Options for residential aged care funding on the table

Prepared by the Australian Health Services Research Institute, (University of Wollongong) and commissioned by the Department of Health, the report reviews the current system and when considering options, addresses five key issues: classification and assessment tools, pricing, funding models – including analysis of the resource and infrastructure implications -, implementation considerations and audit mechanisms.

Federal Minister for Aged Care, Ken Wyatt, says the Australian Government contributes around $17.5 billion a year to aged care and by 2019-20, it’s expected to be just under $21 billion.

“It’s important that we review the way we fund aged care to ensure we create an aged care system that is affordable, sustainable, flexible and responsive to consumers,’ he says. 

“In 2015–16, more than 1.3 million older people received some form of aged care and with more Australians living longer and healthier lives, those numbers will increase.”

Aged & Community Services Australia (ACSA) Chief Executive Officer Pat Sparrow says the report focuses on the current funding envelope for residential aged care. However, she feels it is critical that development of the new model includes a consideration and understanding of what the Government actually subsidises for an individual.

“When it is clear what the government pays for there can be a more sensible discussion on user pays issues and options, including equity release. This is important as the population ages and demand for services increases,” Ms Sparrow says.

At the recent ACSA consultations with the Department and consultant Richard Rosewarne, who is currently undertaking a complementary review on the Aged Care Funding Instrument (ACFI) and the role of external assessments, Ms Sparrow said it was clear that aged care providers are seeking a funding model that is simple, stable and supports innovation.

“Aged care providers want to deliver quality care that meets the needs of their residents. Even more important given the move to the market based, consumer driven system envisioned by the Aged Care Sector Committee’s Aged Care Roadmap for Reform,” she says.

Minister Wyatt says this separate review focus on options to improve the current tool to make it less subjective including the feasibility of external assessment. “These two separate but important pieces of work will help inform the Government’s deliberations over the future direction for funding reform,” he adds. 

“The aged care sector will continue to play a key role in this reform and there will be further consultation with the sector before any decisions are made on funding options.”

Ms Sparrow says ACSA looks forward to engaging in further consultation with the Government on this significant piece of work.

The report is available to download from the Government website.