Whiddon CEO Chris Mamarelis is warning regional operators they will miss out on the “significant increase” in fixed care costs promised by Greg Hunt, the Minister for Health and Aged Care, and Senator Richard Colbeck, Minister for Senior Australians and Aged Care Services.
The Australian National Aged Care Classification (AN-ACC) will replace the Aged Care Funding Instrument (ACFI) on 1 October 2022.
“The key issue relates to the newly proposed AN-ACC funding model. Within the proposed funding model, a layer of additional funding is built in to support homes operating in ‘remote’ communities. As a result, the current viability supplements, paid to support regional aged care homes will become obsolete,” said Mr Mamarelis (pictured right), the head of the Not For Profit aged care and village provider.
“Unfortunately, the calculation methodology being applied in this transition will only see homes with a Modified Monash Model (MMM) classification rating of 6 or 7 receive the extra funding. The current viability funding generally recognises MMM 4 and 5 as well. This means in Whiddon’s case, that homes in locations like Moree, Narrabri, Wee Waa, Casino, Maclean, Kyogle and Temora will lose their regional recognition and with it much needed additional funding required to support our operations. In the context of the current funding model this can equate to in excess of $100K for a single service.
“Obviously, the issue is broader than Whiddon, however, I am illustrating this as an example. There are many smaller community-based operators that may not even understand the implications of this change given their limited resources. The reality is that AN-ACC does not recognise, among other things, the additional costs attached to transporting food and medical supplies, premiums on maintenance work or other areas such as the recruitment and relocation costs attached to the skilled workers required to service our communities.”
Mr Mamarelis said the reality is that the costs incurred in locations such as Narrabri, Wee Waa, Moree and Kyogle carry as significant a premium as homes in Walgett and Bourke and are performing very differently to homes in metropolitan locations.
“Believe it or not, AN-ACC will see the homes listed above, treated no differently from the homes we operate in Sydney, a significant shift from the current system of funding and quite an unreasonable grouping.”
The gap in financial performance between regional and metropolitan services, is further supported by industry analysis conducted by aged care financial analysts StewartBrown (see graph above).
“I am hoping that we can extend the MMM classification range beyond 6 and 7 within AN-ACC to include MMM 4 and 5. At this stage, extending the range is probably an easier approach then asking for the model to be reengineered. This is something that needs to be reviewed, as regional aged care cannot afford to lose any additional funding,” added Mr Mamarelis.