The aged care system is in crisis. Everyone knows it, yet no Australian Government has the political will or capacity to fix it.
Like every other component of the ‘human services’ system, aged care has evolved from disparate initiatives in charitable, mutual and religious institutions which have, over the past forty years, been corporatised and transformed into a vast supplier-driven industry, detached from consumer need and aspiration. There is no ‘market’ in aged care – the industry combines the depersonalised processes of institutionalisation with the contractualised processes of corporatisation. These dual processes have been overseen and driven by both Coalition and Labor Governments since the 1980s.
Every brochure from every care provider and government agency in the country now declares a commitment to ‘consumer-directed care’. But as the Royal Commission into Aged Care Quality and Safety stressed in its interim Report, there is no ‘consumer-directed care’. It doesn’t exist. The Commissioners opened their Report by citing the words of Ian Yates, a long-time advocate of reform, that, apart from the prison system, aged care is “the only institutionalised system we still have left”.
About 1.2m Australians over 65 years use aged care services. About 847,000 of these receive ‘basic’ services on an ‘as required’ basis, such as meals at home, domestic assistance and home nursing. About 116,000 are in receipt of a Home Care Package for coordinated home care, and 241,000 are in permanent residential aged care.
The figure of 1.2m is expected to grow to 3.5m by the year 2050.
Successive inquires, investigations and reviews have proposed systemic reforms to the system, but the perennial blockage to their implementation is the opposition by service providers to a shift in funding away from the provider to the consumer, so that ‘consumer-directed care’ can be made a reality.
This is the same blockage that stymies reform of our dysfunctional mental health system, and our fragmented primary health care system, and our notoriously ineffective indigenous affairs, family support and alcohol and drug treatment systems. Providers want to keep the money. They’ve seen what’s happened in NDIS and they don’t want to go down that road of allowing consumers (people with disabilities and their families in the case of NDIS) to be funded directly, by-passing service providers and their gate-keeping role in the system.
Without a shift in the funding paradigm from the provider to the consumer, from the supply-side to the demand-side, consumer-directed care cannot be enabled. Hence the stalemate in reform.
To break this stalemate, a policy agenda of de-institutionalisation of care and a political voice for the funding of consumers instead of providers must find its way into our parliaments.
1. All individuals over the age of 65 with an assessed need for aged care services would be entitled to an Individual Support Co-ordination and Advocacy Package of $10,000 per year. This package may be used for one or more of the following three purposes only: to purchase the services of an Advocate (an individual and/or an advocacy group of their choice); to purchase the services of a Support Co-ordinator (selected by the individual); and/or to purchase a person-controlled information and management tool with which to record interactions and transactions and manage an individual care plan.
This funding would supplement existing support and care funding. It addresses the need for advocacy and support coordination so that individuals may exercise ‘consumer-directed care’. It would be made available to the 1.2m Australians currently assessed as needing aged care, at a cost of $12bn.
2. To be eligible for an Individual Support Co-ordination and Advocacy Package, individuals must participate in a Circle of Support in their locality. Payments are conditional upon participation.
A Circle of Support will typically involve 6-8 people comprising immediate and extended family, friends, neighbours, shopkeepers, volunteer drivers, local sport and recreation leaders, faith and community groups. The Circle undertakes to meet monthly as a base commitment in supporting the person at the centre of their Circle. The Circle will usually act as the primary unit of support for the person in establishing support plans and pursuing personal and social goals as they age.
3. A Support Co-ordinator will be selected and appointed by each individual, and may be a family member, an accountant, a personal coach, a health or community services practitioner, or a community organisation.
4. A person-controlled information and management tool is an entitlement for every person with an assessed need for care, which would record in electronic form every interaction and transaction between the individual and service providers and practitioners. It may be held and managed by an individual’s Support Coordinator, or by the individual themselves. It would serve as a consolidated information record which would comprise all components of an individuals’ support and care history. It would also function as a technology platform for the management of an individual budget and support plan.
Individuals may choose a management or information tool of their choice. Various tools are now on available on the market.
5. An Advocate may be an individual and/or an advocacy group selected and appointed by each individual.
Funding of aged care advocacy remains stuck in the old ‘block-funding’ paradigm whereby governments select the bodies they think should be funded for advocacy. It is not the role of governments to determine which ‘advocacy’ bodies or ‘representative’ bodies or ‘peak’ bodies should represent Australians over the age of 65. This is solely the prerogative of older people themselves.
Advocates would be paid out of an Individual Support Co-ordination and Advocacy Package. This arrangement would replace existing Commonwealth and state funding for peak bodies and advocacy groups.
6. Home Care Packages would be assigned to each individual’s Support Coordinator and managed by them. A Support Coordinator may not be a supplier of services used by the individual or a staff member or agent of a supplier of services.
7. A Government-backed Australian Aged Care Home Credit scheme would be established to assist individuals to access permanent residential care without having to sell the family home. Spouses, partners or dependents living in the family home will be protected (‘protected persons’).
This allows individuals to draw on the equity in their home to contribute to the costs of their aged care and support in an easy and secure manner. Repayment of these costs would not fall due until the care recipient and all protected persons choose to vacate the residence.
This is a Government-backed line of credit secured against the family home. The individual would draw progressively down on this equity to fund residential care. Once the drawdown has reached the maximum permitted based on valuation of the family home, no further draw down would be permitted. The outstanding balance of the line of credit would become repayable upon the sale of the home including upon the death of the individual, except where there is a protected person in the home. In this case, the outstanding balance of the line of credit would be repayable when the protected person ceases to permanently reside in that residence, or ceases to be a protected person.
8. An Australian Aged Pensioners Savings Account scheme would also be established to allow aged pensioners to deposit proceeds from the sale of their principal residence, should they choose to sell it. The account would be exempt from the assets and income tests, and can be drawn on flexibly to fund living expenses and care costs. It would pay interest equal to the prevailing consumer price index to maintain its real value. All accounts would be free of entry, exit and management fees.
If individuals chose to sell their home, they can retain their pension benefits, and access the savings account to pay for living, accommodation and care costs while maintaining the real value of their asset.
9. The HomeShare model of shared living for unaccompanied ageing people, and co-sharing of unaccompanied ageing people and students, or unaccompanied ageing people and people with disabilities, or other variations on this theme, has international success in reducing loneliness for participants and reducing living costs for otherwise vulnerable people.
We would encourage and expand the adoption of this model with the aim of getting 25% of Australians over the age of 65 participating by 2030.
10. To create financial incentives for employers to change their hiring patterns to employ people over the age of 65 years, a permanent People’s Corporate Tax Rate of 15% would be introduced for businesses in which 20% or more of employees are people over the age of 65 years, people with disabilities and mental illnesses, and/or people who have a history of long-term exclusion from the labour market.