Aged care reform: the time is right

19 August 2011

It is time for action to implement the "landmark blueprint" for aged care reforms recommended by the Productivity Commission's recently released Caring for Older Australians report.

So says ProfessorHal Kendig Director of the Ageing, Work, and Health Research Unit in the Faculty of Health Sciences at the University of Sydney, and Chief Investigator on the ARC Centre of Excellence in Population Ageing.

We need more than incremental reform

Hal Kendig writes:

Since the Productivity Commission's report was launched a week ago, it has attracted headline media attention, widespread support, and some criticism from diverse quarters.

Valuable and largely positive commentary has been provided by the Council on the Ageing, Aged and Community Services Australia, and independent commentaries such as at The Conversation and The Voice.

Prof Hal Kendig
Prof Hal Kendig

The stakes are high, given that we have reached breaking point with the tensions and contradictions in an aged care 'system' that has become increasingly out-dated since the 1980s.

While new services and expertise have been developed, more incremental changes just cannot bring about the fundamental changes needed to address services that are fragmented, under-funded, and divided between both levels of governments and the care, health, housing and income support sectors.

Older people in need and their carers find it very difficult to gain access to effective, flexible, quality, and affordable services when they need them - as they choose in their own homes, for the vast majority, or in various forms of accommodation and care for a minority.

The main issues

The PC report has set a sound foundation for advancing aged care. The principles, followed through with specific recommendations, include a fundamental reorientation from a funder and provider focus to an entitlement, consumer driven approach - the dollars would follow the people.

A major innovation is the Australian Seniors Gateway Agency (ASGA) that, at a regional level, would provide information on promoting health and independence, assessment for, and entitlement to, choice of services; Centrelink means testing for higher levels of care; and coordination of services if needed.

Increasing both consumer choice and funding through co-payments would be achieved by introducing separate funding streams for care services and (for those in residential) accommodation and living costs. Far fewer people would have to move into a nursing home to access high levels of care.

The most controversial provisions are for older people to meet their own accommodation costs where they can or for government to meet them on a means tested basis. Accommodation bonds or periodic payments would free up capital for building that has not been viable for high care facilities.

The Commission proposes pensioner savings and credit schemes that would enable older people to fully access the pension after selling their homes or to pay their aged care co-contributions or accommodation costs bonds from loans to be repaid when their homes are eventually sold. Bonds paid on entry to residential care woud continue to be repaid (minus costs) when older people leave the accommodation.

A new Aged Care Commission, independent from government, would be responsible for overseeing a progressive freeing of the market for aged care, setting prices, and overseeing accreditation, regulation, and a data clearing house.

The report does have useful recommendations on how to improve the evidence base available to inform aged care but stops short of recommending funding for it.

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