Short-term contract aged care staff ‘farce’

The residential aged care sector has greatly increased its use of short-term contract workers in a bid to fulfil Anthony Albanese’s stringent staffing reforms.

Anthony Albanese.

The residential aged care sector has greatly increased its use of short-term contract workers in a bid to fulfil Anthony Albanese’s stringent staffing reforms, rapidly escalating the cost burden on aged care providers and threatening their viability.

Providers’ reliance on expensive agency workers has quadrupled, with externally contracted staff employed by a third party now delivering 7.5 per cent of total direct care hours worked, compared with just 1.8 per cent in 2019.

The aged care industry is warning Labor’s push to get more nurses into residential homes is a “farce” and has become a “multimillion-dollar burden” for large providers which is focused on box ticking rather than improving the livelihoods of elderly residents.

The new figures emerged as workplace relations expert ­Andrew Stewart warned providers could be disadvantaged under the proposed industrial relations reforms as they would have less flexibility in managing their workforce.

Under the bill expected to come before parliament next February, Mr Stewart said some of the temporary workforce would have to be hired permanently, leading to increased insurance costs and superannuation payments.

Despite the Prime Minister’s promise before the May 2022 election to fix the aged care sector, The Australian can reveal a University of Technology Sydney report found Labor’s nursing targets were worsening the sector’s financial viability, with ­providers forced to pay up to 34 per cent more to recruit nurses.

The research conducted by UTS Ageing Research Collaborative before Labor’s staffing requirements were brought in in July also found only 45 per cent of homes were meeting the rule, well below the government’s figures of 86 per cent. Only a fifth of residential aged care facilities were meeting the direct care minutes target at the end of last financial year, just three months before the laws’ came into effect in October.

The report noted differences between the Department of Health and Aged Care and UTS figures might be because the university based its figure on quarterly data while the government’s were based on monthly reports.

The sector is scrambling to implement a suite of reforms including mandated minutes of care per resident, quality and safety standards, and full-time nursing requirements as it adjusts to a new funding model brought in last year as recommended by the aged care royal commission.

The overhaul comes as financial troubles plague the sector, with the latest figures from the Quarterly Financial Snapshot of the Aged Care Sector revealing 66 per cent of private providers were operating at losses.

On average, the financial position of homes had deteriorated, with homes losing $19.56 per resident per day at the end of last financial year compared with earning $2.51 per resident per day in 2019.

Residential facilities’ expenses increased higher than forecast, with the report noting administration costs surged by 14 per cent as providers raced to comply with the government’s new rules.

The new figures have prompted providers to criticise the government’s push to get more nurses into aged care homes as “a farce”. Aged Care Industry Association chief executive Peter Hoppo warned Labor was “fixated on counting minutes rather than reporting on outcomes”.

“It is extremely disappointing that, despite so much thought and effort going into improving aged care, we now have organisations fixated on counting minutes rather than reporting on outcomes,” Mr Hoppo said.

“We know that thousands more registered nurses are needed for providers to be able to meet their mandatory targets, and that number is only going to grow, which makes the whole situation a farce.”

Aged care provider Whiddon’s chief executive, Chris Mamarelis, warned the sector was now largely dependent on labour hire arrangements to meet 24/7 nursing targets and mandated care minutes, as he questioned why providers had to pursue a legislated target rather than improved care outcomes for residents.

Mr Mamarelis said Whiddon, which runs 19 homes mostly across NSW, paid 50 per cent more for agency staff but could pay up to 80 per cent in regional centres.

“Continued use of agency staff places more pressure on already-stretched resources, requiring ongoing on-boarding and training,” Mr Mamarelis said.

“For large providers, this is a multi million-dollar burden, remembering that we are essentially 100 per cent funded by the federal government.”

A spokeswoman for Aged Care Minister Anika Wells said the government’s figures showed 88 per cent of facilities had a registered nurse on site at all times and that the UTS report was based only on a sample of providers rather than data from 97 per cent of aged care facilities. The government said it was committed to reducing the sector’s reliance on agency staff and believed its $11.3bn wage rise for aged care workers would help.

A government taskforce, chaired by Ms Wells, is scrutinising ways to make the sector more sustainable and has flagged support for making wealthier Australians pay more for their care. The UTS report welcomed the taskforce but warned “the transparency of its processes fell short of best practice”.

Opposition health and aged care spokeswoman Anne Ruston called on the government to release a comprehensive care workforce strategy to address significant staffing challenges and help providers comply with tough regulations.

“Whilst this Labor government is on Christmas holidays, more and more aged care homes are going into the red despite providers desperately working around the clock to try and comply with expedited regulations that are forcing them into further financial difficulties,” Senator Ruston said. “This government promised to change the aged care sector, but over the past year we have seen 40 aged care homes forced to close, more than $2bn wiped from the aged care budget, home-care reforms pushed out to 2027 and a workforce shortage of 5122 registered nurses.”

Aged care expert Paul Sadler backed the figures produced by the University of Technology Sydney rather than the government’s targets. “We’ve seen a massive increase in agency workers in residential aged care and home care which has really been throughout the period of Covid then its continued to go up with the new staffing requirements,” Mr Sadler said.