‘Trust’ in both retirement villages and aged care is being undermined by Royal Commission – providers must be careful what you promise and then over-deliver to rebuild it, says expert panel

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With the focus on the 40-minute session on the impact for the retirement living sector, I questioned the panel – Anita Courtney, Principal at Russell Kennedy Lawyers; Patrick Reid, the CEO of IRT (and ex-CEO of LASA); and Rachel Lane of Aged Care Gurus (pictured above) – around four key issues: ‘trust’, profits, Home Care Packages and leadership and culture.

I made the point that consumers already have a deficit of ‘trust’ in retirement villages following the 2017 Four Corners retirement village investigation – and the Interim Report backs this idea that structured accommodation is not what the glossy advertising presents it to be.

Given the lack of distinction between retirement villages and aged care – as seen during the reporting on Earle Haven this year – this is a major problem.

IRT were one of the few operators to actually increase their village unit sales post-Four Corners – and Patrick agreed they have worked hard to counter that loss of trust – particularly with staff.

He made the strong point that positive staff reestablishes ‘trust’ faster than any other action and was a major focus for IRT.

This bubbled on to residents and families.

Being open and transparent was next – and being a Not For Profit having the benefits of existing six-monthly buybacks made this a non-issue.

Anita made the point that she has seen little evidence that the new Aged Care Quality Standards or amended principles on restraints are working to improve trust.

Rachel made the great argument, based on her financial advice business across Australia, that today people start with this low quota of trust, so don’t promise what you can’t deliver – instead she advised clearly stating what you will provide and then aiming to over-deliver to ensure that you don’t lose the trust of your customers.

The message was: once trust is lost, it’s very hard to get back so do your best to maintain it. This is 101 I would assume, but needs restating.

People before profits?

The other major issue I raised with the panel was the conclusion from the Interim Report that aged care is about transactions, not relationships or care. Last week, we saw the Royal Commission pushing the idea that providers – For Profits and Not For Profits – shouldn’t be making profits.

The Commission’s argument seems to be that aged care is majority funded by the taxpayers so they are entitled to services – and suggests to me it is minority groups that are driving the conversation at the Royal Commission.

Patrick was firm on this issue, noting IRT’s share of Government funding has fallen to 60%. It is not a fact that Government provides all (or most) of the funding – it is a “misnomer”.

Rachel bluntly called out that we customers of aged care have to pay more and that the current subsidised system for the wealthy needs to end. She used the example of Australia’s richest woman enjoying the government subsidy once you reach the annual and lifetime cap of $66,610.90.

She also conceded there is still a reluctance to pay more for care however from her clients.

Regarding ‘buybacks’, Anita added she has not been approached by clients yet about solvency issues, but she expects this to be a growing concern as the new buyback laws in the various states begin to impact the sector.

NSW village operators held responsible for elder abuse of residents

The issue of boards and leadership – especially in light of the new NSW Disability and Ageing Commissioner promising to crack down on elder abuse in retirement villages – was also a topic for quick debate.

Anita emphasised that the definition of elder abuse in the NSW legislation is very broad – meaning operators could be held responsible if a resident is the subject of abuse.

A lot of food for thought – and as I concluded, we still have another 12 months of the Royal Commission to go.

I will be speaking on the Royal Commission and its impact on the sector and future directions at the 2020 LEADERS SUMMIT at the Hyatt Regency in Sydney on 26-27 March.

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