The Community Business Bureau (CBB) wholly owns The Salary Packaging People (TSPP).  Explore the TSPP website to find out additional information on novated leasing and salary packaging.

What can aged care providers do now?

The Royal Commission into Aged Care Quality and Safety published its final report at the end of February, with far reaching recommendations for a complete reform of Australia’s aged care system. The recommendations consider significant structural reforms to the funding and delivery of aged care, and the legislation and bodies that govern it. At the moment this is ‘just’ a very comprehensive set of recommendations – some of which include alternative options. We don’t know yet which of the recommendations the Federal Government will accept and introduce, but we do know that they have committed to working through the recommendations as part of the budgeting process. There’s political pressure for systemic change in aged care, so whilst we may not see all recommendations adopted, we should expect to see major transformation of the sector in the years to come.

We anticipate that we’ll be talking a lot more about the Royal Commission over coming months – and years – including the systems that will develop to govern and regulate the provision of aged care. For now, we’re concentrating on the impacts on providers. Michael Lye, Department of Health Deputy Secretary responsible for Ageing and Aged Care, has already flagged that this will require a transformation from aged care providers, similar to that experienced by disability service providers as they transitioned to the NDIS. He should know – Lye was formerly Deputy Secretary responsible for disability and carers policy at the Department of Social Services. He has already laid down a challenge to providers that it will take strong leadership and workforce changes to transform aged care provision.

Key themes

Here we consider some of the key themes of the Commission’s report and recommendation, and the actions that providers can take now in preparation for change.

The underlying principle of the Commission’s recommended reforms is a person centred, rights based approach, realised through a universal right for older Australians to access high quality, safe and timely aged care support based on assessed needs. This is important because it informs access to the system, meaningful choice and control for older people and the funding available to provide services. Alongside demographic change, the emphasis on care according to need, rather than rationed by funding and supply, is a key driver for growth in public spend on aged care, and in the sector itself.

The person centred focus puts an emphasis on accessibility of aged care and integrating the consumer voice throughout the system. This has implications for service models – including anticipated preferences for care at home and meaningful choice for customers – as well as governance and regulation. The choice and control perspective is reflected in recommendations for increased reporting and public transparency over performance, including published star ratings for providers.

The Commission recommends a single program of aged care, that includes five categories of care and support:

  1. Respite care
  2. Social supports
  3. Assistive technology and home modifications
  4. Care at home, on a personalised budget
  5. Residential care

This has significant implications for providers of the Commonwealth Home Support Program, as the recommendation is for this to be integrated into care at home packages.

The Commission recommends a care management model, with aged care customers allocated a care manager by their provider.

The Commission identifies four areas that require immediate improvement – nutrition, dementia care, restrictive practice and palliative care. It proposes that dementia care, palliative care and culturally safe practices that support the diversity of older Australians are core business for aged care providers. The Commission gives specific consideration of the pathway for older Aboriginal and Torres Strait Islander people.

Access to health care is identified as an area for improvement for older people receiving agreed care services – particularly allied health and oral health.

For residential services, there is a preference for smaller, more homely facilities, and for all facilities to be dementia friendly in their design.

The Commission describes the aged care workforce as ‘understaffed, underpaid and undertrained’. They anticipate a 70% growth in the aged care workforce, with the intention of professionalising personal care, with career pathways, and improved pay and terms and conditions for workers. They express a preference for a permanent, rather than casualised workforce. In practice, this would mean the regulation of the workforce through minimum qualifications to Certificate III level and a minimum level of spoken English. Workers would be screened for criminal history and expected to subscribe to a code of conduct. Expect mandatory training in relation to dementia care, palliative care and culturally safe and trauma informed service models, alongside requirements for regular and ongoing training. This is similar to the regulation of the NDIS workforce, which is subject to screening requirements, mandatory training and a code of conduct for person centred care.

The Commission recommends a minimum amount of time per resident per day for personal care workers and registered nurses, plus arrangements for workers providing care at home to be supervised by a registered nurse.

Other aspects of the Commission’s recommendations will see increased demand for allied health workers and behaviour support specialists.

The Commission is clear in its view that governance of aged care providers has been lacking, and governing bodies need to increase their capability and capacity. They recommend that provider governing bodies should have a majority of independent non-executive members, who meet a fit and proper test.

The report includes recommendations for strengthening the governance quality standard to require governing bodies to have a range of appropriate knowledge, skills and experience, alongside requirements in relation to a care governance committee; risk management; customer feedback and complaints.

Under the Commission’s recommendation, all providers of subsidised aged care would need to be approved, and providers of residential aged care and high level home care supports will need to be accredited. This will have significant implications for 905 providers of CHSP services that are not currently subject to an aged care approval process.

Future regulation will consider both quality of care and prudential standards, with increased powers for regulators to enter premises and access information, and increased penalties for non-compliance – including civil penalties for members of governing bodies. With increased regulation and stronger quality standards will come a requirement for automated reporting – which will require digital competence from providers. Again, there are parallels with NDIS here, with providers adopting new technologies to manage client data, workforce, workflows and reporting.

The recommendations include a significant change in how aged care is funded, with personalised care budgets based on an assessment of need, rather than rationing of resources. Implementing the principle of universal access to aged care services would remove customer co-contributions for care, although they would continue (on a means tested basis) for accommodation and daily living costs. For residential aged care providers, phasing out refundable accommodation deposits will have a significant impact on access to – and the cost of – capital, with future arrangements to be determined. For home care service providers, a shift to payments in arrears will require changes in financial administration and cashflow management.

Although an activity based payment model is preferred, the Commission does recommend some block funding and direct commissioning of services in areas that are under supplied, or where service viability is a risk – particularly in regional, rural and remote areas, and for culturally safe care for Aboriginal communities.

The Commissioners support workforce development, with recommendations to reimburse training costs for personal care workers in core areas such as palliative care.

Preparing for change

Whilst we don’t yet know which of the Commission recommendations will be implemented, providers should expect major change and should be preparing for it now, rather than waiting for the Government’s implementation plan. You can start with a self assessment of which of the Royal Commission recommendations directly affect you and will change the way that you work or are funded. Then consider what actions are in your control, that you can start working on now.

We’ve suggested some key areas below that you can work on, without necessarily knowing the detailed requirements. These will identify potential improvements to better position you for managing the changes ahead and responding to new regulatory requirements and quality standards.

Are your governing body and leadership team up to the job of transformational change, and to the likely future requirements for higher standards of governance and quality management of services?

We’ve worked with over 100 disability service providers during and following the transition to the NDIS. One of our key observations was the enormous pressure on under-supported leadership teams, and the behaviour of some governing bodies in underestimating the scale of change and failing to adequately engage in the work.

Now is the time to consider if your governing body is sufficiently independent and has the right mix of skills, knowledge and experience to take you forward. This might mean some changes in composition of your Board, and/or some development to equip them for the work ahead. The same applies to your leadership team. As a Board – consider what support you can make available to maintain your leadership team’s motivation and wellbeing throughout the change process.

Where is the consumer voice in your organisation? Is it reaching decision makers? Two key areas you can work on here are:

  • Developing mechanisms for consumers to ‘speak truth to power’ and to engage in planning and decision making processes.
  • Understanding and improving your customer journey – with a lens on person centred care and choice and control. Experience from the NDIS indicates that customers tend to stick with the familiar for an initial period, and increasingly exercise choice and control as they become more confident in selecting and moving providers and services. If the same applies to aged care, positive customer experience will be a strong driver of your future performance.

There are aspects of the workforce recommendations that you can be working on now.

Current workforce

  1. Suitability and capability of your staff: can you evidence current screening of your staff to determine their suitability for working with older people? Can you evidence the qualification levels of your employees – particularly those involved in direct care? What training can you offer staff to ensure that have a suitable level of qualification and competence in areas such as palliative care, dementia care and cultural safety?Reviewing and documenting what you have in place currently will allow you to identify gaps between your current practice and the likely future requirements. You can then develop plans to address those gaps.
  1. Culture and change: how does your existing culture reflect a person centred approach with choice and control? Are your people ready for change?Again, understanding your current position gives you the start point from which you can prepare for change. There is no ‘one size fits all’ approach here – culture change (if required) is a complex beast. Making sure you know your employees will help you to navigate change and mitigate impact on employee wellbeing. Who’s excited and up for the challenge and personal growth; who are the role models for person centred care; who’s influential within the team; and who will be anxious and stressed? Identify who can champion and manage change for your organisation, and build their capabilities in change management.

Future workforce

With an anticipated growth of 70% in the direct care workforce, there’s going to be some stiff competition for talent. If you don’t have a workforce plan in place already, you need to start planning. If you have one, it may need a review and refresh. Look at your supply chain for new workers – including your relationships with RTOs and universities – and your employee value proposition. What would make a well trained, person centred employee want to work for you rather than another provider – for example professional development opportunities, a high quality salary packaging solution, employee engagement activities etc?  And don’t forget your corporate resources – will you need more resources, or different capabilities in your corporate teams such as HR, marketing and finance, going forward.

Whilst we don’t have the details of new quality standards yet, if the recommendations are adopted, we can expect to see more robust provisions around feedback and complaints handling, whistleblowing protections, and serious incident management and reporting. You can work on reviewing and strengthening these policies now.

One of the natural consequences of the Commission recommendations is that providers are going to have to be tech savvy. Expect a heavy push towards digital reporting and data management, alongside digital as an opportunity for providers find efficiencies. This might include automating background processes so that frontline staff have more time for care. Having digital capability across your organisation will become increasingly important.

Although we expect to see more money going into aged care, how providers are paid looks likely to change. For residential care providers, the phasing out of the RAD will present new challenges regarding capital financing. For home care providers, payment in arrears impacts significantly on cashflow. Some scenario planning will test out your risk exposure, so you can plan mitigating actions.

Finally, given the obvious undersupply of services for older Australians, there are significant opportunities for growth in the Commission’s recommendations. In home care alone, the Commission is advocating for the current waiting lists to be cleared by the end of 2021, and for a maximum one-month wait thereafter. Understanding your market – including customer segments, market size and competitive environment – and developing a growth plan will position you to realise your growth potential.

Elevate your impact with expert support

Discover the not for profit experts that are committed to building the capacity and sustainability of our sector.