Speech to the National Aged Care Alliance
Novotel Collins Street Melbourne
26th May 2016
(Check against delivery)
Thank you for having me at the National Aged Care Alliance meeting.
I’m very pleased to be here and want to talk to you about the Government’s budget commitments and also future policy development.
I have been reviewing your Election Position Statement and also the “End the Aged Care Lottery” election campaign material so I’m quite clear on what members of the Alliance are seeking in aged care.
2016-17 Budget – ACFI
The 2016-17 Budget provides an overall investment of more than $17 billion in aged care.
Aged care has been undergoing transformational reform with the Coalition implementing its plan to create a consumer-driven market approach.
Budget commitments continue to support this plan.
I want to be up front and talk to you about the changes to the Aged Care Funding Instrument.
As you know we have had to take corrective action on residential aged care funding.
Current claiming patterns for the ACFI (Aged Care Funding Instrument) create a budget blow out of an additional $3.8 billion over the next four years.
The data Government has doesn’t support the claim that this huge increase is a result of increased frailty.
It has only occurred in one ACFI domain – Complex Health Care – and there has been a sharp spike in one year.
Neither of which is consistent with increased frailty.
I want to emphasise that the overwhelming majority of operators do a great job and are doing the right thing however about 1 in 8 funding claims from providers this year have been downgraded on review.
In the budget Government has acted to reduce the additional growth by $1.2 billion. This is in addition to the MYEFO measures.
This is not a cut to funding.
All this will do is starting to bring expenditure back towards what has been budgeted for residential aged care.
Even with this corrective action Government funding for residential aged care will still continue to grow at a sustainable rate of 5.1% a year.
The changes being made will introduce stronger requirements for providers to justify the level of funding being claimed in line with contemporary care practices.
Of the utmost importance has been the need to ensure that those residents with the highest needs continue to receive the highest level of funding available to support them.
This is not the first time ACFI funding has blown out.
It occurred under the last Labor Government who took similar action to reduce increased growth.
This indicates that changes are needed so that there is greater certainty of aged care funding for the sector and for the Australian taxpayer.
I am concerned the current Aged Care Funding Instrument (ACFI) model is too complex and not always clear about what can be claimed.
We know how concerned the sector is about reform in this area, so we will consult with you and seek advice on ways to strengthen how care funding is determined.
The Government, has through the Department, been consulting with the sector since August 2015 on the broader need for reforms to ACFI through the Aged Care Sector Committee and through a sub-group of that Committee.
This is consultation and ultimately Governments decides and determines the changes and the policy.
Government wants to look at separating assessment from providers and having it done by a third, independent and impartial party.
I have seen that both the NACA materials and the Reform Roadmap support longer term changes for an assessment that is service agnostic.
This sort of thinking can be considered as we look to the changes that need to be made to the ACFI and again in the context of the merger of home care packages and the Commonwealth Home Support Program in 2018.
We are committed to working with you to get this right and to transition smoothly and cautiously to the best model possible.
As economically responsible managers we have had to take this course of action. The economy can’t support a $3.8 Billion funding blow out. We have to bring funding growth back to the budgeted trend over time.
However if you have ideas about alternative ways we can achieve the same outcome I would love to hear them.
2016-17 Budget – Rural and Remote
As part of this year’s budget we are providing an additional $102.3 million over five years to improve aged care services in the bush.
As a Member of Parliament representing some of Australia’s most remote communities, I am passionate about ensuring our elderly can remain in these towns for the rest of their lives, in comfort and with the support they need. All of us in this room know that a key part of ensuring older Australians live a happy life into their later years, is allowing them to remain in the community they’ve known for much of their lives, close to family, friends and facilities.
Our Government will also increase the viability supplement rate paid to remote residential services and some special needs services. The most recent Census data will now be used to classify providers’ remoteness to determine their funding, rather than the outdated system based on old.
Around 250 mainstream, 100 multi-purpose services and 7000 home care packages will benefit.
As I have always said, further consideration may need to be given to funding arrangements for rural and remote areas as we move closer to a consumer driven market based approach.
2016-17 Budget – My Aged Care
We are also allocating $137 million for the My Aged Care contact centre, to keep up with the huge volume of calls and correspondence now coming in, from people looking to be more informed about their aged care options.
I know that having informed consumers is something the National Aged Care Alliance is calling for as part of its election statement.
You know that I am already pursuing ways of increasing transparency – including have information about fees and charges on the website – as well as creating the website as more of a Trip Adviser style portal. I will continue to pursue this direction.
Government has already taken many actions to move aged care to a consumer driven system.
Some of the key reforms include:
Home care package funding following the consumer from February 2017
Establishment of the independent Aged Care Complaints Commissioner
Establishment of the Severe Behaviour Response Teams – which by all reports are working well
Improved information and services at the My Aged Care Gateway. I know there have been issues along the way but we remain determined – as our budget commitment demonstrates – to have My Aged Care as a fully functioning gateway to the aged care system
Greater equity and transparency around consumers financial contributions to their care. Again I acknowledge there has been some issues with DHS implementation of the means testing but again we are committed to improving this experience for consumers and providers alike.
Red tape reductions to streamline and make the system more efficient including scrapping the previous Governments prescriptive process and guidelines of accommodation price setting and removing the requirement for providers to apply for home care packages through the ACAR.
There are other arrangements and processes in train which will streamline dementia training and management advisory services as well working to create an end to end national advocacy program.
We have also committed to supporting industry develop its own workforce strategy. Details of which are still being worked through by the Department.
We are entering a new era in aged care in this country.
The Aged Care Sector Committee Roadmap for Reform will guide the way.
The work of the Alliance will also inform Governments future policy development.
A re-elected Turnbull Government will continue what it has started – creating a consumer driven aged care system capable of meeting the demands of an ageing population and their expectations of quality and service.