LASA’s Commissioned report on the Government’s changes to ACFI has now been updated to include a more enhanced and detailed analysis of of how residents will be assessed under the new rules.
Sept 2012 Impact of changes to ACFI over the next four years
LASA MR Aged care providers facing a $750 million revenue shortfall 100812
CIE Report Estimate of ACFI impacts – 130812
Aged care providers face a revenue black hole of more than $750 million over the next two-and-a-half years, a new independent financial analysis of changes to the Federal Government’s Aged Care Funding Instrument (ACFI) has revealed.
The research, undertaken by the Centre for International Economics (CIE) for Leading Age Services Australia (LASA), predicts that 89 per cent of aged care facilities will face “unrecoverable” losses of revenue under the revised funding model, which came into effect on 1 July, 2012.
“This ultimately means an average reduction of between $20,000 and $23,000 in care funding for each affected resident every year, ” Mr Mansour said.
“Many nursing homes and in-home care providers are already under financial pressure and LASA has serious concerns that if the way aged care is funded is not addressed, there could be an impact on staffing levels and on the important services which are the very foundation of quality care.
“The average loss per aged care facility is more than $125,000 each year, with some facing revenue shortfalls of up to $560,000. Smaller and rural facilities are potentially the most affected.
“As running costs continue to rise, aged care providers – unlike most businesses – cannot increase care fees as they are set by the Federal Government.
“While we agree that the initial ACFI reforms in 2008 were a positive step, we cannot accept the Government’s new regime which redirects money from resident care to other elements of the Living Longer, Living Better (LLLB) aged care package.”
LASA’s immediate priority is to work with the Federal Government to:
Mr Mansour said LASA was committed to identifying a long-term solution to aged care funding.
“The Australian aged care industry argues that the way government funds aged care needs to change,” he said.
“To ensure a viable aged care industry , we’re strongly advocating a move away from a funding model which is artificially constrained by the Federal Government’s budgetary limitations, to one which genuinely matches care funds to people’s needs.
“LASA strongly supports the call of the National Aged Care Alliance for an independent and comprehensive cost of care study as an urgent priority.
“We support the importance of aged care reform. We will work collaboratively with the Federal Government and other aged care stakeholders to refine when and how some of those reforms are introduced so that Australia has a sustainable aged care industry that meets the needs of older Australians.”
Key points
About the study:
Changes to the Aged Care Funding Instrument (ACFI) were announced to occur from 1 July 2012. LASA engaged QPS to undertake an independent collection of data from aged care providers across Australia. QPS analysed the impact of the data from a sample size of 275 residential aged care facilities at a total of 18,345 residents, a sample size of over 10 percent of all aged care residents nationally.CIE was engaged to undertake an independent analysis of the sample data collected by QPS and project the impact across the entire industry by developing a robust population wide model of aged care residents
Further information: Gerard Mansour, 0417 518 103
The 2.6 million Australians who provide unpaid care and support to family members and friends are being recognised in a national carer awareness initiative launched on 1 August 2012.
Care Aware aims to recognise, support and appreciate those who provide full or part time unpaid personal care, support and assistance to people of all ages with disabilities, medical conditions, mental illness, frailty due to age and people who have alcohol and drugs issues.
Carers can be children, parents, siblings, grandparents, uncles, aunts, friends and neighbours and come from every ethnicity and every region of the country.
As well as promoting the range of benefits, services and supports available, the campaign wants to encourage hidden carers, such as people who see themselves first as parents, partners, a child or young person, to recognise themselves as having a caring role.
Through the Care Aware website, also launched on 1 August 2012, Australians can access important information about caring and share their stories in an online forum.
In October, to help raise awareness of Care Aware, a group of professional musicians will form the ‘Impossible Orchestra’ and play for 24 hours with the help of audience members including carers, celebrities, politicians and sportspeople.
The free concert aims to emphasise that it is impossible to predict when we are going to become carers or need care ourselves and that like caring, playing for 24 hours can be achieved when we understand the challenge and work together.
The concert will take place at Hamer Hall in Melbourne from 5pm on Saturday 27 October.
McCann Worldgroup is delivering the Care Aware campaign in consultation with Carers Australia. Over $1.6 million dollars has been provided by the Australian Government to fund the campaign, which is an initiative under the National Carer Strategy.
LASA AND AGED CARE REFORM
Gerard Mansour, National CEO, Leading Age Services Australia
It is clear from the recent and more detailed analysis of the aged care reform package (Living Longer, Living Better (LLLB), that there needs to be a number of changes and refinements to this reform package in order to ensure we have a viable and flourishing industry for the long term.
LASA has publicly announced its strong opposition to the recent reductions to ACFI funding levels, which reduce the level of funding that aged providers would have otherwise received.
LASA is calling on Government to provide additional funding for aged care reform so that we can avert the need to ‘redirect’ aged care funding from residential care to support other elements of the reform. Any such additional funding would require Cabinet approval.
In addition, LASA is calling for various measures in the reform package, such as the ability to charge for additional hotel and lifestyle services, to be brought forward. In our discussions within the National Aged Care Alliance (NACA), LASA expressed the concerns of members about the financial impact of various elements of the LLLB package. Subsequently, NACA members late last week endorsed the below statement. This NACA statement calls for various financial and sequencing issues to be addressed to ensure the LLLB reform package successfully achieves its objectives. A copy of the NACA statement is available below for members to download.
Funding and Aged Care Reform revised
ACFI REDUCTIONS AND MONITORING GROUP
As members are aware, LASA has made clear public statements, and representations, opposing the decision by Government to reduce care subsidies below where they should be at 1 July, 2012.
The Minister has established a new ACFI Monitoring Group, which will hold its first meeting on 10 August, and the LASA representative is the national CEO Gerard Mansour.
LASA remains of the view that prior to any changes to ACFI, Government should have conducted an independent cost of care study. As members are aware, the changes announced by Government to ACFI that apply from 1 July 2012 are the ‘first phase’ of a number of adjustments aimed at both reducing ACFI growth and redirecting residential care funding to other elements of the LLLB package.
RELEASE OF FINDINGS – QPS ACFI COMPARISON CALCULATOR
LASA would like to congratulate the many members who submitted information via the QPS ACFI Comparison calculator so that LASA can undertake an independent analysis of the impacts of this ‘first phase’ of reductions in ACFI funding levels.
There was an excellent response rate and the QPS data has generated a national sample size exceeding 18,000 residents from across Australia. An independent analysis of this data is being completed, and the findings will be released in the middle of next week –ahead of the first meeting of the ACFI Monitoring Group.
IMPACT ANALYSIS AND NEXT STEPS
The release of findings from the independent analysis of the data compiled using the QPS Comparison Calculator, will contribute substantially to the next steps of LASA in responding to the identified need for changes to the LLLB aged care reform agenda.
When members receive the independent report on the QPS findings, LASA will provide a ‘Detailed Briefing and LASA Next Steps’.
OTHER REFORM MEASURES – ACFA AND SWAG
In addition to the ACFI issues, it is important to note that LASA is taking a broad approach to the importance of ensuring we have a viable and flourishing industry in all areas of the LLLB reform. Consequently, LASA has commenced discussions with Government and the Department about a number of elements of the LLLB reform measures. This includes various measures in regard to the Aged Care Financing Authority.
LASA members will recall the results of our earlier LASA survey which occurred shortly after the release of the LLLB reform, that identified some $3.5 billion of capital works projects were being questioned because of various uncertainties regarding the reform measures.
It is anticipated that the Minister will shortly announce the membership of the Aged Care Financing Authority as well as the creation of an ‘Interim Operating Framework’ for ACFA.
LASA has provided feedback that ACFA must take a ‘light touch approach’ to price regulation so providers receive the flexibility they need when setting prices from 1 July 2014. This includes ensuring the system to approve pricing takes a ‘by exception’ approach to price setting, so that any requirement for individual approval of price setting is indeed ‘exceptional’ by nature.
LASA does not support any model where a central agency, like ACFA, would seek to implement a system of individual price approval for each aged care provider. Rather a system that is unobtrusive, based around ‘exceptions’ and where providers openly publish their prices would still certainly ensure consumers receive appropriate information.
In addition, LASA is representing members on the Aged Care Strategic Workforce Advisory Group (SWAG), being chaired by Fair Work Australia Commissioner Anne Gooley. The current focus of the SWAG is to recommend to Government both the conditions and framework upon which the Workforce Compact will be implemented for both residential and community care in the light of the new CAP payment which has been announced. Its chair, Commissioner Ms Gooley, will lead the development of an Aged Care Workforce Compact in close consultation with the aged care sector and unions.
Leading Age Services Australia was officially launched at Parliament House in Canberra on May 21, 2012.
Download a briefing on the event and other start-up activity from the Presidents of the three founding organisations.