By Derek McMillan, Managing Director, Seniors Living Strategies 

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The demographic shift is now upon us and it has been compounded by the social changes of our times.

People are having fewer children, later in life, and are living more remotely from their parents than ever before.

The capacity for families to provide informal care has diminished at the same time as society’s expectations of what comprises a “good life” have increased.

While Consumer-Directed Care as a philosophy is laudable, the desire by the Commonwealth to control access to services has resulted in a poor implementation of this much needed reform. 

It is a shame that access was not highlighted within the terms of reference.

With the government limiting the supply of aged care beds and aged care packages, it creates an environment where consumers can’t punish poor providers.  In addition to the very real, human consequences of service denial, surely nobody believes that capping aged care beds and home care places improves care quality?  

Eligibility for services is already established through ACAT assessments.

The complexity of the system, Byzantine means-testing and co-contribution requirements, limited mobility in funding and supply constraints together give rise to consumers having too little power, too little choice and insufficient competitive tension in the marketplace.

It is only when supply exceeds demand that the poorest operators will lift their game or leave the sector.  There is nothing so powerful as declining occupancy to drive changes to the benefit of consumers.

The Royal Commission will investigate why in residential care do we have a poorly paid workforce, inadequate staffing and in too many instances, poor resident quality of life.

It is because as a society we have not faced into the true cost of care.

There is not one provider who would say that they couldn’t create improved outcomes for residents with more funding.  And the commentary advocating no profit in aged care is a nonsense. 

No profit leads to no investment, with the consequence of terrible outcomes for residents as the system fails, until ultimately, we have a nationalised aged care system.

What government wants to add the capital costs of building an aged care system to the recurrent funding they already provide?

And which consumers want 1,000 Oakden’s operating around Australia?

We know a royal commission into today’s systems will find policy inadequacy because every government this century has commissioned multiple reviews all landing on the same outcome – that there is an aged care system which needs to be re-imagined with the capability to straddle the health/social care divide and formal/informal care divide.

Thankfully, the Royal Commission has been directed to explore innovative models of care and interfaces with the healthcare system.

But we shouldn’t limit our thinking to the best of today, as governments need to look beyond siloed, input financing as their true north, but rather towards outcome financing, where prevention is rewarded and the benefits of being at home and in a facility can be reconciled in new ways.

There is no doubt that taxpayers and consumers are going to be asked to pay a lot more for aged care in the future. Successive governments have not had the courage to address this with Australian voters. But a Royal Commission, exposing the weaknesses of the current system, has half a chance to do so.