in this sector. From funding models that would make Nobel laureate heads spin, to the precision needed to balance business acumen and strategy while serving some of Australia’s most vulnerable is nuanced on a good day, hopeless on a bad. It is not rhetoric to say Government, provider and home care executives, and businesses, that support the sector, must listen to each other if the needle is to be threaded. Kathy Eager notes how, upon the announcement, of the new fee policy alongside the new Act and associated rules last year, she was not alone in arguing in her Senate submission that the, “proposed fees were too high and not equitable.”

It is a collaborative effort for industry leaders, experts and Government to try and thread that needle, when experts provide evidenced submissions, resulting in, “our concerns were ignored” it is the sector and those it serves that bear the impact. In the effort to steer the care of seniors into a sustainable place for current and future generations, ‘fair’ must be robustly advocated for and discussed.

Eager highlights that, “Older people currently in the aged care system are ‘grandfathered’ from the new arrangements and so the major advocacy groups who they represent did not raise strong objections.”

Funding models, in their function, should be dynamic to sustain fairness across generations, not increasingly posed to set burdens on those yet to come.

Central to the concerns experts are raising, against the pricing models of the incoming Support at Home (SAH) scheme, is that “the fees are too high and not fair.” Appearing in last week’s Senate Inquiry, Eager quoted analysis undertaken by industry advocate, Peter Willcocks. His analysis paints a bleak picture, “a typical full pensioner on a level 7 package will be paying about 19% and a part pensioner about 25% of their pension each fortnight just to get the support they need to live at home.” 

It is in light of the context of Australia’s wealth as a nation that pricing also must be assessed, “We are one of the wealthiest countries in the world. We should not be asking older people to choose between a shower and a meal. It’s unethical.” With ballooning NDIS, healthcare and aged care costs, it is critical that public spending and scheme costs are managed, however, finding the savings in pensioners belies the gaping opportunities government has not taken in tax policy, re-structuring for those that have much, dare it be said, perhaps even big tech.

Eager outlines that under the current scheme health is rewarded, vulnerability is not. A full pension paying $80 per week for support at home will be relatively healthy. An unfortunate fall will result in needing extra help, with showering and tending to the dressing. “Their fees increase. But their pension doesn’t…the sicker and frailer you are, the more you are penalised.”

Flabbergasting experts and advocates across the industry, is the direction the pricing model for Support at Home has taken in terms of removing percentage caps. With means testing across RAC and home care in the past, fees have been linked to how much a resident has financially.

“The normal [old] fees policy is that fees are capped as a percentage of income…for example, you are only required to pay up to 10% of your fortnightly income.” Eager starkly notes, “No such cap will apply to Support at home.”

Without percentage caps on payments, the likelihood of severe implications for Australians with limited means is extraordinarily widened.

The cap that is being introduced is in the form of a lifetime amount, and at $130,000 the ability for many older Australians, and those who will be senior in decades to come, it is a lofty sum. While the $130,000 is a lifetime cap for SAH and RAC, Eager explains “the lifetime cap is not the solution. People have bills to pay every week and many don’t have $130,000 to pay in the first place. Also, many people will die before they reach that cap.” 

Providers with decades of experience understand the dignity and pride that many residents wish to uphold. Numerous residents have, with significant reservations, entered RAC with family encouragement and support. For seniors in Australia that don’t have family support but wish to remain at home as their only perceived option of retaining dignity, there is the growing likelihood of silent suffering as SAH costs go up but their pension won’t stretch to cover wound care, basic nutrition and the pervasive burden of the poor, rent. This is not a choice that should be made in Australia.

Experts such as Eager are realistic about acknowledging cost, having “no problem requiring older people to contribute to the cost of their care according to their means.” It is in the entrenching of inequality, due to the systemic structure of the pricing model, that is problematic, “this policy punishes frailty and will inevitably lead to people not being able to afford the services they need to live safely at home.”

“Wealthy people will be able to afford the new higher fees. Poor people won’t. Renters will be particularly hard hit because they need to pay rent out of their pensions.”

With the recent release of the parliamentary register of interests, politicians being in the position of rental yields of upwards of six properties is particularly galling in light of the repercussions of the SAH pricing model.  

Directly addressing the growing alarm that has been rising from multi-sector experts, provider leadership, and advocates across the nation, Eager pinpoints the short-sightedness of the SAH pricing policy. In saying it is “expensive and inefficient” this must be understood to mean a systemically damaging, expensive and inefficient. The policy is “penny wise pound stupid, as it will result in increases in emergency department visits, hospital admissions and premature admissions to residential care. The overall cost to taxpayers will increase at the very time that the baby boomers start hitting very old age.”

The collision of ageing boomer demographic, and already strained healthcare and aged care sectors, is an assured multi-faceted future that must be risen to by all levels of Government, with multi-sector sector support. Bringing together a coalition of experts across healthcare and aged care, with many providers already voicing their willingness to get stuck into collective problem solving, is desperately warranted for systemic survival at first, with ambition of outcome needing to elevate to reaching the sustainable state of these sectors. Smart and dynamic policy must safeguard these critical components of Australian quality of life.

In such a complicated mix of cause and effect, multi-pronged problems and need for dynamic change, ‘set and forget’ policies are outdated and largely damaging. For experts across public and private space, humility in policy-making is helpful and healthy for all Australians.

Eager notes, “Government has the right to set policy. Experts have the right to tell them they are wrong. Citizens have the right to object.”

Leadership across public and private spaces need the best and brightest; For all it is worthwhile to remember that pivoting from evidenced critique comes from the best character and brightest intellect. “No government gets every decision right, especially in an area of complex policy reform. Smart governments change their policy when they realise that they have it wrong.”

As to the impacts of the inequality of the SAH policy, Eager reminds the sector that the impact may take time but it will arrive, “Everyone in receipt of aged care at the time the Act was introduced is protected from these higher fees through ‘grandfathering’ provisions. So the impact will not be felt at scale at first.”

It’s the future people of low means that’ll bear the brunt.

“The impacts will be felt as new people seek aged care for the first time. Those people are in for a big shock.”

Eager provides clear opportunities of adjustment. “Government should cap fees at around 10% of fortnightly income. People receiving support at home have the right to both a shower and a meal and shouldn’t have to make trade-offs about essential costs.” Continuing, “Second, restructure the Clinical Care category to include personal care. People should not have to pay for help with hygiene.” And lastly, “abolish the artificial distinction between Independence and Everyday living. If a person needs help with everyday living, the services they need are essential to their independence.”

“The final policy would have only two categories – Clinical and Independence – with fees capped based on the older person’s capacity to pay.”

Experts and advocates are coming to the table with solutions. It will take a sustained effort by all parties to help get the balance right for all Australians. It is for those in policy creation to listen, assess and act.