Report on ‘completely different way to fund’ residential aged care released

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The study from the University of Wollongong (the Australian National Aged Care Classification) addresses the need for a more efficient funding tool that will ensure greater financially stability for the sector.

The Morrison government commissioned the study to inform the development of a new funding model, and the system proposed by the University is a “completely different way” of allocating funding to the ACFI – which the report says is “no longer fit for purpose”.

The Government has also announced $4.6 million more funding for a trial.

The key change in the University’s recommended funding structure is a new payment model with two elements. Standard per diem (‘fixed’) care payments to cover the costs of providing the care that all residents receive equally, and a ‘variable’ payment covers the costs of individualised care for residents.

The report proposes a ‘staged approach’, with changes expected to take 18 to 24 months – a period which will include refinements to the current ACFI assessment instrument.

You can read the University’s full recommendations for the new funding model here.