The ambitious care model unburdened by aged care regulations

Aged care runs the risk of being dictated by regulation yet one Melbourne provider has broken the shackles to create a diversified care model that is both ambitious and a proven success. 

TLC Healthcare Chief Executive Officer and Managing Director Lou Pascuzzi knows the sector faces plenty of challenges in 2025 and beyond. One that he expects to impact aged care residents directly is the dilution of care, particularly high-quality care. 

He’s concerned about the government’s care minutes directions which have already seen some organisations replace enrolled nurses (ENs) and other higher-level direct care workers with lesser qualified personal care workers (PCWs). 

This is despite just 45% of aged care providers meeting both their total and registered nurse (RN) care minutes targets. 

“We’ve supported and engaged 24/7 RNs for the last 30 years. The 215 care minutes definition the government has imposed is very restrictive. We know that 20% of those care minutes are delivered by RNs, of which 10% can be from an EN. That’s 171 care minutes from PCWs, which in most cases hold only a three-month qualification in Personal Support,” Mr Pascuzzi explained. 

“The majority of aged care residents have a very high acuity profile and that’s incredibly restrictive when most of the aged care residents require RNs, however, the majority of residents might not need that amount of time from PCWs. They might need a higher skill set encompassing physiotherapy, podiatry, dietetics, general practitioner (GP) services, etc. 

“This is diluting care because what most providers are doing to afford the 171 PCW care minutes and tick that box is ‘robbing Peter to give to Paul’, by replacing higher-level qualified staff with PCWs. That puts the industry at risk concerning the level of qualified care residents actually require.”

With roughly 55% of metropolitan aged care providers meeting their total care minutes targets, and a further 65% meeting RN care minutes, the government recently announced it will financially penalise those who continue to fall short from April 1, 2026.

This will see the Base Care Tariff (BCT) funding for MM1 non-specialised services reduced by about $31 per bed per day with the worst offenders receiving nothing. 

While Mr Pascuzzi and TLC remain confident about compliance across its homes within the punitive-free timeframe, he fears that other metropolitan providers will depend on more agency staff or rush to bring in inexperienced workers. 

This could result in a moderately qualified industry where only 20% of direct care workers are bachelor-qualified RNs. Another concern is that the current funding levels for providers operating with a dated nursing home model are not conducive to rising operational and wage costs. 

Soaring agency expenses and the unavoidable burden of workforce on-costs are key factors he expects to hinder workforce spending.

“The Prime Minister Anthony Albanese made an election promise to fully fund any aged care wage increase initiatives his government would introduce during his term,” he added.

“The first determination last year (15% wage increase) the Labor government only funded 50% of the on-costs, with the balance borne by the aged care providers. This was a broken election promise that flew under the radar.

“With the second determination which is to be applied from January 1 this year, the government advised providers they would only fund 25% of the on-costs, leaving providers to cover 75%. This is a significant cost to providers they weren’t expecting and will have future material cost implications on the industry.”

Mr Pascuzzi expects the Australian Government funding well to dry up in the coming years. He views the recent investments as a necessity to avoid sector failure and said the move to increase revenue through consumers is a sign the government is closing the funnel. 

“If we’re political, it’s all about how we win the next election. The current government professes it’s spent the most on residential aged care of any other government. If it wasn’t for the neglect of aged care funding over the last 40 years, they would not have been in a situation where 60% of aged care providers were making a loss, forcing them to make the immediate increased investment,” he said.

“A government can’t afford aged care to fall over. If it didn’t do anything, Labor would have faced political suicide in the upcoming election. Therefore, it didn’t matter what government held office over the last three years.

“They would have been forced to circumstantially make the same investment to avoid a significant level of provider insolvencies and protect the circa $30 billion of government-secured Refundable Accommodation Payments (RADs) in the system at the current time.”

Breaking the shackles 

Despite concerns about workforce regulations that are not fit for purpose, Mr Pascuzzi recognises that the government has good intentions. However, as he put it, it is ‘trying to improve care in a nursing home model environment that doesn’t work anymore’. 

It’s safe to say that TLC broke away from the shackles of an institutionalised nursing home model long ago.

The organisation provides a highly ambitious integrated care model where its facilities deliver a combination of services owned and operated by multiple internal divisions: TLC Aged Care, TLC Medical Centres, TLC Early Learning, TLC Health Clubs and The Village Café. These services provide additional revenue streams by servicing residents and local communities in one intergenerational precinct 

On-site GPs, geriatricians and cardiologists pay TLC a fee to use TLC’s community Medical Centres and TLC’s employed nursing, administration and allied health staff where they can service as many community clients as they like.

However, there is an expectation that residents of the co-located residential aged care home receive priority care and are supported, including after-hours access, avoiding the use of locums.

TLC GPs also manage care plans, providing residents with a complete continuum of care. The cross-pollination of community and internal clients means TLC doesn’t have to charge residents additional fees, something Mr Pascuzzi intends to maintain despite the government’s shift to increased consumer co-contributions. 

“Our model of care promotes a better quality of living in the long-term whereas, charging residents untenable co-contributions may result in a lack of affordability. Residents would then avoid using these services simply because they can’t afford it which can compromise their quality of life and lead to premature death,” he said.

“Whether they can afford it or not, people will be paying a lot more for residential aged care as of July 1, 2025. Isn’t that criminal? We are a first-world country, why should we be going without critical services based on affordability? And why, in one of the world’s highest tax-paying countries, must we continue to pay for aged care in our retirement? 

“Healthcare needs to be humanistic and apolitical. That’s the only way we can get sustainability into the industry and provide people with the level of care they need that’s not unaffordable.”

TLC’s internal registered training organisation (RTO) also allows the company to directly train personal care workers. Meanwhile, a new deal with the Department of Home Affairs will bolster TLC’s sponsored worker cohort to 150 people across 12 locations. 

These sponsored workers are RNs in their countries of origin, meaning residents still receive a higher level of care through their appointments as PCWs in Australia. Mr Pascuzzi said, “Our RTO and Sponsored Worker program was the primary reason TLC hasn’t engaged agency staff for the last eight years and is the main vehicle that will support TLC’s future care minute compliance.

“The problem with residential aged care providers operating the dated nursing home model is that it only focuses on the people who are living in it. Sustainability and the ability for that site to be commercially viable were capped at those residents and that single service,” he said.

“If you broaden the service mix of these sites, you’re bringing the community in by providing concentric diversified services that relate to aged care, but also provide other revenue streams, which maximises the validity of the sites to the broader community, promotes sustainability and deinstitutionalises aged care.”

The new normal

TLC’s Mordialloc site is a prime example of its integrated care model and the new normal for the Melbourne-based provider. It features all TLC divisions on-site and from here on, its new developments will at a minimum have a 150-place residential aged care home, 120-place early learning centre, 1,000-member gymnasium & aquatic centre, six-person full-time equivalent GP medical centre plus a commercial bar and café.

There is more to come, too. TLC’s Hallam site will be revamped as a mammoth 270-bed aged care home alongside a 200-place early learning centre, a 2,000-member gym & an indoor sports facility and expansion of its current community Medical Centre. 

A co-located three-theatre day surgery will be the pièce de résistance. Residents requiring acute care from any TLC home can access the day surgery, promoting an even more robust continuum of care. 

The first-of-its-kind development is a milestone for aged care. It’s one Mr Pascuzzi is proud to deliver. He even believes other providers could follow suit, although regulation can always be a project-killer.

“I’m concerned that the delays, red tape and bureaucracy around council town planning processes, coupled with the tussle between state government planning departments and council town planning departments, will prolong development timing,” Mr Pascuzzi said.

“In some cases, this may result in providers walking away from critical service developments like these, which are motivated to support the multi-level integrational changes most Australian communities will experience over the next decade.”

While there are still hurdles to overcome, Mr Pascuzzi is ready to tick all the boxes the government asks him to despite having to spend more money to align with the regulations. He hopes the government recognises that dictating care is dangerous and that providers are at risk. 

“Our challenge over the next 12 months is to maintain all of TLC’s unique integrated in-house services so our residents do not go without and still get the level of care they deserve and need relative to their acuity,” he said.

“I will tick the box and comply with what is clearly a flawed, restrictive, government-imposed care minute definition, but I’ll tell you what, that money could have been better spent elsewhere, like higher qualified care and services that residents actually need.”