News

Revamp would cut aged care funding: analysis - by Darragh O'Keeffe

  

Aged care facilities could lose more than $6,000 on average per resident annually under proposed changes to the Aged Care Funding Instrument, according to a new analysis.


The analysis seen by Australian Ageing Agenda shows the impact of the changes varied widely across the eight facilities examined – from a net benefit of $4,700 per resident annually to a loss of $20,000 per resident.


Allied Care Group, a consultancy that advises facilities on ACFI, examined the impact of Richard Rosewarne’s proposed “Revised-ACFI” against the current ACFI.


It reported on three residents per facility – of low, medium and high care needs – across eight residential facilities around Australia.


David Ruyg, services consultant with Allied Care Group, said that including residents of mixed need actually reduced the impact of the findings “as high care residents tend to have the greatest funding decrease and are more common in most facilities than low care residents.”


The activities of daily living domain was the highest funded area of the tool currently but was the area likely to see greatest reductions in spending, he said.

“In the facilities we work with we see about 40 to 60 per cent of residents in the medium to high range of the ADL domain, and we expect they are all going to lose funding,” he said.


Mr Rosewarne’s proposals include fewer and simplified questions in the tool, a new therapy program for pain management and potential options for external assessment.


On the eve of his review’s launch last October Mr Rosewarne told AAA: “Physical therapy is what the industry wants and is best practice.”


The new therapy program would be paid for by moving pain management items and the associated funding of $15 per day out of the complex health domain.


Allied health peak bodies have previously welcomed the proposal. But Mr Ruyg said the new analysis found that while the therapy program would increase funding by $15 per day, allowing for $95 per hour to pay an allied health professional, this would still not be sufficient funding to cover the cost of delivering the program for some facilities.


“For every resident where we have included the therapy program it’s likely that the funding loss would be $5,475 per annum greater than it appears in this report for some facilities,” Mr Ruyg told AAA.


“If you’re a small regional facility that doesn’t have access to an allied health professional, or they have to travel to be at your facility, the costs are greatly increased and most likely residents will go without that care and the associated therapy program funding,” he said.


Mr Ruyg said he agreed with the idea of having therapy programs for residents but the way it had been structured in the Revised-ACFI meant it may not be feasible for all facilities.


He said that the points required to lift a resident to a medium or high classification in the activities of daily living domain would be extremely difficult to achieve.


“This means that although some residents would receive a small increase in funding ($7.89), these same residents would remain at the low level of funding for a lot longer thus eroding any potential benefit in the long term.”


For further information on how Golden Age Physiotherapy may provide Aged Care Health Services and solutions to your facility, please do not hesitate to enquire at enquiries@goldenagephysiotherapy.com.au


The Author of this article is Darragh O'Keeffe, originally posted on the Australian Ageing Agenda. The orginal post may be found at: https://www.australianageingagenda.com.au/2018/02/28/revamp-cut-aged-care-funding-analysis/

Providers advised on options to improve revenue - Ann Deslandes

Uncapping the daily care fee is the best option for boosting the declining revenue of residential aged care organisations, an aged care consultant tells AAA.


Grant Corderoy, senior partner with aged care accountancy and benchmarking firm StewartBrown, said the current funding and revenue arrangements were making it “very tight” for the majority of residential aged care providers.


The only real opportunity available today is to make a surplus through the aged care funding instrument, but any potential to do that is reduced by freezes on the indexation of ACFI and facilities under staffing squeezes, he said.


This makes the Tune Review recommendation to allow providers to charge a higher daily fee “critical to residential facilities to allow an increase in revenue,” Mr Corderoy told Australian Ageing Agenda.


Facilities can offer additional optional services today and while some are providing those, many especially in the not-for-profit sector are not, he said. 

Mr Corderoy was speaking to AAA last week following his presentation on financial sustainability for the aged care sector at the recent SA Care Revenue Symposium in Adelaide, the first event in a national series underway by Aged and Community Services Australia.


He said StewartBrown benchmarking data of over 950 facilities showed facilities were losing $43 per bed per day on the gap between a resident’s daily living expenses and the revenue received from the basic daily fee.


The daily fee, which covers everyday living costs, is set at 80 per cent of the single pension and currently $49.42.


The Tune Review recommended changes to the basic daily fee including a requirement for providers to charge a minimum fee while allowing them to charge a higher fee to non-low means residents, with fees in excess of $100 to be approved by the pricing commissioner.


As previously reported, aged care peaks ACSA, Leading Age Services Australia, the Aged Care Guild and Catholic Health Australia have given their support to allow providers to charge a higher daily fee to wealthier seniors, although CHA argued the higher fee should still be capped.


The Federal Government flagged in its December mid-year budget update that it would respond to the 38 recommendations of last year’s review of aged care by David Tune in the 2018-19 Budget to be handed down in May.


Implementing an uncapped fee


If the government does legislate to deregulate the daily fee, Mr Corderoy said there were still decisions to be made by facilities on how that would be implemented.


Facilities may rightly ask “if we’re providing these services now, how do we suddenly charge more? If 40 per cent of residents on average are supported have they got the revenue base to increase the fee?” he said. “No provider wants a two-tiered system.”


Mr Corderoy suggested “the fix going forward” was for facilities to provide a range of services over the duration of a resident’s stay.


“Early on this might be meals and recreation, later on it might lean towards end of life and palliative care,” he said.


Providers advised to consider bonds


Last Wednesday providers were told they could double their investment return for a little additional risk at a briefing in Adelaide, also hosted by ACSA.


Justin McCarthy of fixed-income brokers Mint Partners said there was some potential for raising additional revenue by investing in bonds.


For most aged care providers, much of their excess cash or investments are in term deposits, which are yielding about 2.5 per cent as interest rates keep coming down, Mr McCarthy said.


At the briefing, he advised participants on the bond market and options for taking money out of term deposits and putting it into bonds.


“For almost the same risk or a very marginal increase in risk, providers at present could double their return – to about 5 or 5.5 per cent,” he told AAA.

New analysis to probe impact of funding changes - Darragh O'Keeffe

Aged care demand continues to grow.  The recently released 2016-17 Report on the Operation of the Aged Care Act 1997 highlights that the ageing population and increasing number of people with dementia are two key factors driving this demand.  The report also explores the current state of the three main types of care that the Government provides to assist older Australians.


AGED CARE DEMAND

In the report the Minister for Aged Care, the Hon Ken Wyatt AM MP states “our aged population is growing at an unprecedented rate”.


As at 30 June 2017, there were 499,000 Australians aged 85 and over. In ten years’ time there are projected to be 672,000 aged 85 and over, an increase of 35 per cent. The number of people aged 65 and over is also expected to increase from 3.8 million to 5.2 million by 2027.


This projected growth in the ageing population suggests a substantial increase over the coming years to the 1.3 million current consumers of aged care services. 


In 2017, there were an estimated 365,100 Australians with dementia, nearly half of whom were aged 85 years and over. The number of people with dementia is anticipated to grow to around 900,000 by 2050.


This increase in dementia cases is also adding to the growing demand for aged care.  At 30 June 2017, half of all residential aged care residents with an Aged Care Funding Instrument (ACFI) assessment had a diagnosis of dementia.


In financial year 2016-17 the Australian Government spent $17.1 billion on aged care, of which 70 per cent of expenditure was for residential aged care.


But whilst the traditional image of aged care is often associated with residential care, Wyatt said that “today the focus is on supporting people to stay in their own homes for as long as possible.


Consumers have made it clear that this is what they want, and it also makes good economic sense”.


The two main forms of Government subsidised home care are the Commonwealth Home Support Program (CHSP) and home care packages.


COMMONWEALTH HOME SUPPORT PROGRAM

Through financial year 2016-17, 722,838 people received services through the CHSP, and an additional 74,475 through the Western Australian Home and Community Care (HACC) program.


The CHSP is entry-level home support with a range of services to assist people aged 65 and over to live independently at home and in the community.


Types of services which are funded through the CHSP include:

  • Meals and other food services
  • Transport
  • Personal care
  • Home maintenance and modifications; and
  • Nursing.

To access the CHSP clients must have an assessment by a Regional Assessment Service (RAS). Clients can contact My Aged Care to organise an assessment.


The My Aged Care staff will ask questions about the client’s current needs and circumstances to determine eligibility for the CHSP and organise an assessment if required.


For CHSP clients who need a greater level of care but still want to stay in their home, then a home care package may be the next appropriate step.


HOME CARE PACKAGES

Home care packages are a more holistic form of care than the CHSP. They can be tailored to meet clients’ personal needs with the help of case management, known as Consumer Directed Care (CDC).


Services which can be chosen by the client include personal care, support services and clinical services.

Access to a home care package is by approval from an Aged Care Assessment Team (ACAT) assessment, or Aged Care Assessment Service (ACAS) in Victoria, which, like a RAS assessment, can be organised by contacting My Aged Care.


An ACAT/ACAS assessment can approve an individual for Level 1 (basic care needs) up to Level 4 (high-level care needs).


With the growth in aged care demand and the Government support for care at home, home care packages saw significant growth and change through 2016-17.


The number of home care consumers as at 30 June, 2017 was 71,423, an increase of 7,354 or 11.5 per cent from 30 June 2016, with the average age of entry being 80.2 years (unchanged from 2015-16). 


As at 30 September, 2017 there were 101,508 ACAT/ACAS approved persons waiting in the queue for either their first home care package or on an interim package.


Whilst the statistics regarding the length of the queue are not available, Mr Wyatt commented in September 2017 that “across the nation it’s 12 months plus.”

Clients can check their My Aged Care portal or call My Aged Care to check their individual expected wait time.


The report confirms the current fees which a home care recipient may be required to pay:

  • Basic daily fee – the maximum is 17.5 per cent of the single rate of the base Age Pension; and
  • Income-tested care fee – paid by those assessed as having sufficient income to contribute to the cost of their care.

Strategies that reduce a client’s assessable income can help to reduce their income tested care fee and improve cash flow.


PERMANENT RESIDENTIAL AGED CARE

For clients who are unable to receive the level of care they need from a home care package, the Government subsidises permanent residential aged care.


This includes services such as personal-care services (help with daily activities such as dressing, eating and bathing), accommodation services and support services (cleaning, laundry and meals).


Access to permanent residential aged care, like for home care packages, is through approval from an ACAT/ACAS assessment.


At 30 June, 2017 there were 178,713 people receiving permanent residential aged care, an increase of 2,724 from 30 June, 2016, which is a significantly lower increase than the 11.5 per cent increase in home care package recipients. 


The average resident is 82 years for men and 84.6 years for women and the average length of stay is aged care is 2.9 years, which may be useful when determining a planning timeframe for aged care clients. However, this is an average and previous statistics have shown that about one in five residents stay in permanent residential care for five years or more.


Additionally, the report confirms the Government’s current structure of fees which care recipients may be required to pay:

  • Basic daily fee – all residents can be asked to pay this fee which is used to cover costs such as cleaning, maintenance and laundry
  • Means-tested care fee – calculated based on an assessment of the resident’s income and assets
  • Extra and additional service fees – an itemised account must be given to the client once the service has been provided:
    • Extra – providers which have been approved to provide extra services can charge residents for higher than average services such as accommodation, food and recreational services
    • Additional – fees charged for services which a resident has asked the provider to provide and must be agreed with the resident before services are delivered; and
  • Accommodation payments – for the cost of accommodation which can be paid as a lump sum, a daily amount, or a combination of both.

On top of guiding clients through application and entry into permanent residential aged care, strategies to reduce a client’s assessable assets and assessable income can help to reduce their means-tested care fee, improve their cash flow and achieve estate planning outcomes.



The current advice landscape for aged care - Michael McLean

Aged care demand continues to grow.  The recently released 2016-17 Report on the Operation of the Aged Care Act 1997 highlights that the ageing population and increasing number of people with dementia are two key factors driving this demand.  The report also explores the current state of the three main types of care that the Government provides to assist older Australians.


AGED CARE DEMAND

In the report the Minister for Aged Care, the Hon Ken Wyatt AM MP states “our aged population is growing at an unprecedented rate”.


As at 30 June 2017, there were 499,000 Australians aged 85 and over. In ten years’ time there are projected to be 672,000 aged 85 and over, an increase of 35 per cent. The number of people aged 65 and over is also expected to increase from 3.8 million to 5.2 million by 2027.


This projected growth in the ageing population suggests a substantial increase over the coming years to the 1.3 million current consumers of aged care services. 


In 2017, there were an estimated 365,100 Australians with dementia, nearly half of whom were aged 85 years and over. The number of people with dementia is anticipated to grow to around 900,000 by 2050.


This increase in dementia cases is also adding to the growing demand for aged care.  At 30 June 2017, half of all residential aged care residents with an Aged Care Funding Instrument (ACFI) assessment had a diagnosis of dementia.


In financial year 2016-17 the Australian Government spent $17.1 billion on aged care, of which 70 per cent of expenditure was for residential aged care.


But whilst the traditional image of aged care is often associated with residential care, Wyatt said that “today the focus is on supporting people to stay in their own homes for as long as possible.


Consumers have made it clear that this is what they want, and it also makes good economic sense”.


The two main forms of Government subsidised home care are the Commonwealth Home Support Program (CHSP) and home care packages.


COMMONWEALTH HOME SUPPORT PROGRAM

Through financial year 2016-17, 722,838 people received services through the CHSP, and an additional 74,475 through the Western Australian Home and Community Care (HACC) program.


The CHSP is entry-level home support with a range of services to assist people aged 65 and over to live independently at home and in the community.


Types of services which are funded through the CHSP include:

  • Meals and other food services
  • Transport
  • Personal care
  • Home maintenance and modifications; and
  • Nursing.

To access the CHSP clients must have an assessment by a Regional Assessment Service (RAS). Clients can contact My Aged Care to organise an assessment.


The My Aged Care staff will ask questions about the client’s current needs and circumstances to determine eligibility for the CHSP and organise an assessment if required.


For CHSP clients who need a greater level of care but still want to stay in their home, then a home care package may be the next appropriate step.


HOME CARE PACKAGES

Home care packages are a more holistic form of care than the CHSP. They can be tailored to meet clients’ personal needs with the help of case management, known as Consumer Directed Care (CDC).


Services which can be chosen by the client include personal care, support services and clinical services.

Access to a home care package is by approval from an Aged Care Assessment Team (ACAT) assessment, or Aged Care Assessment Service (ACAS) in Victoria, which, like a RAS assessment, can be organised by contacting My Aged Care.


An ACAT/ACAS assessment can approve an individual for Level 1 (basic care needs) up to Level 4 (high-level care needs).


With the growth in aged care demand and the Government support for care at home, home care packages saw significant growth and change through 2016-17.


The number of home care consumers as at 30 June, 2017 was 71,423, an increase of 7,354 or 11.5 per cent from 30 June 2016, with the average age of entry being 80.2 years (unchanged from 2015-16). 


As at 30 September, 2017 there were 101,508 ACAT/ACAS approved persons waiting in the queue for either their first home care package or on an interim package.


Whilst the statistics regarding the length of the queue are not available, Mr Wyatt commented in September 2017 that “across the nation it’s 12 months plus.”

Clients can check their My Aged Care portal or call My Aged Care to check their individual expected wait time.


The report confirms the current fees which a home care recipient may be required to pay:

  • Basic daily fee – the maximum is 17.5 per cent of the single rate of the base Age Pension; and
  • Income-tested care fee – paid by those assessed as having sufficient income to contribute to the cost of their care.

Strategies that reduce a client’s assessable income can help to reduce their income tested care fee and improve cash flow.


PERMANENT RESIDENTIAL AGED CARE

For clients who are unable to receive the level of care they need from a home care package, the Government subsidises permanent residential aged care.


This includes services such as personal-care services (help with daily activities such as dressing, eating and bathing), accommodation services and support services (cleaning, laundry and meals).


Access to permanent residential aged care, like for home care packages, is through approval from an ACAT/ACAS assessment.


At 30 June, 2017 there were 178,713 people receiving permanent residential aged care, an increase of 2,724 from 30 June, 2016, which is a significantly lower increase than the 11.5 per cent increase in home care package recipients. 


The average resident is 82 years for men and 84.6 years for women and the average length of stay is aged care is 2.9 years, which may be useful when determining a planning timeframe for aged care clients. However, this is an average and previous statistics have shown that about one in five residents stay in permanent residential care for five years or more.


Additionally, the report confirms the Government’s current structure of fees which care recipients may be required to pay:

  • Basic daily fee – all residents can be asked to pay this fee which is used to cover costs such as cleaning, maintenance and laundry
  • Means-tested care fee – calculated based on an assessment of the resident’s income and assets
  • Extra and additional service fees – an itemised account must be given to the client once the service has been provided:
    • Extra – providers which have been approved to provide extra services can charge residents for higher than average services such as accommodation, food and recreational services
    • Additional – fees charged for services which a resident has asked the provider to provide and must be agreed with the resident before services are delivered; and
  • Accommodation payments – for the cost of accommodation which can be paid as a lump sum, a daily amount, or a combination of both.

On top of guiding clients through application and entry into permanent residential aged care, strategies to reduce a client’s assessable assets and assessable income can help to reduce their means-tested care fee, improve their cash flow and achieve estate planning outcomes.


 

For further information on how Golden Age Physiotherapy may provide Aged Care Health Services and solutions to your facility, please do not hesitate to enquire at enquiries@goldenagephysiotherapy.com.au


The Author of this article is Michael McLean, originally posted on the Australian Ageing Agenda. The orginal post may be found at: https://www.moneymanagement.com.au/features/tools-guides/current-advice-landscape-aged-care