Home' Australian Ageing Agenda : AAA May-Jun 2015 Contents THE QUESTION OF whether
the government should end
its control of places and move
to an entitlement-based aged
care system as proposed by
the Productivity Commission
will feature prominently in the
five-year review of the aged care
reforms, slated for 2016-17.
At the time of announcing
the Living Longer Living Better
package, former minister for
ageing Mark Butler emphasised
the financial risk for government
of an uncapped system and said
the sequencing of aged care
reforms needed to be right.
To get the sector ready for
that ultimate goal, Butler argued
workforce sustainability, greater
transparency and informed choice,
and mature competition had to be
addressed as a prerequisite.
Three years on, the current
Coalition Government is talking
up the benefits of a market-based
system and has signalled its
support for loosening up supply,
but within the existing budget.
As a first step towards removing
supply constraints, COTA
Australia chief Ian Yates says
accurately modelling the level of
unmet need will be critical, and
data captured through My Aged
Care will help provide the most
accurate picture yet.
"For the first time, we will
know who has been assessed
as in need but is unable to get
a service and who is waiting for
what level of support," he says.
Nick Mersiades, director of
aged care at Catholic Health
Australia, says modelling the costs
of aged care in a demand-driven
system should take into account
various scenarios, including
more equitable consumer
contributions based on capacity
to pay assessed on total wealth,
greater emphasis on reablement,
consistently applied national
eligibility assessment, greater
contestability in service delivery,
greater opportunity to choose
home care over residential care
and reduced red tape.
There is also debate within
the sector as to the extent to
which the planned significant
growth in the number of home
care packages from 66,000 to
around 100,000 by 2017, plus
an additional 40,000 over the
five years to 2021-22, will meet
As further steps are required
to get to an uncapped aged
care system, it is unlikely that
supply caps will be lifted in the
short term but it remains COTA's
objective, says Yates.
The National Aged Care
Alliance is currently developing a
new NACA blueprint on the next
stage of reform, including how
an uncapped system might be
achieved, with a report due to be
discussed by NACA in mid-May.
The 2011 Productivity
Commission inquiry report
recommended the progressive
relaxation and eventual removal
of supply constraints, noting that
caps restricted the availability of
services and limited choice and
competition between providers.
The PC proposed a controlled
expansion in community care
packages before abolishing
supply restrictions altogether.
Yates says the aged care
provision ratios curtail service
innovation and have created
oversupply in some regions and
undersupply in others.
Waiting lists, particularly in
home care, can also compromise
the timeliness of access to care,
put pressure on healthcare costs
and contribute to carer burden.
The National Health and
Hospitals Reform Commission
noted that capped supply and high
occupancy created few incentives
to attract aged care clients by
delivering better quality care.
Hal Kendig, professor of ageing
and public policy at the Australian
National University, says Fifield's
consistent public statements on
moving to a consumer-driven
aged care system are promising
directions, which, if implemented,
should deliver a more responsive
and efficient aged care system.
"Central determination without
market signals does not lead to
the best use of resources and
does not best meet consumer
needs and preferences," he tells
Australian Ageing Agenda.
"There is also a question
about does the public want
to keep providing funding to
service providers that are not as
responsive as other organisations."
In a market approach, Kendig
says strong-performing providers
delivering what people want are
likely to increase their market
share, while poorer performers
will be squeezed out.
Another important change
in a market environment is that
the financial risk is carried by
the provider that now has to
prove they have something that
consumers will pay for, within
an environment of regulatory
controls over quality, he says.
The move to a demand-
driven system will also require
strong protections against areas
of market failure where supply
is limited such as in rural and
remote regions and areas of
To address this, the PC
recommended providers continue
to be required to provide a
WHAT THEY SAID
system will require
against areas of
ratios would not
guarantee an end to
GLENN REES: Hope
care places will force
residential to be
By Linda Belardi
AAA puts an important issue under the spotlight, examines the
background and considers the implications. The issue: should
government caps on aged care places be lifted?
22 | MAY--JUNE2015 | AAA
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