Operating charges the prime cause of aged-care concern

Aged-care operators are routinely accused of classifying residents to gain the most government funding.

Former Australian Competition & Consumer Commission chair Allan Fels. Picture: AAP.

Aged-care operators are routinely accused of classifying residents to gain the most government funding, while also maximising direct fees and charges, even if the quality of residential or medical services is lacking.

Three out of four complaints to the Aged Care Complaints Commissioner about for-profit residential care providers relate to fees and charges. These include bundled care packages, where a resident may not benefit from all the services they are charged for.

Concerns have also been expressed about poor conditions, often due to inadequate staffing. Several state governments have raised concerns of residents being taken to public hospitals with conditions that could have been prevented or treated elsewhere.

Health economist Michael Woods yesterday said a royal commission would need to balance the desire to impose tougher regulation with the need to give consumers greater influence over market behaviour. Professor Woods, who led a 2011 Productivity Commission inquiry into aged care, said there remained a need to clearly define quality. Where financial considerations might currently dictate quality, he hoped an independent regulator could, in future, enforce standards and require much greater transparency.

He said government funding should be attached to the individual, and made as portable as possible, so consumers had the power to bring about change.

“At the moment too many people have to make decisions about aged care based on who has a bed licence and a vacancy,” he said.

“These people are vulnerable and to the extent that you can empower them, or empower their carers and/or their relatives, you can change that perspective. We will hopefully have a situation in future where people tell their provider ‘This is unacceptable, I don’t have to stay here’ and competition ensures there are other providers to meet their needs.”

Share prices of listed aged-care companies plummeted after the royal commission was announced. Former Australian Competition & Consumer Commission chairman Allan Fels, who last year called for an inquiry, said a royal commission could address the “huge consumer protection issues” in the sector.

“I hope the tone is not all negative but identifies the many good things in the sector and uses them to spread best practice,” Professor Fels said.