Cruel reality hits home

There is a reckoning due in this nation. Our aged-care system is broken, eroded by failures and aided by a collective delusion.

Australian Prime Minister Scott Morrison speaks to a resident during a visit to a Goodwin Retirement Village in Canberra, on September 12, 2018. Picture: AAP

There is a reckoning due in this nation. Our aged-care system is broken. It has been eroded by moral and political failures, aided by a collective delusion that the network of care could withstand the forces of demographic change without substantial intervention.

Right now, more than 3.8 million Australians are older than 65. That’s 15 per cent of the country. In less than a decade that figure breaks through five million, or 18 per cent of the entire population. In less than 20 years, we are talking about 6.5 million people over 65, a fifth of the population.

This is the story of most Western nations, but these are the raw numbers. What living longer does to the tail end of those figures is just as important. Forty-three per cent of those older than 65 are aged 75 and over. In three decades this proportion rises to 55 per cent. The group aged 85 and older balloons from 13 per cent of all over-65s to 20 per cent. The absolute numbers are in the many millions.

The indicators elsewhere are dire.

A week ago, Scott Morrison announced a royal commission into the sector would be established before the end of the year with hearings due to extend into at least the second half of next year, almost certainly after the next federal election.

“We should brace ourselves for some pretty bruising ­information about the way our loved ones have experienced mistreatment,” the Prime Minister said last Sunday.

“That is going to be tough for us all to deal with, but you can’t walk past it, you can’t not look at it, and that is what the government is ensuring that we don’t do.”

The question on the lips of many is: why now?

It is true that an investigation was due to air on national television the day after the announcement. But it is also true Morrison had just ascended to the top office and recognised the electoral damage done by years of ignoring older (and, he believes, mostly Coalition voting) Australians.

Morrison had been reminded at length by his own MPs that they were being swamped by constituents who have tried to navigate the Byzantine aged-care system. They feel betrayed because the support is stretched. Loved ones are suffering. Not just with the headline-grabbing horror stories (remember kerosene baths?) but by the baseline neglect and indignity of a system manifestly incapable of truly, really caring for its charges.

Part of the problem is that there really is no substitute for the love and diligence of family. In modern times, as people have fewer children much later in life, the old bonds of blood can guarantee only so much care.

“Our love should not be conditional on a point in age or because we drift away from those who once gave of themselves to care for us,” Aged Care Minister Ken Wyatt said at the National Press Club in Canberra in October last year.

“I have heard that up to 40 per cent of people in residential aged care have no visitors 365 days of the year. There are two periods of our life in which we are vulnerable: in our dawning years from birth, and our twilight years, when we are frail.”

In his bestselling book Sapiens, Yuval Noah Harari makes a case for the dominance of our species. Humanity’s great trick, as it turns out, is co-operation. For millennia that meant a hand-in-hand approach to the practical things such as farming and rearing children. In more modern times, however, that co-operation has been refashioned, en masse, to our ability to collectively believe great fictions.

The financial system is a figment, as are brands and other myths of culture. These are all made flesh by a mutual willingness to ignore, for the great benefit of many, what is actually true of this world. Money has no intrinsic value except that we agree to believe it does and trade it for goods.

Despite a near-universal need to trust that an aged-care system will provide support and protection in old age, a royal commission into the sector will find that no such system exists and certainly won’t in the future — not without total and sweeping action. Deep down, Australians know this. Anyone who has been in or placed a loved one into a home knows this. It is an uneasy knowledge.

Why is this a fiction when there are more than 200,000 Australians in residential aged care and another 90,000 receiving support through home-care packages? It is a fiction because this is not enough. Not now and, at the rate of ageing the country is about to witness, not ever.

The waiting list for home-care packages alone is well more than 100,000. The actual figure is much higher except the federal government is more than two months late in publishing the latest quarterly update.

We know a royal commission into these systems will find dramatic shortfalls and policy settings that require urgent reform because this is what successive governments have been told. Since 2016, for example, six independent reviews of the system have been commissioned by the government, three parliamentary inquiries are under way and 17 consultations and department-­initiated pieces of work have been started with five yet to be completed.

The largest of these, a review of aged-care legislation by former Finance Department secretary David Tune, was tabled by Wyatt more than a year ago. The government started work on 18 of its recommendations — most notably in this year’s budget — but more than half have gone unanswered.

These are no small recommendations, either.

The Tune review recommended the government introduce a fifth and even higher level of home-care package — at the average rate of subsidy a residential care place might attract — to allow people to live at home even longer. This has gone unanswered.

It also said recipients of all home-care packages should pay a contribution proportionate to the size of the support instead of a flat rate for everyone. Providers should be allowed to charge higher daily fees for residential care — with daily fees $100 or more to be approved by the pricing commissioner — and income and means-tested annual and lifetime caps should be abolished.

Then there is the big one, which is anathema to most politicians: the Tune review says the full value of the owner’s home should be included in the means test for residential aged care.

Morrison gave a guarantee that the reform work already under way will not be delayed by a royal commission but these recommendations are not among them.

The reckoning, therefore, is this: taxpayers and consumers are going to be asked to pay a lot more for aged care in the future. It is pure arithmetic.

Council on the Ageing chief executive Ian Yates says there are “six or eight” different means tests for different home support programs in different states.

“Consumers pay now, but are they paying enough? They are clearly not paying equitably now because it is a mess,” he says.

“Expectations have changed from the old days when we effectively warehoused people. They are higher and so are the costs.”

This matters because while providers were given more scope to claw back some of their costs from residents, the funding tap from government has slowed to a drip. Subsidies through the Aged Care Funding Instrument have been frozen since 2016. It is this tool that directly pays for — via the taxpayer — the nursing and personal care costs of residents in homes.

The growth of funding in care costs and money provided through the ACFI have kept track since 2007 but, for the first time last year, the cumulative increase in costs worn by providers was 10 percentage points higher than the subsidy. Simply put, that means providers found the money elsewhere or they cut staff.

They cut staff.

Those nurses and personal care workers who were not jettisoned are hard to keep, anyhow. A workforce strategy review commissioned by Wyatt and released earlier this month reported that 15 per cent to 25 per cent of staff vacancies are because of absenteeism or workforce turnover. This is an astonishingly high figure and, according to the reviewer, John Pollaers, a critical point.

“This amounts to understaffing, meaning that current organisations’ workforce mixes are stretched and are probably not being used effectively and there are productivity gains to be made by improving attraction and retention across the industry,” the report says.

If that sounds familiar, it is. It could have come from any of a number of reports dating back almost two decades, such as this one from the Myer Foundation in 2002: “The lack of parity of wage rates of workers in aged care compared with workers in other similar industries, such as acute health, needs to be addressed as it presents a more immediate impediment to the recruitment of suitably skilled staff.”

The government’s latest review finds nurses and personal care workers are underpaid by 15 per cent and that this is absolutely critical to ensuring standards of care in homes.

In its final years when last in government the ALP legislated a $1.2 billion workforce supplement — paid for by raiding the ACFI to the tune of $1.6bn — which was designed to be spent on worker pay rises.

There was a catch, however. The compact required employers to engage their employees under enterprise agreements. When Tony Abbott became prime minister the supplement was declared “unionism by stealth” and it was axed, with the money going back into the general aged-care pool.

Perhaps this record of information through the years is what stoked Bill Shorten’s reticence just days before the royal commission announcement. On September 14, Shorten told some people at an aged-care round table that “royal commissions seem to be the public policy response of the day”.

According to two people in the room, Shorten didn’t reject the idea of the highest form of inquiry but used the trade union royal commission as his proof they might end up telling people what they already knew.

In a speech, he also made some big calls that seemed to pre-empt any findings. “I don’t expect the private sector providers to change their business models,” he said.

Few things in life are certain, but if a royal commission does its job and reflects the real pain of Australians and the litany of policy interventions suggested but already put on ice, the entire business model of aged care may have to change.

The warnings are now so old they could legally drink. The royal commission will elevate those stories to the national stage.

As one shrewd industry observer says: “It would be a brave government that ignores its recommendations.”

But which government will inherit them?