Royal Commission Thursday wrap up – pricing, providers, assessment and care planning

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Thursday marked another big day at the Royal Commission into Aged Care Quality and Safety, so we thought it’d be useful to provide a run down of the key takeaways.

Limiting providers returns will turn away investors

The former Chair of the Aged Care Financing Authority (AFCA) Mike Callaghan was one of the key witnesses at Thursday’s hearing, and he warned reforms should not limit providers’ ability to attract the capital required to be sustainable into the future.

“When income from the Government makes up well over 65% of the income of providers, when that is frozen and also there’s changes that are going to limit the growth in that income and that, at the cost side of your main area of cost is staffing and staffing is going up at considerably higher level than once you’ve frozen what your income level is, there’s a clear margin squeeze takes place there,” he said.

Any pricing regulator would require a clearly set objective

Mr Callaghan agreed with the idea of establishing an independent Aged Care Pricing Authority as one way to resolve tension between the Government and provider.

But this is easier said than done, and (in his personal view) the objectives of such a body would need to be clearing defined, with the consultation of providers.

“It’s not a simple matter, however, for the Government to set an appropriate overall price for aged care services that avoids over-generous support for inefficient providers and does not provide a rate of return greater than that necessary for providers to maintain their involvement in the aged care industry,” said Senior Counsel Assisting Mr Gray, reading from his statement.

“I think it’s ensuring that you have an appropriate price for what the Government is going to subsidise – what the aged care services the Government is subsidising but the other integral element of it is that the Government has confidence that in the assessment of who is getting that subsidised need, they really do need, and get that need,” Mr Callaghan added.

Assessment and care planning more important than individual budgets – Professor Kathy Eagar

The Director of the Australian Health Services Research Institute (AHRSRI) who wrote the Commission’s first research paper into staffing levels, also appeared and argued individualised assessment and care planning was more important than having an individualised budget.

“There is an assumption, I think, in some of the propositions that were presented at the home care hearing that every person wants consumer choice and I have absolutely no problem giving people consumer choice to the extent that they actually want it,” she stated.

“I have a problem assuming that choice is so good for you that you have to have it whether you want it or not.”

We’ve covered the full day’s hearings in The Daily COMMISSION; click here for more information.


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