Pearls and Irritations

The election of the Albanese Labor government was met with a strong sense of optimism among people who had been lobbying for aged care reform for years. Finally, a government prepared to address the systemic issues that had plagued the sector since the Howard government neo-liberal reforms decades before. Alas, it was not to be.

When Labor was elected in May 2022, the Aged Care Royal Commission had not long reported and handed the government a significant reform agenda. Labor’s first response included a massive injection of new funds in its 2023 budget. A 15% pay rise formed the budget centrepiece. It was one of three significant aged care reforms that Labor introduced in its first year – a new funding model, mandated minimum staffing and a pay rise for aged care workers. It was a great start. While there was much more to be done, all was looking good.

However, with few exceptions, progress since then has either been watered done, delayed, largely cosmetic or abandoned. There is certainly a lot of administrative busyness with increased demands on providers in terms of bureaucratic reporting and increasing micro management by Canberra. In response, the sector feels a strong sense of reform fatigue.

But, with the notable exception of more aged care staff on the ground, there is little evidence of improvement in the lived experience of older families and their families.  The aged care gateway is still a nightmare to navigate, aged care assessment remains firmly focused on eligibility and not needs or preferences, quality of care is still well below par, the new public reporting system is a mess and reform in care at home has effectively stalled.

One reason that reform has stalled since the initial burst of activity is simply that other issues have overtaken aged care on the political agenda. The new Aged Care Act is still many months away and many of the planned reforms are contingent on that.

Another is a sense that, with the reforms and budget increases in the first year, aged care is ‘fixed’. The government can give it a tick on their election promise list.

An equally important reason is that, like Aged Care Ministers and governments who have gone before, the current government appears captured by the aged care sector itself and by a small group of Canberra public servants. With extra money and staffing and with aged care no longer on the front pages, aged care sector advocates are quiet and comfortable and certainly not pushing for any real reform.

Yet many problems remain to be adequately addressed. An Aged Care Taskforce was due to report in December 2023 on the future financing and funding of aged care. This was announced as an ‘expert’ review to provide advice to the Minister for Aged Care, but with the Minister herself chairing it. It was hardly independent and is now overdue.

COVID remains the canary in the mine. There have been more than 18,000 COVID outbreaks in the 2,800 homes across Australia including 347 in the last seven days. Almost everyone living in aged care has been infected at least once. Some have been infected multiple times. In total more than 6,000 aged care residents have died of COVID and there have been more than 100,000 staff infections. Any wonder older people and families dread the idea of a nursing home and no one should be surprised that there are still critical staff shortages.

The new five star public reporting is a classic case of implementation failure. The intention had been a user friendly website where consumers (older people and their families), could ‘shop around’ to select from the ‘competitive market’. Each star would represent 20% of aged care homes in Australia. Five stars would mean that the home is in the top 20% in the country, one star in the bottom 20% and so on.

That is not what Labor has delivered. It is a mess. Instead of being a transparency tool for consumers, the purpose has been completely lost with five stars being awarded to homes that are failing safety and care standards. Not that this will worry too many consumers. It is almost impossible to find on the My Aged Care website and there is no provision to allow homes to be compared side by side. This must surely be by deliberate design rather than by accident.

The proposed new Aged Care Act is a long way from what the Royal Commission proposed. Professor Stephen Duckett summarised it well:

“The new Act smacks of ‘rights washing’ – high sounding rhetoric is simply there to placate consumers and advocates, allowing providers to continue on their way unimpeded, and government to eschew any role in creating and steering a consumer-focused service system.

Another long term policy analyst Charles Maskell Knight has raised fundamental concerns about the Act and about its adherence to the spirit of the Royal Commission’s intentions.

After numerous stop starts, the one positive in what Labor is proposing in its redesign of community aged care centred on a new ‘Support at Home’ program is that it has been delayed. But that is a story for another day.

So what has gone wrong after such an excellent start?

The core of Labor’s current policy inertia is that this government has simply inherited, but never questioned, the policy framework developed under John Howard – that aged care is best delivered through a competitive private for profit model. The theory is that consumers will be able to shop around and select the services they want to use, thereby driving improvements in quality and value for money. After more than 20 years, there is no evidence to support this theory. Quite the reverse, the Aged Care Royal Commission found that the opposite was the case:

The structure of the current system has been framed around the idea of a ‘market’ for aged care services where older people are described as ‘clients’ or ‘customers’ who are able to choose between competitively marketed services… It is a myth that aged care is an effective consumer-driven market”. (Vol. 1, page 10)

The centrality of a market model permeates well beyond aged care. The draft national strategy on the care economy (aged care, disability support, veteran’s care and early childhood education and care) does not even question that the future ‘care economy’ should be a competitive private market. Like most planned aged care reforms, it too misses the central point about care being a social good and not just a market.

the day that the Albanese government was elected, there has been no indication of the government even questioning this assumption, let alone any indication of its intention to change direction. The Department of Health and Ageing embraces this culture in full. It sees its role as stimulating and supporting the private for profit sector with at least one senior bureaucrat describing Meals on Wheels as a ‘monopoly’ that needs to be broken up in order to stimulate a private for profit market.

Not surprisingly, providers themselves drive and reinforce the competitive market model. While many not-for-profit providers have argued against it over time, they are increasingly becoming less influential. Indeed, some ‘non-for-profit’ providers have zealously embraced a ‘for-profit’ culture and business model themselves. Very large private-for-profit providers are increasingly more influential. With an ever increasing market share, they are very powerful. This is in part due to a perception that they are untouchable because they are ‘too big to fail’.

Importantly, the competitive market model philosophy also sits well with the key consumer advocacy organisations. They are composed of articulate middle class consumers and their representatives who are more than capable of shopping around and directing their own care. The problem of course is that they are in no way representative of the majority of aged care recipients.

The typical aged care recipient is very frail, elderly, with multiple health conditions. More than half have dementia or other cognitive impairments. Being on fixed incomes and often with poor English language and advocacy skills, they do not have the luxury of shopping around and negotiating the services they want. They are ripe for exploitation and we see this in the growing list of complaints every year. No doubt many cases of abuse and neglect still go unreported.

Aged care is currently a sleeper issue for a government and a community overwhelmed with cost of living pressures and a national housing crisis.  However, as the response to the Stage 3 tax reform demonstrates, the Albanese governments cannot just sit on its laurels ticking off promises it took to the 2022 election. While some very good progress has been made, aged care is not ‘fixed’. The question for this government thinking about a second term is whether it proactively embraces a genuine aged care reform agenda or waits to react to the next inevitable crisis.

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