[Written in partnership/ collaboration with UTS]
At the beginning of March, the Royal Commission into Aged Care Quality and Safety issued its final report, which painted a damning portrait of Australia’s aged care system. After spending two years sifting through 10,500 submissions and hearing testimony from 600 witnesses, the commissioners settled on a series of recommendations aimed at fixing the problems it uncovered.
And as part of the government’s response to the report, Prime Minister Scott Morrison earmarked a sum of $452 million in the 2021 budget to transform the sector and improve conditions. But since there’s yet to be a clear statement on how the money is to be spent, businesses in the sector still don’t know what to make of the announcement.
That means, right now, the best anyone can do is to try to take the most salient points from the commission’s report to forecast where the investments will be. These are the four main takeaways of the report:
A Shift Away from a Ration-Based System
The commission concluded that the present ration-based system of aged care must be replaced. In its place would be a rights-based system that allocated care to individuals based on assessments of their needs and wishes. The goal is to eliminate the waiting list for services, which now stands at approximately 100,000 people.
For businesses in the sector, this is an unmistakable sign that there will soon be expansionary forces at play. And that points to growth in the months and years ahead.
Regulation Must Increase
The expansion, however, won’t be unchecked. The report also found a need for stronger governance and oversight into the sector. In particular, it noted that quality of care needed ongoing attention, and recommended an independent pricing mechanism to set industry cost standards. That points to an increase in overhead coming for businesses that provide aged care services, and it’s still unknown what the new accreditation requirements might be.
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New Workforce Requirements
The report also pointed out a need for some new standards regarding the workers that provide front-line services. Specifically, it called for a new national registration scheme for workers and new requirements and minimums for time spent with those receiving care. That’s likely to spur new education requirements for staff, as well as for those managing the businesses themselves. The government may yet announce subsidies for the needed workforce upgrades, but it’s still an area of major uncertainty for business owners.
A Move to a Universal Funding Model
Finally, the report called for a reassessment of the funding mechanisms in Australia’s aged care sector. Specifically, it called for a move to a universal funding model to replace today’s mixture of means-tested arrangements. It also would eliminate refundable accommodation deposits, which now make the process of securing care difficult for many seniors. Any changes toward that end would be beneficial for businesses by lowering administrative overhead. But that’s only if the government replaces the present system with one that provides adequate funding to cover the costs of the whole aged care sector.
Reason for Optimism
Although it’s too soon to know how the commission’s report will translate into policy changes, it seems certain that it’s going to have a material impact on aged care providers. If handled appropriately, it should help providers expand while improving their quality of care. It should also offset some of the added new overhead by simplifying the overall funding picture. In the end, it should be a boon to the industry, but only time will tell.
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