Roy Eccleston: Radical and costly changes are needed in aged care but will the government listen?

Once out of sight and mind, Australia’s “appalling inadequate” aged care system has been brutally exposed. Roy Eccleston explains what may finally change now.

For a long time, older Australians have been out of sight and out of mind. As the nation has grown more prosperous, many of those who helped build it have been forgotten – mistreated in aged-care homes, ignored on enormous waiting lists for help at home, out of favour in a youth-focused culture, and without a powerful champion.

Now they have one: the Royal Commission into Aged Care Quality and Safety. After 10,000 submissions and hearings across the country, it has been advised by its senior counsel that the system is appallingly inadequate – and must be rescued by sweeping changes.

Just how sweeping will be revealed by commissioners Tony Pagone QC and Lynelle Briggs in their final report due next Friday. An interim report in late 2019 has already described the problem – “a shocking tale of neglect” – so next comes the royal commission’s solution.

They are likely to be radical, and expensive, proposals that will help some of the most vulnerable Australians and create a truckload of jobs. But whether they are politically palatable is another matter entirely for a Federal Government facing massive COVID-19 deficits.

Brian Packer in his Chiton home, where he wait 18 months for help. Picture: Matt Turner

It’s clear what older Australians want: to stay in their own homes for as long as possible in their final years – typically in their 80s or beyond – and receive quality and respectful care if they do need to go into one of the nation’s 2700-plus aged-care homes. Too often, that does not happen. “Australians cannot be confident they or their loved ones will receive the care they need, whether it be in relation to health, social, cultural or emotional needs, or that they will be kept safe from restrictive practices or abuse,” said senior counsel assisting the commission Peter Rozen QC in his final submission.

It was a “national shame”, he said, that 50 sexual assaults a week occurred in aged care. And for those with dementia, about half of people in nursing homes, their treatment was sometimes “abysmal”.

Evidence to the royal commission has revealed examples of terrible food quality and malnutrition, high levels of abuse and neglect (40 per cent of people surveyed), high use of drugs as chemical restraints, and staff who are too few, underpaid and sometimes undertrained. The key concept on which everything turns is this: funding of the current system is not based on need but what the government thinks it can afford. The money is then rationed and many miss out.

That means there are about 100,000 people still waiting for a package to allow them to get help so they can stay in their own homes. It means people die waiting.

This is despite the government spending an extra $2bn on 30,000 home-care packages announced in the current budget. What the commissioners are being urged by its senior counsel to do is turn that on its head: give everyone who needs it a right to care (and to be involved in how that care is delivered), set up new independent bodies to determine what that need is and how much it should cost – and then fund it.

In other words, no more rationing, no more long waiting lists. That would have been a boon for Brian Packer, 85, of Chiton, who had to wait about 18 months for a financial package to help him remain at home.

Each day he’d struggle down to the letterbox, only to be disappointed. He valued his independence and wanted to stay out of nursing homes. His story is in SAWeekend.

But Ms Briggs has already raised doubts about elements of the counsels’ plans, describing the idea of making the new authorities independent of government as extraordinary and, with a nod to Yes Minister, “courageous”.

“I am yet to hear you present arguments, counsel, as to how the commission model will improve the quality and safety of care for older Australians, or how any such benefits would outweigh the very substantial costs and disruption involved in such a radical transformation of the Government’s administrative machinery.”

In an extraordinary exchange, Mr Pagone took issue with her, pointing out no decision had been made and that he was inclined to support an independent aged-care authority. Ms Briggs’ concern is understandable. It’s hard to believe the government would give funding carte blanche to a new authority, especially when the system would be massively expensive – perhaps a third more than currently projected.

And it is not cheap now: last year, taxpayers spent $21.5bn on aged care, with nursing homes taking two-thirds at about $13.6bn, and home care most of the rest at $6.7bn.

The latter is divided into the Commonwealth Home Support Program, a lower level of care which helps about 900,000 people stay at home, and home-care packages that range between $9000 and $52,000 over four levels. Individuals using the system contribute an extra $4bn.

That intensive help is for a relatively small slice of older people: about 4 per cent, about 170,000, received home-care packages and 5.6 per cent, or 240,000, received more costly residential care.

But in coming years the numbers will grow dramatically as more Baby Boomers hit the age when demand for care is highest – aged 79 for home care and 83 for residential care.

In 2017, 3.8 million Australians were 65 and over (15 per cent of the population), but by 2057 there will be 8.8 million (22 per cent of the population). Given this surging demand, costs were always going to blow out, and at a time when there will be dramatically fewer taxpayers to pay for it.

In 1978, there were 32.5 people of working age for each person 85 or older in 2018, but by 2058, there will be less than half that, at 14.6.

In their final submissions to the royal commission, Mr Rozen and other senior counsel, Peter Gray QC, proposed a very different and much more expensive system. They want independent bodies to run, monitor, investigate and set prices. They also propose a new rights-based entitlement to timely, top care.

As well, they want a dental scheme for the aged and the principles of the National Disability Insurance Scheme to be extended to people over 65 who have a disability.

People 65 and over are currently discriminated against by being denied access to the NDIS, instead limited to less generous aged care assistance.

Frank Weits, chief executive of SA homecare provider ACH, cites the example of someone with dementia on the NDIS receiving a yearly care package worth $200,000 while the same condition for someone over 65 would attract a maximum of $52,000 from a level four aged-care package.

Those packages might sound like a lot but, in reality, do not provide a great deal of care. They can be used for home renovations – for example removing trip hazards or installing grab handles in the shower – but tend to go to carers hired to provide a few hours of help in the garden, cleaning or in personal help like showering.

Care providers take a management fee which, in some cases, have been shown to be as much as half the total package. Typically though, a top- level package might provide about 10 hours of care a week, although some providers such as My Care Solution in Adelaide say they can provide 15.

Mr Weits says there should be level five and six packages, but there’s no sign that will be recommended.

ACH Group chief executive Frank Weits. Picture: Supplied

Mr Rozen and Mr Gray acknowledge they are calling for a “very significant additional outlay” from the government. Aged care currently costs 1.2 per cent of Australia’s GDP – less than half of some of the Nordic nations – and the counsel assisting’s recommendations would see it rise to at least 1.8 per cent by 2050, according to a Deloitte Access Economics analysis.

The dollar cost for the “four star” system favoured is not specified but looks to rise to close $35bn by the mid-2020s and $44bn by 2030. That would drive a jobs boom, with a forecast doubling the number of home-care packages to more than 300,000 by 2050.

It would also require even more nurses and carers than is already forecast. The staff needed, many of whom would have to be brought from overseas, would rise from current levels of about 319,000 to 621,000 by 2050.

The Deloitte modelling prepared for the royal commission said an increase in the Medicare levy of 0.89 per cent, or income tax by about 1 per cent would be enough to fund it. That would be almost double the Medicare levy for the NDIS – a huge number.

So would Australians pay?

Prime Minister Scott Morrison says no.

Prime Minister Scott Morrison speaks during Question Time on September 3. Picture: David Gray/Getty Images

“I will await their recommendations but the Australian Government, particularly in the middle of a pandemic, particularly when we are seeking to rebuild our economy … the one way you build your economy back is you don’t hit it with higher taxes,” he said.

“That is not our plan, it has never been our plan.”

But Julie Ratcliffe, a professor of health economics at Flinders University, surveyed Australians on this question and found a different answer.

“We found that almost 90 per cent agreed,” she says. “And the vast majority thought that the government should double its current allocation of income tax contributions – essentially they should double current expenditure.”

Importantly, though, taxpayers need to see what they would get for their money.

Professor Ratcliffe says currently the performance of the aged-care system is impossible to properly measure.

“We need far more public accountability, far more public transparency, we need routine quality of life assessments in aged care and we need public reporting.”

What many would like to see is a kind of TripAdvisor review-based system to allow public comparisons of performance. The royal commission has been asked to support a star-rating system – with four stars the desirable level – to give people confidence they are choosing a capable operator. All this means the government faces a tricky situation: aged care needs fixing, but can the nation afford to pay up for what’s needed, especially post-COVID? On the other hand, given the findings to date, can it afford not to?

Now, the aged-care sector has signalled it will target marginal seats from both major parties in the run-up to an election expected later this year.

That campaign – by church-backed, charity and private aged-care providers – wants an extra $20bn spent to clear the home-care waiting lists and to fund extra places for residential care in the next decade.

The 300,000-strong Australian Nursing and Midwifery Federation is also vowing a national campaign, right up to the election, to push for an increase in nurse jobs in aged care that have been dramatically cut in recent years.

In the past two decades, governments have managed to ignore many reports urging fixes for aged care. But, with Health Minister Greg Hunt now given carriage of aged care, and the government already pumping billions into the waiting lists, there are signs of change.

What has been missing to date is voter pressure. Older people do have influence, as then-Labor leader Bill Shorten found at the last election when he planned to fiddle with superannuation.

But when it comes to choosing between more money for education, or hospitals, compared with nursing homes, it’s not so clear that the electorate cares.

In the 2020 Eden-Monaro federal by-election, a survey of voters found that while 84 per cent said aged care was in crisis, it only ranked last on a list of seven issues of importance, and only 4 per cent said it was a vote-changer.

The industry and nurses campaigns may change that equation. On the budget question, one obvious solution is to require – or encourage – older Australians to use more of their own resources to pay. Many older Australians own their own homes but very few use reverse mortgages such as the Pension Loans Scheme to take a little of the equity from their home to pay themselves for the care that would give them a better life.

The Treasury’s recent Retirement Income Review noted that “most people die with the bulk of the wealth that they had at retirement intact”.

Superannuation was not seen as something to draw down, and “the family home is an under-utilised source to support living standards in retirement.”

In other words, many older people prefer bequesting their assets rather than spending them on their own wellbeing. While that’s their choice, is it fair for them to ask taxpayers to pay for care if they can afford to contribute?

After all, it is unlikely to be a long-term cost to the individual: major care is usually only needed in the last few years of life, typically in the 80s.

It seems a fairer, and sensible, way to go. But whether any government would be – to borrow Ms Briggs’ word – courageous enough to drive that is another question.