Grattan Institute says home care providers are “gaming the system”

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The independent thinktank claims the current funding system for Home Care Packages is inefficient and being ripped off by opportunistic providers.

Its latest Health and Aged Care Report ‘Unfinished business: practical policies for better care at home’ claims the home care system is inefficient and Home Care Packages “deliver relatively low levels of low complexity care at high cost.”

It took data from the Federal Government’s My Aged Care website, dated 2018-2019, and stated:

“The four-level classification scheme for Home Care Packages is only loosely related to the actual costs of providing care. This allows providers to pad out their costs and game the system. Providers can charge flat fees for administration, coordination, and package management, regardless of the level of service actually provided. Consumers can pay unacceptably high administrative fees that reduce the amount they can spend on actual care.”

The Grattan Institute found administrative and management costs were about a quarter of the total allocated for a home care package, regardless of the level of service delivered.

“Older people should be able to get home and community care when they need it. Cost and efficiency should be managed through effective system stewardship, not crude cost-capping and rationing,” the report stated.

However, as we have reported, the Commonwealth Department of Health has already moved to payment in arrears from 1 September to claw back over $1.6 billion in unspent funds from home providers.

The Department has also introduced home care assurance reviews targeting around 500 home care providers a year – over 50% of the sector – from November, looking at a range of issues including the use of home care subsidies and home care recipient charges, the nature of home care services, and provider’s dealings with home care recipients.

The changes come ahead of the new Single In Home Care Program being rolled out under the Royal Commission reforms – which will likely see the current system scrapped.