Aged care system must move to ‘user pays’ and competitive marketplace to achieve “fundamental redesign” put forward by the Royal Commission

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Wednesday’s community forum in Newcastle saw Commissioner Lynelle Briggs (pictured above) make a number of comments on the direction of the Royal Commission – including a promise to overhaul the system within three to five years – that I felt are worth touching on again.

See her comments and my analysis below:

CEOs and boards need to drive the reform of the sector:

“We do intend quite significant changes and without the support of the leaders of organisations, they won’t go very far.”

“We’ve got to look at how we engage with CEO and board levels,” she said firmly. “Everyone has to come together and say we need to fix it.”

Home care needs to expand significantly:

“The problem is the long waiting list hadn’t gone away and won’t without a large injection of funds into the sector and more providers and people willing to provide services,” she said.

“There is a question about upper package limits and whether it’s sufficient. That’s something we’re definitely thinking about as we go forward.”

The system needs to be focused on ‘care’:

“In this system, there are a lot of language challenges for me… going to the toilet as toileting… nursing home as facility…person-centred care reduced to a three-letter acronym. These things really worry me because they take out the focus on the person and think about the process.”

“The [Aged Care] Act is really not focused on people and the systems should be focused on the people in addition to the funding arrangements.”

“Inadequate funding… we’ve heard nationwide should be focused on care and care is the business.”

The sector needs more staff and higher wages:

“Staffing inadequacy and shortfalls in wages… certainly wages in this sector are low. There are some real issues here when we know the complexity of care needs is increasing.”

“There is insufficient staff to the growth in demand for aged care services. We need a sizable growth in the workforce in the field. People are what runs this system and we have got to find a way to look at increasing supply.”

Complaints need to be treated seriously:

“Across aged care, banking and indeed the public service where I used to work, people are reluctant to treat complaints seriously. We need to welcome them as needed to making improvements.”

“Families should be able to say there are issues here we need to address without fear of retribution. It all comes down to accountability and internal mechanisms.”

‘Touch’ essential to care

What can we take from the Commissioner’s remarks?

Firstly, the Commission recognises the home care waiting list won’t disappear without a significant funding injection from the Government – and that includes expanding the workforce as well as the amount of funding provided in packages.

Secondly, the language that concerns the Commissioner comes from the traditional nurse-led model of residential care – nurses run medical facilities and therefore use medical language.

But is an aged care home a medical institution or a place where people go to live?

As my colleague Jill Donaldson, an aged care physiotherapist says, ‘touch’ is far more important to the consumer then regulations.

If we want aged care homes provide ‘care’, do we need to retrain nurses to become ‘carers’?

Thirdly, we must find a way to boost the workforce – since the Interim Report came out, which took a soft approach towards staff, I have noted less criticism of staff at the community fourms.

The negative media is unlikely to be driving people to want to work in the sector however.

Fourth, the issue of complaints often comes down to transparency – how do you provide a clear picture of your business to consumers?

A star ratings system is a viable and obvious option here.

Providers need a guarantee from Government

Finally, the Commissioner confirms senior management needs to be engaged in the reform process.

This requires CEOs and boards to be looking forward and optimistic for the future – but what tools do they have to make that happen?

See IRT CEO Patrick Reid’s comments from last week’s newsletter that it is a misnomer the Government provides the bulk of funding – he says the amount they receive is at 60% and dropping.

All of the resources that providers have to change the system – the ability to move to a different funding model, pay higher wages, introduce new models of care – depend on the Government.

They are totally hamstrung – unless the Government makes a statement now that all of these reforms are on the table.

We would start by putting two items on the table: cutting regulations and paperwork for the sector and increasing the amount people must pay for care.

It is clear that if the public wants greater ‘touch’, higher staffing and workers who have the empathy to provide ‘care’, there needs to be a ‘user pays’ system and a competitive environment.

Think about it. I know the aged care provider XYZ charges 10% more than others – but they offer all of these services that I want. If they don’t meet my needs, I can take my business elsewhere.

Take the home loan system as an example. Previously it was difficult to move your mortgage to another bank – then the Government changed the rules to make home loans easier to move.

Customers who didn’t like how they were treated or the fees they were charged took their mortgages elsewhere.

Educate the public on ‘user pays’

People need to be prepared to fork out ‘pain money’ – and that means educating the public that they will need to pay for care and explaining the benefits of an environment where they have more control.

Moving to a true marketplace would also have other benefits. Providers who fail to meet standards would find themselves without customers – and forced to exit.

CEOs and boards would also have to do as the Commissioner wants and take complaints very seriously.

While the assessors and regulator visit services several times a year, residents and families are ‘auditing’ services 24/7 – especially if it’s their money.

I would go back to the point from Estia’s full year results presentation that a 1% change in their occupancy rate is worth $5 million.

That means they must respond to complaints quickly – but if they invest in staff to provide ‘care’ and increase occupancy by 1%, that’s $5 million in the bank.

It’s also a strong argument against the idea that providers – For Profit and Not For Profit – shouldn’t make profits because if they can’t make profits out of ‘care’, what will drive them to try harder and allow them to invest in new and better care services?

And if those profits are being made directly from consumers – and not government funds – there is no issue.

Do you agree? What do you make of the Commissioner’s comments?