Fundamental failure: Aged care a public good or competitive market? RC fails to address role of private providers

Mar 2, 2021

The Royal Commission’s first report elegantly articulated the problems that needed to be fixed. The final report fails to set out a coherent package of practical solutions this same RC identified in ‘Neglect‘. Significant increases in funding are required. But they need to have big strings attached. Amazingly, the Royal Commission failed to address this issue.

After more than two years of hearings, 10,574 written and 6,800 telephone submissions, the Aged Care Royal Commission (ACRC) delivered its long awaited report on Friday 26 February 2021. It follows from an interim report (simply titled ‘Neglect’) in October 2019.

If the government or the community is looking for an elegant blueprint for how to fix aged care, they will not find it here. The final report, running to many hundreds of pages, is full of inconsistencies, contradictions and conflicts. In some ways it is a perfect reflection of the aged care sector itself.

Significantly, the two Commissioners could not agree on critical issues. Clearly unable to resolve issues internally, they provided individual perspectives and recommendations on a range of issues including governance, funding, financing and capital. The report is peppered by disagreements between them. At the heart of their many disagreements is a very fundamental conflict. One Commissioner sees government as the problem. The other Commissioner sees government as the solution. As the final report illustrates, it is impossible to reconcile such a fundamental difference. They have thus handed the most recalcitrant issues back to government to solve.

Older people and their families will inevitably feel let down as both government and aged care providers have been handed a ‘get out of jail’ card. While the ACRC has outlined numerous failings on the part of the current and previous governments, there has been no questioning of the underlying assumptions about aged care as a market. Furthermore, for the many thousands of people who wrote submissions setting out serious incidences of abuse and neglect, it is likely they will feel particularly aggrieved that the ACRC appears to have made no adverse findings against any provider. They will inevitably conclude that they were not heard.

Nevertheless, there is much in the report the two Commissioners do agree on and the unanimous recommendations in the final report give the government a roadmap on a few fundamental (even if somewhat limited) issues. There is little in these unanimous recommendations that is new. Most have been recommended in numerous reports over the last two decades. They are, almost without exception, the low hanging fruit.

The critical question now is how the government responds to the low hanging fruit while deciding what to do with more than 100 other recommendations, many of which are in conflict with each other.

Aged care: Commissioners hand government a ‘get out of jail’ card with disagreement between Commissioners.

A new Aged Care Act

A new Aged Care Act is a priority. It needs to frame quality aged care as a human right and it needs to provide the legislative framework for an aged care system in which recipients receive care and support according to need. While the ACRC proposals around a new Aged Care Act recognise individual rights there is insufficient emphasis on public policy objectives such as population equity and system efficiency or community objectives of affordability, accountability and equity. The ACRC’s proposal that, for the first time, a positive obligation be imposed on providers through an enforceable duty of care is a potential game changer. But it will not be enough.

More public funding – but it needs strings attached

The current aged care system cannot be fixed without a significant investment of funds. The ACRC’s ambitious calls for an expansion of public funding will be welcomed by the aged care sector and by the community. At the same time, there is no point the government pouring a lot more in the top of the aged care funding bucket if there are big holes in the bottom. Significant increases in funding are required. But these large increases need to come with big strings attached. In particular, providers must no longer be allowed to gouge out excessive profits at the expense of quality and safety and consumer experience and outcomes.

Staff ratios

Staff ratios are the most practical approach to ensuring that public funding for aged care is used for its intended purpose. The ACRC has recommended mandated staff ratios adjusted for the needs of each resident and the information systems to make these adjustments and to monitor and report on staff ratios are now available. The Commission has also recommended minimum mandatory qualifications and registration as well as more transparent reporting including a five star rating system. The international evidence about residential aged care is now strong and consistent. Quality of care in aged care homes is driven by staff numbers, skill mix and continuity. The ACRC recommendations related to staff ratios will enjoy widespread community and health professional support. However, there will not be widespread support amongst providers with inevitable claims that mandated staffing ratios are not achievable, will discourage ‘efficiency’ and will stifle ‘innovation’.

Aged care and the magic pudding

Waiting for home care

The evidence is clear that too many older people living in their own homes are struggling daily while waiting too long to get the level of support they need. While there has been a significant investment in additional community care ‘packages’ in recent years, the waiting list just keeps growing. The whole home aged care system needs an overhaul and the ACRC did not provide a clear solution on how best to do this. It has sketched out possible changes, but not the solution. It simply extends the marketisation of home care while destroying the continuity of services currently provided through the Community Home Support Program. In the meantime, funding more and more packages is a short-term, if expensive, fix.

The bigger picture

The legal system is designed to identify problems and errors. It works most effectively in deciding between binary choices of fault or no fault and is designed to provide answers within a legalistic and regulatory framework. This paradigm does not sit comfortably with aged care. Aged care is a complex social care system that needs a clear values-based public policy framework. A key lesson from this inquiry is that, in hindsight, a Royal Commission was not the best way to fix aged care or, indeed, to develop coherent public policy more broadly.

This is evident in the significant disconnect between the Commission’s first and second reports. The first report of the ACRC elegantly articulated the problems that needed to be fixed. This final report of the Royal Commission does not match the first report. It fails to set out a coherent package of policy and practical solutions to fix the problems this same ACRC identified in ‘Neglect’.

That said, the ACRC has picked the low hanging fruit and, if implemented, these will go a long way toward improving day to day aged care. At a minimum, the aged care system needs to be safer, kinder and fairer. More funding, better staffing and more effective regulation will all help to achieve this.

But the bigger and deeper issues won’t go away. Given our experience of the past 20 years and the affect of Covid on nursing homes, is the Commonwealth the right level of government to deliver aged care services? A critical issue not adequately canvassed by the ACRC is whether aged care should be planned and regulated as a public good or as a competitive market.

Another is whether government responsibilities for aged care can and should be contracted out to private providers. If so, should there be limits on how much profit a provider can make? A related issue is the funding of services that older people want and that improve quality of life but that the person does not necessarily need. Are these a taxpayer responsibility? And, given the high level of clinical needs among residents in aged care (with one third dying every year), an even more pressing issue is how to better integrate aged and health care, especially given our federated system of government. The list goes on.

These are complicated and contested issues and ones that the ACRC fundamentally failed to address. Against the background of a growing aged population and increasing community expectations, it seems the solution to the wicked problem of aged care will have to wait until next time.

Aged Care: Human Right or a market opportunity

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