Aged care feels squeeze from costs, wait lists

The $18 billion aged-care system is under significant stress and increasingly corporatised.

Median wait times between approval and actually being able to use a home-care package have doubled.

The $18 billion aged-care system is under significant stress and increasingly corporatised, with previously unpublished government data revealing spending on nursing homes per capita has fallen for the first time in half a decade and wait times have more than doubled in a single year.

Just weeks before major ­witness hearings in the aged-care quality and safety royal commission begin in Adelaide, analysis from the Productivity Com­mission has been released today showing total taxpayer funding for bricks and mortar nursing home care rose just $224 million in the last financial year.

In last year’s budget, the ­Coalition stopped separately ­reporting funding for residential aged care and home care — which allocates money to older Australians so they can get support to stay at home longer — for the first time, obscuring the split between the two major strands of the aged-care portfolio.

The royal commission began its preliminary hearing on Friday but the first witnesses will be called for two weeks of hearings from February 11.

Senior counsel assisting, Peter Gray QC, said those hearings were expected to include evidence from consumer advocacy bodies, healthcare provider peak bodies, national aged-care provider peak bodies and regulators.

 

Commissioner Lynelle Briggs told the hearing there had been a “rising torrent of concern that the aged-care system is faltering in certain areas of safety and quality and that it may not be fit for ­purpose”.

The PC Report on Government Services includes analysis using unpublished data from the Department of Health and other government agencies that sheds more light on an industry beset by rising care costs, falling staff qualifications and uncertainty over policy direction.

While funding has increased for home care from $4.5 billion in 2016-17 to just over $5bn last ­financial year, this has led to the lowest occupancy rates in residential aged care in a decade at just 90 per cent, a situation that will further spook investors as nursing homes take a long time and a lot of money to build.

The share price for two of the largest listed aged-care companies, Regis Healthcare and Estia Health, has fallen 10c from $2.80 and $2.26 between the opening of the royal commission and last night. The third listed aged-care company, Japara, fell 3c but its share price is the worst performing at $1.16.

Median wait times between approval and actually being able to use a home-care package have doubled to about three months in the year to 2017-18 because ­demand is growing faster than funding.

Delays are longer between ­approval and placement for nursing homes, too, with the total number of hours patients spent waiting in hospital for a place to become available after being ­approved blowing out to 353,700 hours, the highest number in a decade.

While vacancy rates in residential homes are high on average, people who go into care tend to do so in their local areas where places can be limited at particular facilities.

There are 234,000 people aged 65 and over (or 50 and over for indigenous Australians) in residential aged care. Private, for-profit providers now own and operate almost 41 per cent of all these ­places, continuing an upward trend since 2009 when private ­operators controlled 34 per cent of ­places.

The jump between 2016-17 and the past financial year is the highest on record, with the proportion of places controlled by for-profit companies growing by 1.6 percentage points.

One of the key instructions for the royal commissioners, when they issue the final report on April 30 next year, is to recommend a blueprint for a new aged-care system that specifically addresses funding — from both government and consumers — and the delivery of services.

In the 2016 budget, then ­treasurer Scott Morrison announced a $1.2bn saving via a crackdown on the Aged Care Funding Instrument, the tool by which the federal government pays the vast majority of basic care subsidies to nursing home operators.