Star ratings set to be a game-changer for residential care sector – and now just five months away

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Already impacted by COVID-19, falling occupancy and the negative impact of the Royal Commission, residential care operators will face yet another challenge by the end of 2022 with the Federal Government adding the Royal Commission’s recommendation for star ratings to its second aged care bill this week.

Fulfilling its promise to put aged care on the political agenda, the new Labor Government has returned the Aged Care and Other Legislation Amendment (Royal Commission Response) Bill 2022 to Parliament as well as introducing its own Aged Care Amendment (Implementing Care Reform) Bill 2022 covering some of its key election commitments – see the story here.

You can read the detail on star ratings on page 31 of the Bill here.

Under the legislation, the Secretary must publish information about the quality of aged care in the form of one or more star ratings – and can use protected information to calculate the rating, though not personal information about an individual.

There is no argument that performance ratings can deliver insights into the quality of a service – but the current makeup of the ratings is likely to prove a blunt instrument.

As we reported last week, operators will be rated in four key areas:

  • The five existing quality indicators (15%)
  • Service compliance (30%)
  • Consumer experience (33%)
  • Staff minutes (22%)

Many operators have already indicated that they will fall short on their direct care minutes when AN-ACC is introduced in October, which will see them marked down.

The current staffing requirements – which don’t include Enrolled Nurses or lifestyle and allied health staff – could give providers a perverse incentive to roster on more RNs and personal care workers to boost their ratings.

The clinical indicators information is also open to interpretation, as the data does not account for the case mix of the facility; for example, if a facility has more residents with mental health conditions, that would require a higher use of psychotropic medication.

Yet the star ratings are likely to play an important role in the decision-making process for consumers in a society that is now very accustomed to a “TripAdvisor” culture.

You must ask the question: how many facilities – if any – will be rated “five stars”?

And will families want to place their loved ones in a home with a one- or a two-star rating?

The answer is no – and that will place further pressure on providers’ bottom lines.

Is further consolidation of the residential care sector the inevitable outcome?