“We have a real problem here”: Department of Health maintains providers must put “self-interest” aside to engage in reform

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Last month, the Senate Community Affairs Legislation Committee met with the Department of Health, peak bodies and unions on the passage of the latest legislation from the Royal Commission reforms – and all operators should take note of the comments made by the Department’s Deputy Secretary, Michael Lye.

The Deputy Secretary emphasised the Department’s focus on reforming the culture of the aged care sector, warning that the fast pace of reform will continue – and providers need to focus on putting consumers first.

DOH sticking to tight timeframe

As we discussed here, the second tranche of the Government’s Royal Commission legislation under the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 covers a wide range of reforms including:

  • the Australian National Aged Care Classification (AN-ACC) funding model;
  • employment screening for aged care workers and governing persons of approved providers; and
  • a code of conduct for approved providers, workers and board directors including new banning orders for individuals.

Mr Lye stressed that while the Department is committed to consultation on the reforms, the Government also wants to stick to the timeframe set down by the Royal Commission.

“We are trying to engage them with a very complex set of reforms and signal to them in every area, and consult them in every area, that we’re doing work,” Mr Lye said.

“We have a very tight time frame to meet the Royal Commission’s timetable for recommendations, which is why we think there’s a sense of urgency with this.”

Providers not going to “fall over a cliff”

The Deputy Secretary was also blunt on providers’ concerns about the implementation of the AN-ACC model in October 2022.

The hearing had noted that the Department’s shadow assessments are running behind schedule and will not be able to provide guidance on the financial impact by February, when many providers are preparing their 2022-23 budgets.

“I’m not sure about this issue regarding funding on which they can’t frame a budget. As Mr Richardson said, the uplift in funding is $7.8 billion. The idea that they think they’re suddenly going to fall over a cliff – that’s not going to happen,” he stated.

Consumers – not providers – first

Mr Lye went on: “There is a culture here where providers of all kinds have been in control of this care sector.”

“They expect to be running the show but they’re not going to run the show. The Royal Commission was very clear about the culture in this sector, which we have to address.

“The Budget was really clear that providers do have very, very good signals about the level of investment going forward in residential and home care. So, I think the idea that they can’t frame a budget because there’s so much uncertainty, given the high level of uptick in their base funding, stretches belief.”

“In terms of culture, we have a real problem here that we’re trying to address, where the consumers’ interests have been subordinate to the interests of these providers. I understand they’ll have a go on this and they want to be told everything and they want to control the pace of reform, but we’ve got a very clear set of written instructions from the Royal Commission and also the Government, which has accepted the Royal Commission’s recommendations, that we need to change things about the sector.

“This is one area we feel very strongly about. I don’t know that that kind of complaint from providers is much more than self-interest at this point.”

Mr Lye added that the data from the shadow assessments is unlikely to be ready by February, but will be made available as soon as possible in advance of the AN-ACC implementation.

But his comments highlight the fact that there will be no reprieve from the fast pace of reform – and the Department expects providers to get on board.