Six key takeaways from the Royal Commission’s Final Report – less fiery language, more stick, and workforce a challenge to five-year timeline

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With five volumes and over 2,800 pages of recommendations and findings, ‘Care, Dignity and Respect’ is not a straightforward read – but there are several key points that aged care and home care operators should take away now.

What is perhaps refreshing is the early sentiment voiced by Commissioner Tony Pagone QC that the Government’s lack of funding is a central cause of the quality and safety issues in Australia’s aged care system.

“The move to ritualistic regulation was a natural consequence of the Government’s desire to restrain expenditure in aged care,” he writes. “In essence, having not provided enough funding for good quality care, the regulatory arrangements could only pay lip service to the requirement that the care that was provided be of high quality.”

1. The Final Report offers less fire than the Interim Report – but doesn’t shy away from slamming the Government and providers.

Unlike the Royal Commission’s Interim Report – released in October 2019 and titled ‘Neglect’ – the Commissioners appear to have taken a more conciliatory tone.

The language is less inflammatory – Commissioner Pagone prefaces his section – titled ‘What is to be done?’ (compared to ‘A Shocking Tale of Neglect’) with a Tennyson poem.

However, he concludes bluntly that the current aged care system is a result of “weak and ineffective regulatory arrangements” and successive Governments’ decisions to reign in aged care spending (see quote above).

Aged care system “unacceptable and unsustainable”

Commissioner Lynelle Briggs AO is also characteristically critical, labelling Australia’s aged care system as unacceptable and unsustainable in its current form.

“The responses by successive governments have failed to tackle the underlying problems. The condition of the Australian aged care system is the responsibility of us all. Governments, providers, taxpayers and the community at large must all take some responsibility for dodging the issue and leaving aged care to decline into the parlous state that it is in today.”

The focus however is on optimism for the future.

“Equally, we must all take responsibility for fixing it,” she goes on. “It is only by taking collective responsibility that we can all move forward together and do what needs to be done. This will require sacrifices on all our parts.”

2. The split between the Commissioners – while not ideal – is not the end of the world.

As we reported on Monday, Commissioners Tony Pagone QC and Lynelle Briggs AO have agreed on a number of recommendations, but split on several major reforms including oversight of the sector and funding.

Commissioner Pagone outlines his three key building blocks for reform as:

  • a rights foundation for high quality aged care
  • independence from Government
  • a secure source of funding

But Commissioner Briggs has backed the Department of Health to retain aged care.

Recommendations quite specific in their nature

But a closer reading of the Report indicates that both Commissioners have been quite specific in their recommendations and how they should be implemented – a clear attempt to ensure the Government and aged care providers have no excuses not to follow through.

“I have gone to a greater level of detail in my recommendations because without clear direction from the Royal Commission, I am not confident that the necessary level of reform will actually be implemented,” Commissioner Briggs writes. “All too often, the Government and the aged care sector have avoided change and hidden their poor performance, and we cannot allow that to continue.”

Will this level of detail provide enough guidance for the Government to decide to implement at least one of the options regardless?

3. More carrot – but a lot more stick for aged care and home care providers.

While the recommendations offer a number of incentives for providers, these are tied to increased compliance and prudential regulation that is likely to have a significant impact on day-to-day operations.

A number of recommendations provide for increased funding including an increase in the Basic Daily Fee, amendments to the Viability Supplement and indexation arrangements for residential and home care and immediate funding for education and training to improve the quality of care.

There are also incentives for operators that take an enablement approach to residential care plus capital grants for ‘small household’ models of accommodation.

More costs – a general, statutory duty to apply to all providers

But the requirements – and the costs – for operators will increase considerably under the recommendations, with a general and statutory duty on any approved provider to ensure that the personal care or nursing care they provide is of high quality and safe.

Recommendation 68 recommends universal adoption of digital technology and My Health Record by the aged care sector – that will likely mean new systems and processes for many operators.

Operators will need to collect data on more quality indicators, staffing hours and expenditure and meet more stringent financial reporting requirements.

Graded assessments and performance ratings against the Quality Standards will also be used to create publicly available star ratings.

These additional demands will extend to senior management with boards and directors required to have leadership and clinical experience and attest to the services their organisation provides.

4. No final figure on the costs of the recommendations – but Royal Commission research say billions more will be needed.

The Report does not outline how much the recommendations will cost.

Social media compared the $452.2 million in funding announced by the Government on Monday as its interim response to the $500 million being spent on the renovations to the Australian War Memorial.

But the measures announced by the Government on Monday are clearly a ‘stop-gap’ until the Government responds more comprehensively in the Budget – and the final price tag can be expected to be eye-watering.

Grattan Institute estimates extra $7.6 billion a year needed to fund system

Prime Minister Scott Morrison states that the final figure is yet unknown.

“The Royal Commission doesn’t know what the answer as yet,” he said. “And what the Royal Commission has found is that is an assessment that has never been undertaken based on a needs-based model.”

But there was an indication of the expected cost in the Royal Commission’s 11th research paper on the future impact of aged care reforms published last year. It forecast that aged care expenditure would increase to $171 billion in today’s dollars by 2050 – 30 years away.

In more realistic terms, the Grattan Institute’s Dr Stephen Duckett estimates an additional $7.6 billion in annual funding is needed for the aged care sector to provide high-quality care.

5. Aged care levy on the cards – but will future generations be willing to fund the Baby Boomers?

While the Commissioners have disagreed on how it would be implemented, they have settled on an aged care levy as the ideal solution to help fund Australia’s future aged care system.

Commissioner Pagone recommends a hypothecated levy, with the money to go solely towards aged care funding and run up to 5% for high-income earners.

In contrast, Commissioner Briggs recommended a non-hypothecated levy of 1%, which would go into general Government revenues – which would bring in around $10 billion annually based on the Grattan Institute’s modelling showing a levy of 0.5% would create around $5 billion in revenue.

Both Commissioners point to their own research that showed there was a reasonable level of support for higher taxes to achieve high-quality aged care.

“In particular, a study conducted by the Caring Futures Institute for us asked respondents to the survey whether they thought that the Government should spend a greater proportion of taxpayers’ dollars on aged care than the current 4% of tax collected and less on other public services,” states Commissioner Pagone. “In total, 59% of respondents agreed with this statement and only 9% disagreed.”

But will taxpayers really be willing to foot the bill for older generations – and will the Government embrace the idea?

Governments don’t want to ‘shake down Granny’

Catholic Health Australia CEO Pat Garcia made the point in a piece for the Fin Review this week that a 1% income tax hike works out at around $750 a year for the average wage earner – a considerable amount.

But historically Governments have been reluctant to change means testing arrangements to charge older Australians more for aged care services.

“No treasurer wants to be caricatured as shaking down grandma for her home,” he writes. “Indeed, it would require a titanium political spine to even countenance it.”

Evidence at last year’s funding and financing hearing from witnesses was that the Governments have also been unwilling to impose levies – and the PM ruled out a plan to raise the Medicare levy and pay for aged care costs at the time.

On Monday, Mr Morrison was less committal, saying he was open to the idea – but tempered expectations that it would find Government and bipartisan support.

“As Treasurer I once sought to increase the Medicare levy by half a per cent to provide support to the National Disability Insurance Scheme and I wasn’t supported in that by the Labor Party, or the Greens for that matter. So that’s something that I’ve seen in other contexts that the parliament hasn’t supported before. So, you’d forgive me for being a little wary at this point.”

That leaves the question of long-term funding still wide open.

6. The Government labels the five-year timeline “achievable” – but much will depend on workforce.

Health and Aged Care Minister Greg Hunt agreed at Monday’s press conference that the Commissioners’ five-year roadmap – while  “ambitious” and “challenging” – is “achievable”.

However, the PM suggested that the scale of the change will take “quite considerable time to achieve” – particularly when it comes to recruiting and training personal care workers.

“We cannot just take people off the streets and put them into people’s homes and ask them to start caring for people,” he stated. “That would be irresponsible. If someone is going to go into someone’s home or go into the room that they’re living in in a residential aged care facility, we cannot compromise on the standards that should be there for those workers to be able to provide that support.”

He made the point that the Government is already rolling out Home Care Packages at a rate of 1,200 a week to the end of the financial year – a considerable number to service.

The Government’s interim response has singled out workforce and home care as two of its five pillars (the other being quality and safety, services and sustainability, and governance).

But again, it comes at a cost – and a need to raise the value of aged care work in the eyes of the community.

Commissioner Briggs recommends a $100 million a year Aged Care Workforce Fund that can be used to support training, clinical placements, scholarships and other initiatives.

The Final Report also recommends a national multimedia campaign aimed at raising awareness of career paths and opportunities in aged care to start by 1 July 2022.

Will it ensure the Commissioners’ five-year timeframe is met?

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About Author

Lauren is the Editor at DCM Group and has guided its range of media including The Weekly SOURCE, The Daily RESOURCE and The Donaldson Sisters since 2016. With 13 years’ experience as a journalist, editor and commentator, Lauren is the only journalist to have attended every session of the Royal Commission into Aged Care Quality and Safety, producing 300 issues of the subscriber-only The Daily COMMISSION which offers exclusive insights and analysis of the issues surrounding the Royal Commission and the aged care sector.