New Study into Residential Care Costs

The Turnbull government has announced a new study into the comparative costs of providing residential aged care to older Australians.

The Minister for Aged Care Ken Wyatt described the study as “a landmark investigation”.

“The Residential Aged Care Resource Utilisation and Classification (RUC) study would help guide long-term reform in residential aged care funding,” Wyatt said.

“This is the first time relative costs have been systematically studied since the 1990s.

“The government wants to work with the sector to ensure the way we fund residential aged care is fair, stable, encourages innovation and is easy to apply and understand.

“Understanding how resident characteristics drive care costs, what costs are common for all residents and what impact the location and size facilities has on costs, will help us better design the funding system.”

The federal budget allocated $18.6 billion to aged care in 2017-18, including $12.5 billion for residential care.

Wyatt said the study would be conducted by the Australian Health Services Research Institute at the University of Wollongong and build on the report completed earlier this year called  Alternative Aged Care Assessment, Classification System and Funding Models.

“The Turnbull government is committed to open and transparent engagement and will rely heavily on the aged care sector for help,” Wyatt said.

The government said the Department of Health had sent out expressions of interest to residential aged care services to participate in the study and a significant number of services had already agreed to take part.

“I am pleased to have received such a positive response when we invited participation in the study,” Wyatt said.

Aged and Community Services Australia CEO Pat Sparrow told Pro Bono News ACSA welcomed the study for the chance it offered “to glean valuable insights into the impact of factors like resident characteristics, and other variables like the size and location of a facility, on costs in residential aged care”.

“Ultimately, our hope is this study of relative costs will feed into a better understanding of residential aged care costs and help to inform a future model of aged care funding that is both stable and sustainable,” Sparrow said.

“As a relative resourcing study, the focus will be on the existing level of funding. There remains a need for a broader community discussion about the overall quantum of funds, the public and private mix of those funds and how the quality of care desired can be afforded.”

The government study is expected to be completed within 12 months.

The Turnbull government has also extended the timeframe for the review of National Aged Care Quality Regulatory Processes.

Wyatt said the reporting timeframe for the review was being extended by four weeks following a request from the chair of the review, Kate Carnell.

“Given the high level of interest shown by regulatory bodies, aged care consumers, industry and academics, it has become clear that more time is needed for the review,” the minister said.

“The review panel has convened 39 meetings with key contributors and has received over 400 public submissions. Extending the review will allow the panel sufficient time to consider all submissions and the intelligence gathered through these many conversations.”

The government commissioned the review to determine why the Commonwealth’s aged care quality regulatory processes did not identify the extent of failures and shortcomings of Commonwealth-funded care in two wards at South Australia’s Oakden Older Persons Mental Health Service.

The review was also examining improvements to the regulatory system that would increase the likelihood of immediate detection and swift remediation of failures in care by providers.

The review, which was due to report on 31 August 2017, will now provide its report to the minister on 29 September 2017.