People before profits: Senior Counsel says no excuse for providers and boards to not provide care – even if insolvent: what were the key themes from the Hobart hearings?

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To say there was a lot to take away from last week’s hearings on leadership and governance would be an understatement.

Here are the key themes I have identified:

  • The need for ‘care’ to come before financial viability
  • The possibility of limiting of profits for aged care providers
  • The need for boards to have greater responsibility and accountability for quality of care
  • The need for providers to do regular ‘health checks’ of their organisations to provide more transparency
  • The need for boards to have a wide range of skills, backgrounds and experience
  • The importance of clinical governance structures – that work
  • The need for enough staffing and time for ‘care’
  • The importance of organisational culture – and the responsibility of providers to train facility managers
  • The need for good communication – at all levels
  • The need for good complaints handling processes – including a publicly available complaints register
  • The need for a new funding model that provides for ‘care’ – and more regulatory oversight of providers’ spending

See my full analysis below:

The need for ‘care’ to come before financial viability:

Perhaps the most important point to come out of last week – and one that raises a serious conundrum.

Senior Counsel Assisting Peter Rozen QC (pictured above) said it was clear financial considerations were prioritised at both Southern Cross Care (Tas) and Bupa South Hobart at the expense of care.

The Senior Counsel concluded while providers are legally obligated to stay financially viable, he said it must be remembered that “financial viability is a means to an end in aged care; it is not an end in itself”.

Consider what he is saying: boards have a responsibility to trade solvently, but the Royal Commission has also pinpointed boards are ultimately responsible for ensuring care is provided – even if they don’t have the money.

Will future board members want to take on this responsibility?

The possibility of limiting of profits for aged care providers:

Another key issue that ties in with the point above.

Commissioner Lynelle Briggs (pictured above) made it clear that providers are paid by the Government to provide quality of ‘care’ – without exceptions.

“There are horses for courses in terms of expectations around organisations that are receiving sizable amounts of Government money, I think,” she stated.

The Commissioner also asked former SCC (Tas) Finance Director Andrew Crane straight out if he thought the profits taken by providers should be limited.

Mr Crane replied there needs to be a method that takes community expectations into consideration.

“I think that’s where the legislation comes into it,” said the Commissioner.

Again, how realistic is this – and who would want to provide care without a profit? Even Not For Profits still adhere to the old ‘no mission without margin’ philosophy.

The need for boards to have greater responsibility and accountability for quality of care:

A finding that appears much more likely to see the light of day.

The Counsel Assisting team tested several propositions throughout the week around the role of boards including:

  • Boards to attest to the standard of their services
  • Boards to have a formal duty of care to residents when making decisions
  • Boards to have a duty to inform themselves on quality of care issues

Like the above, this could be hard to implement in reality – directors already have obligations under workplace health and safety laws.

But several witnesses agreed there was room to add these requirements.

“That that might be something that’s currently available but it’s not actually being used,” Catherine Maxwell (pictured below), the General Manager Policy and Advocacy at the Governance Institute of Australia said. “Certainly, look, it would be worth looking at for the sector, provided it’s appropriately tailored to the sector.”

Commissioner Tony Pagone was also in favour.

“It’s agreed you should do it, it’s essential you do do it, well, shouldn’t it be in the regulations?” he told SCC (Tas)’s former and current Chairmen Ray Groom and Stephen Shirley.

The need for providers to do regular ‘health checks’ of their organisations to provide more transparency:

Another more realistic idea the Commissioners could take up in their Final Report.

Commissioner Lynelle Briggs said her experience over the past year has taught her how easy it is for an organisation to fall into “disrepair” – and she sees a place for organisations to go through a rigorous process of either internal or external review about their performance against the standards and the expectations under the Aged Care Act.

Commissioner Tony Pagone suggested a third-party auditing process like the one for big corporations where they receive a detailed management report.

Again, Ms Maxwell agreed this was good practice.

“I think that’s worth doing,” she said. “You look at your constitution every couple of years and then other governance documents on a – possibly, two-yearly cycle of review so that you’re constantly looking at something that you’re doing with a view to making it better.”

The need for boards to have a wide range of skills, backgrounds and experience:

An issue that has come up at previous hearings but was underlined in Hobart – particularly by the revelation Bupa’s aged care board was only made up of members of its executive until August this year.

The Counsel Assisting highlighted the need for boards to have members from a diverse range of backgrounds – especially clinical care – and for the Department of Health to potentially assess the mix of skills and training of board members when making decisions on whether they should be approved as a provider.

Ms Maxwell also cautioned the Commission against board members serving for longer than 10 years.

“Why is it too long?” Mr Rozen asked. “That’s a little counter-intuitive in some ways, because they would have…”

“They would have a very deep knowledge of the organisation, but I think they get too close and because – a very important quality that a director should bring to a board is independence of mind and independent thinking and the ability to exercise oversight and to think strategically,” she said. “And if you’ve been with an organisation for 20 years, it’s going to be much harder, to think in a fresh way about what’s coming and about issues.”

The importance of clinical governance structures – that work:

A constant theme at the hearings.

The Southern Cross Care (Tas) case study was a lesson in why providers need a clinical governance framework.

The failures in care at its Yaraandoo Hostel and Glenara Lakes facilities were both shown to have resulted from a lack of policies and procedures for facility staff; limited information being passed up to the executive level and the lack of a clinical governance committee to look at the results from its care audits – its clinical governance committee is only being established later this month.

In contrast, Bupa had a multitude of policies and committees dedicated to clinical risk, but the evidence demonstrated it fell down when it came to a practical application with their system of ‘mock audits’ only assessing facilities against the provider’s working instructions, not quality of care.

The Senior Counsel drew clear conclusions from both cases.

“The results of monitoring must consistently be taken into account and acted upon,” Mr Rozen said.

“Clear and accessible policies must be available to staff and they must be reviewed regularly and kept up to date.”

The need for enough staffing and time for ‘care’:

The direct experience witnesses all highlighted similar issues with insufficient staffing at both Bupa South Hobart and the SCC (Tas) facilities including carers taking a long time to respond to care needs and not spending enough time with their family members.

All agreed poor staffing was to blame – with carers overworked and underqualified.

However, the issue of attracting and retaining workers was also picked up on.

Bupa South Hobart’s former Nurse Adviser Tiffany Wiles revealed care hours at the facility had increased by 35 hours a day after the imposition of sanctions – but there were still not enough staff to fill the roles.

The Managing Director of Bupa’s parent Company Carolyn Cooper (pictured below) conceded to Mr Rozen’s point that a provider like Bupa couldn’t cut staff like it did as part of its ‘Pathway to Breakeven’ strategy without it impacting on the clinical care provided to residents.

Her suggestion? The regulator to keep a closer eye on rosters.

“I’m reluctant to say there should be more regulation than there is but there are – there could be opportunities to actually look at how people were developing the rosters,” she said.

The importance of organisational culture – and the responsibility of providers to train facility managers:

A further issue that keeps cropping up at hearings.

High staff turnover (or workplace ‘churn’) and poor culture was also flagged as a cause for the continued non-compliance at the facilities in the case studies.

“Culture became problematic in Bupa,” its former Head of Clinical Services Improvement Linda Hudec explained. “In that there was large – significant turnover of general managers and care managers. There were various restructures which made it difficult at times for people within the business to understand how to or who to report to and escalate up concerns that they might have had.”

Jo-Anne Cressey Hardy, the former Nurse Adviser/Administrator at Yaraandoo Hostel, also pointed to the issue of “churn” – where managers move around from facility to facility – as the main reason providers end up requiring her services.

“The role of a facility manager is incredibly onerous, incredibly wide in terms of its responsibilities. And there are – there is a need for people to be extremely well experienced before being placed in that kind of role. It’s a role where you need to be able to manage people. You need to be able to manage HR issues. You need to be able to manage rosters. You need to be able to manage finance. You need to be able to manage complaints. It’s – you need to be able to understand clinical issues.”

However, the Senior Counsel said the need to provide training for facility managers was an issue for providers.

“For our part, we consider the training of managers along with other employees must remain the responsibility of aged care providers themselves,” he stated.

The need for good communication – at all levels:

Poor communication between facilities and families – and from the facility level up to the executive – also came in for criticism.

Mr Groom (pictured below) had argued SCC (Tas) had “rigorous reporting processes” and “extremely good” governance in his time on the board – but he hadn’t received copies of the benchmarking reports of care at its facilities.

Two of its former facility managers also gave evidence that had never received the report – despite collecting the data for them.

The facilities in the case studies were also slammed for their communication with families. Merridy Eastman, the daughter of Bupa South Hobart residents, compared the then-facility manager’s email to the family to being “like we were on the same board as him and not a family of a resident.”

Mr Rozen said management need to set an example of positive culture by communicating with staff and residents.

“Ms Maxwell gave evidence about boards of aged care providers,” he added. “She emphasised the need for the skills of governing boards and observed that board education is necessary but is not being undertaken routinely. She raised concerns about how boards identify risks and make objective decisions.”

The need for good complaints handling processes – including a publicly available complaints register:

The direct experience witnesses were especially critical of how their complaints had been handled.

“There’s no transparency at the moment,” Ms Eastman said. “You write these emails to the manager and you get a reply and you don’t know who they’ve spoken to or when or what the outcome was. You just know that nothing much has changed.”

The consultants employed by Bupa to engage with families at its South Hobart facility said facilities need to be open and transparent and listen to complaints.

“I’ve been a complaints commissioner for many years, and I believe that a little complaint is a wonderful thing in terms of quality improvement, consumer complaints are a window of opportunity to improve your practices,” Wilson & Webster Consultancy Services partner Bethia Wilson AM Wilson said.

The Senior Counsel floated two potential solutions – a complaints register for facilities that is available to the public and a more transparent process around making complaints.

Ms Wilson said providers should always have a public complaints register listing the complaint, what action was taken and a six-month review of whether those improvements were maintained.

The need for a new funding model that provides for ‘care’ – and more regulatory oversight of providers’ spending:

Not a major issue at these hearings, but still part of the discussion because of its critical role in providing care.

Mr Rozen conceded the staffing cuts at both Bupa and SCC (Tas) were driven by legitimate funding concerns, but there were conflicting views on how this could be addressed.

SCC (Tas)’s ACFI Coordinator Andrew George-Gamlyn argued the ACFI model is “as good as it gets”.

“The issue, from my perspective, is the policing of the current system by the Department of Health. I think it’s inadequate and if it was done in a different way than it currently is, then most probably the opportunities to I guess claim things that you’re otherwise not entitled to would be better controlled.”

Mr Crane on the other hand said there is scope for a fixed component model with extra payments for care.

One thing was clear however: the Senior Counsel and the Commissioners agreed the Government should have more oversight of the funding paid to providers to monitor whether it is spent on care delivery.

An issue that the Royal Commission certainly needs to explore more when it finally addresses the financing of the sector next year.

Are there any other points that you would add?


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