No products in the cart.
Payal Kapoor
Chief Financial Officer
13th March 2024
Summary of Final Report of the Aged Care Taskforce
Strategy
The final report of the Aged Care Taskforce was published last night, but does it provide all the answers we are looking for? Where do you go from here as a Provider?
In analysing the recommendations, it is evident that several recommendations introduce new approaches or emphasise specific aspects to enhance the aged care sector. These include promoting clarity and inclusion in programs, introducing new payment models, proposing structured approaches to cost coverage, suggesting significant changes in accommodation payment structures, addressing access issues in under-serviced areas, promoting innovation and transparency, and focusing on financial planning and transparency. These recommendations aim to improve the quality, sustainability, and accessibility of aged care services, indicating a comprehensive approach to addressing various challenges within the sector.
In my opinion, it does a good job in reiterating the financial and operating challenges in the aged care sector, far better than what has been done before, especially in light of growing demand with increasing ageing population, growing demands on what aged care should look like from the younger generation who will most likely be key influencers in decision making, improving the workforce experience to improve stability and quality of services provided, whilst being financially viable. However, the recommendations struggle to provide clear and detailed next steps or new innovative ways of funding or bringing accountability in the sector and also with the Governments.
I recognise and acknowledge the challenges that may have existed in assessing its final recommendations given the significant impost some initiatives can place on our already somewhat struggling fiscal economy. It is also a report on findings, not a policy.
I summarise for you below the key notes and also where I think the recommendations provide anything additional to various stakeholders to play with:
Executive Summary
- Additional funding is required to meet future demand and improve quality in the aged care sector due to poor financial viability caused by structural issues.
- The aged care sector needs further investment from the government and participants in both home and residential care sectors to meet increasing demand and community expectations.
- The Support at Home Program will be implemented in two stages, aiming to streamline and improve access for the one million people receiving services, with an estimated investment of $37 billion needed by 2050 for additional aged care rooms.
- Despite increased government investment, 69% of residential aged care providers operated at a loss in 2021-22, highlighting financial challenges and the need for improved financial viability to attract investment.
- The home care sector, while more viable, also faces financial challenges, with 69% of providers reporting a profit in 2021-22.
- The Independent Health and Aged Care Pricing Authority (IHACPA) was established to provide pricing advice for aged care services, aiming to improve financial viability and service quality.
- Older people are expected to be wealthier than previous generations, with a declining proportion relying on the Age Pension, leading to intergenerational wealth gaps and implications for government services and taxation.
- The superannuation system plays a crucial role in supporting retirement savings, with income drawdown to cover health, lifestyle, living expenses, and aged care costs.
- While many older people have accumulated wealth, there will still be a group with fewer means, particularly women and non-homeowners, highlighting the importance of addressing disparities in retirement wealth.
- Intergenerational gaps are widening, with older people generally becoming wealthier, impacting home ownership rates and the distribution of the tax burden among a shrinking working-age population.
The table below highlights what I believe has changed:
| Recommendation | Description | Adds Anything New? |
|---|---|---|
| Support older people to age in place | Underpin the Support at Home Program with clear service lists and principles. | Yes, emphasises clarity and inclusion in the program. |
| Equitable and sustainable funding | Balancing government funding and participant contributions. | No, continues the focus on funding sources. |
| Greater equity in home care participant co-contributions | Establish a fee-for-service model for Support at Home. | Yes, introduces a new payment model for home care. |
| Government funding focused on care | Continue focusing government funding on care costs. | No, maintains the current funding focus. |
| Better priced and more flexible daily living co-contributions | Funding for daily living needs to cover full costs. | Yes, proposes a structured approach to daily living costs. |
| Modernising accommodation funding and improving viability | Transition to a rental-only model by 2035. | Yes, suggests a significant change in accommodation payment structure. |
| Supporting thin markets | Consider current remoteness classification and block funding in thin markets. | Yes, addresses access issues in under-serviced areas. |
| Quality, innovation, and transparency | Encourage innovation and transparency in the sector. | Yes, promotes innovation and transparency. |
| Increasing transparency and planning for aged care | Raise awareness of financial products for future aged care costs. | Yes, focuses on financial planning and transparency. |
Keen to hear your thoughts and confident that there is a lot that can be done to improve the financial and operational sustainability of our operators. Reach out to me today!
