Following its ‘Perspectives on the future of ageing and age services in Australia’ report published in September last year, the accounting and advisory firm has released two more reports to the Aged Care Royal Commission on transforming and funding the future aged care sector – and they contain some interesting points.
The September report had called for a radical resign of the system and an immediate evaluation of the sector’s viability, including the separation of funding for accommodation and care – an idea considered and dismissed by Counsel Assisting at the Royal Commission earlier this year.
The new findings – based on workshops with CEOs from providers from LASA, ACSA and the Aged Care Guild held in March this year prior to the COVID-19 lockdown measures – take these calls for reform one step further.
As with last year’s consultation, Grant Thornton says there was “some disagreement” about the ideas and pathway forward.
The 33-page ‘A Model for Transformation and Governance’ report argues for the 2016 Aged Care Roadmap to be “substantially updated”, laying out a three-stage approach for transformation – with different funding arrangements for each stage.
- A remediation phase that would rationalize the sector with an oversight committee appointed and a rationalisation program established that would create incentives for providers who wish to leave the sector, but can’t because of economic or legal liability barriers. It would also provide support for independent evaluation of organisations to determine if they have the capability to remain viable in the longer term, plus provide funding for organisations that sign up for the rationalisation program and develop and test funding models to ensure the sector’s future sustainability.
- A transformation phase where the major changes would take place based on the outcomes of the Royal Commission and subsequent Government responses. This would see the new funding models implemented and new monitoring and reporting protocols and frameworks established, and;
- An embedding phase which would focus on sustainability, with a period of oversight to ensure that planned transformation outcomes are met and the long-term viability of the sector is guaranteed.
While the approach sounds like it is ‘weeding out smaller operators’, the report maintains there will be a place for all size and business models and while bipartisan political support for the plan will be hard to achieve, it notes it was done to push through the Living Longer Living Better legislation.
It also makes a strong argument for the ‘disentangling’ of care and accommodation in both residential and home care and uncapping supply on aged care services based on a needs-based services model.
A separate 42-page ‘Funding Options’ report identifies six ‘stimulus’ areas that could support the transformation that it states combined could provide real sustainable change.
- Employment stimulus: to increase the workforce e.g. salary sacrificing, alternatives to salary packaging etc.
- Retiree stimulus: to incentivise those who can afford it, to contribute more to their accommodation and care e.g. lump sum contributions for aged care needs, aged care super accounts, negative mortgages, uncapping income tested fees.
- Provider stimulus: to directly incentivise providers to deliver better quality services e.g. payroll tax exemptions.
- Industry rationalisation stimulus: to incentivise provider rationalisation to prevent market failure e.g. exemptions from transfer duties on land for approved aged care developments, CGT relief on transfer of aged care assets etc.
- Investment stimulus: to incentivise the development of new facilities and models of care e.g. capital investment bonds, social impact bonds etc.
- Government stimulus: options for funding aged care services and meeting community expectations into the future, e.g. a universal aged care levy similar to the Medicare levy, GST and rate reforms etc.
You can download both reports here.