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Aged care reforms under fire

Date

Mark Metherell

Big cost increases are facing those who need care to stay in their own homes.

Big cost increases are facing those who need care to stay in their own homes. Photo: Peter Braig

THE prospect of elderly people getting the right aged care at the right price under the Gillard government's aged care reforms has been challenged in a new industry report.

The report is critical of the $1.6 billion clawback from nursing home operational funding to finance other changes and describes the proposed aged care costs watchdog ''as another layer of bureaucracy'' that was unlikely to work.

The critical findings on the future funding and regulation of nursing home care costs follows the disclosure by The Age of big cost increases facing those who need care to stay in their own homes.

The latest report by an aged care industry analysis firm, Grant Thornton, questions whether the proposed changes will meet the demand for a more consumer-friendly and financially sound industry.

The government had failed to implement key recommendations of the Productivity Commission to transform aged care into an ''entitlement'' system so that funding was allocated to individuals rather than providers. This would have formed ''the cornerstone of a dynamic system'' that would empower consumers and spur greater competitiveness.

But despite acknowledging these advantages, the government's plan deferred consideration of this critical reform until after 2016-2017, the Grant Thornton report said. It also questioned the plan to establish the Aged Care Financing Authority (ACFA), the proposed watchdog to combat the imposition of ''super bonds'' and unreasonably high accommodation charges that do not reflect the true value of the service.

But the cost of the various elements that comprise aged care would be difficult to measure constantly across the sector.

''It will be virtually impossible for ACFA to police this effectively,'' the report said.

The government's plan to strip $1.6 billion from recurrent funding to nursing homes because of ''over-claiming'' of subsidies was not based on comprehensive information on costs, and although much of that money would go to boost wage rates, that would not offset the cut in funding.

Reductions in the revenue to nursing homes might result in providers gaining access to the capital required to build new facilities, ''only to find they cannot be operated viably. Without certainty around care revenue, it would be inappropriate for providers to progress their extension plans.''

The report raises doubts about the extent to which people will be able to stay in their own homes even with expanded aged care support services. It would not be practical or safe for many to remain in their own homes, as they required the ongoing support of spouse, children or friends. But given the composition of the baby boomer population, access to such support would decline.

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