industry & reform
‘ Let the market sort it out ’
One provider ’ s insight on funding reform .
By Elise Hartevelt
An aged care provider says the reason facilities are closing is due to the government ’ s inadequate funding model .
Over 60 per cent of Australian residential aged care homes have been losing money , forcing them to shut their doors while leaving many older Australians in precarious situations .
Aged Care Insite spoke with Cameron Kirby , the founder of aged care provider Kirby Consulting Group , who blamed closures on the sector ’ s unsustainable framework .
“ Aged care is in a state of crisis and has been for a long time ,” Kirby says .
“ Many providers are in a position where they ’ re not allowed to charge residents more to meet the facility ’ s costs . And the government isn ’ t funding them enough to cover those costs either .
“ If you can ’ t afford to pay for staff because you ’ re not getting funded enough and the government ’ s not letting you charge more , a perfect storm is happening .”
StewartBrown ’ s survey from December 2021 showed that providers are losing revenue of $ 10.31 per bed per day regardless of the $ 10 daily supplement fee .
In response , the 2022-23 Federal Budget introduced a new funding scheme , the AN- ACC , that will commence in September .
Instead of the current $ 188.60 funding per resident , the AN-ACC starts from $ 216.80 , leading up to $ 225 per bed .
Although Kirby welcomes the raise in funding , he says it ’ s also “ death by a thousand cuts ”.
“ The government is funding a gap but it ’ s not sufficient for older facilities to earn enough money to get by .
“ It would be much easier if the government would say : ‘ We ’ re going to fund you for a certain amount , and then you ’ re free to charge what you can get and let the market sort it out ’,” he says .
“ The government still has excellent safety nets available to people that can ’ t afford residential aged care .”
If a future resident has assets below $ 178,839 , they are considered either a partially supported or a fully supported person .
Daily fees depend on whether a future resident is partially or fully supported .
For example , a fully supported resident only pays the Basic Daily Care Fee , currently $ 54.69 a day .
“ The government lets you charge a basic daily care fee and an additional services fee , but the provider still needs to identify those services ,” Kirby says .
“ And in doing that , they ’ re basically saying to providers : ‘ You can ’ t charge what you need to charge for you to meet your cost .’
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You can ’ t charge what you need to charge for you to meet your cost .
“ If the government would let providers charge what they want but would continue to pay for supported residents , that ’ d solve many of the problems .” Kirby is urging the government to rethink the aged care sector as a whole instead of successive administrations making minor adjustments .
“ The aged care system has been tampered with so much that it ’ s lost its way ,” he says . The current Aged
Care Act was introduced in 1997 and is the overarching legislation that states the responsibilities and rules the government must follow in the sector .
The Royal Commission ’ s report called for a new act by July 2023 , highlighting the urgent need to reform aged care legislation “ to integrate long-term support and care for older people ”.
“ The royal commission has made a series of recommendations . Some of them are good , and some are flawed , in my view ,” Kirby says .
“ The government has adopted some of those things , but it ’ s still not funding aged care to the level it needs .
“ But what ’ s even worse is that government may not be fully aware of this either .”
A new Aged Care Act has been in the planning since March last year . ■
agedcareinsite . com . au 13