Living Longer Living Better 26 July 2012 Sales, Customer Service and Marketing Team Workshop

Strategic Initiatives Manager - Luke Oborn Business Strategy Analysis - Business Development, Grants and Tender Applications, Business Environment Analysis – Arlene Pilkington Market Business Analysis - Market Research, SAM Reviews and Client Satisfaction Surveys – Dianna Watson and Dianne Lawson

Living Longer Living Better Federal Government’s Aged Care Reform Package. Government Response to Productivity Commission Enquiry into Aged Care System – Caring for Older Australians

Historical Context Pre Laissez-faire apart from home nursing subsidies. From 1972 – Controls on bed numbers (planning ratio). Mid 1980s – Labor’s Aged Care Reform Strategy - Major restructuring; controls over spending on RAC – Government funding of HACC program Population ageing identified as major source of pressure on expenditures likely to burden future generations – Review of pricing arrangements in RAC Hogan Report 2004 – Review of industry funding. NHHRC 2009 – Freeing up supply restrictions; give consumers greater choice. Henry Tax Review 2010 Senate Standing Committee Prod Comm “Contribution of the NFP sector” – and Treasury scoping study for a national NFP regulator.

Aged Care – Current Weaknesses System complex, difficult to navigate Quantity limits Discontinuous care, not tailored to need Constrained pricing – unsustainable Financial inequities Age pension and care tests Workforce shortages, low wages, regulatory burdens Complaints handling Poor interface with health system

Future Challenges and Issues Increased life expectancy Increased expectations Fiscal impact, insufficient co-contributions More affluent older Australians Declining relative availability of carers Workforce needs to expand

Key Figures Population over 70 to rise from 2m in 2010 to 6.2m 2050 People receiving care to rise from 1m to 3.6m by 2050 (3m to receive community care) Residential care to grow from 170,000 permanent places to 600,000 places by 2050 Dementia!

Prod Comm – Major Recommendations Recommendation Individuals to pay for accommodation costs and living expenses Government to continue to fund c.85% of care costs, most consumers to contribute c.15% of care costs. Care costs - Individuals to pay up to a max of $25k pa; $60k in a lifetime  Age care to become an entitlement instead of being rationed

Prod Comm – Major Recommendations Recommendation pseudo Selling family home to fund aged care to become optional  New means of funding aged care including: a.Option for pensioners who sell their home to put proceeds into and Age Pensioners Savings Account Scheme that won’t effect pension entitlement b.Government – run Aged care Home Credit Scheme to allow people to draw down on equity in home to pay for age care  Value of family home to be a factor in determining a person’s capacity to pay for care

Prod Comm – Major Recommendations Recommendation  Restrictions to be lifted on the number of aged care beds and home and community packages Aged care packages to no longer be standardised but built to suit the individual  New pricing to reflect the need to pay workers competitive wages Australian Seniors Gateway Agency to access aged care needs and capacity to pay

Living Longer Living Better Overall System Reform System Financing Residential Care Home Care Consumer Gateway Workforce Supervision

Living Longer Living Better Health System Connections Diverse Backgrounds / Special Needs Dementia Carers

Living Longer Living Better Overall System Reform Establishment of Aged Care Reform Implementation Council. Review of aged care demand across ACAR and HACC planning regions. ► Establishment of Aged Care Financing Authority (ACFA, with $26.4m budget) to supervise pricing. Industry is to source additional funding through private sources of finance. ► Establishment of the Aged Care Gateway - My Aged Care website and call centre. Increased supervision of the industry.

Living Longer Living Better System Financing ► Establishment of ACFA. Providers required to comply with caps set by ACFA on bonds and accommodation charges Redirection of funding Industry is to source additional funding for the provision of aged care through private sources of finance via increased means testing of aged care entitlements Capital grants schemes to be consolidated and more dependent on building in government identified priority areas.

Living Longer Living Better Residential Care Review of ACFI Decreasing rate of growth in places relative to Home Care (HC). New income and assets test on accommodation costs and care costs from 1 July 2014 Removal of high/low care distinction in All providers allowed to offer optional extra services. Dedicated extra services areas to be permitted. Cooling off period for choice in payment method for accommodation (bond or periodic).

Living Longer Living Better Home Care (HC) Large expansion of HC provision. ACAR round 2012/13 to introduce two new levels of care to form continuum of care across four levels (levels A to D). Existing CACPs become Level B, EACH becomes level D. EACH D to be replaced by an additional 10% subsidy level for any care recipient diagnosed with Dementia. ► July 2012 – Government assumes policy, funding and operational responsibility for HACC aged care program (except in Vic and WA). ► Review of HACC funded Home Support (HS) services. ACFA to provide information on the fees and charges that may be levied in HC packages.

Living Longer Living Better Home Care Income tested care fee to apply from 1 July 2014 – (new entrants only) on basis of 17.5% of single basic pension plus income tested component applied differently to full pensioners, part pensioners and self funded retirees. ► Care fees capped at $25k pa and $60k lifetime (indexed). Total government subsidisation of in HC packages will reduce from 84% to 76%. CDC embedded into mainstream from July Extra services extended to HC.

Living Longer Living Better Consumer (Gateway) ► Establishment of My Aged Care Website. Will publish extensive comparative data on service providers including the maximum accommodation payments approved per provider. Standardised assessments for basic HS.

Living Longer Living Better Workforce Workforce compact to lead workforce reforms. Aged Care Workforce Fund - $377m funding over 5yrs for skills. Conditional adjustment payment equal to 1% of basic subsidy (RAC initially) increasing scale of payments to $1.2b over 5yrs for Aged Care Workforce Productivity Strategy. Will include training, higher wages, working conditions and regional and remote complexities in workforce planning. ► Aged care focus in curricula. $1.9m to expand palliative care training in RAC and HC

Living Longer Living Better Supervision Formation of new single quality agency – The Australian Aged Care Quality Agency – accreditation and standards. Aged Care Commissioner – extension of powers - independent complaints resolution.

Living Longer Living Better Health System Connections Enable sub acute care services in aged care (esp palliative care) and bill appropriately for same (presume as similar to private hospital services). $19.8m for specialist palliative and advanced care planning advisory services to build links between aged care and palliative care services. Support for providers to enter partnerships with public and private health care providers and health insurers for the delivery of health management services. Introduction of evidence based practice and translational research initiatives. ► Access to medical practitioners and other health professionals through videoconferencing. Analysis of effectiveness of primary health care services in relation to aged care.

Living Longer Living Better Diverse Backgrounds / Special Needs Acknowledge mental health issues in veterans. $7.3m expansion of ACHA Carers $11m to establish a network of carer support centres around Australia - opportunity for co- location with IRT facilities

Living Longer Living Better Dementia Additional funding for behavioural needs in both RAC and HC. Existing EACHD clients transition to Level D Packages 30 June 2013 with 10% behavioural support provision. Subsidy amounts of the different packages undetermined at this stage. Re structure of the Dementia Initiative. Dementia supplement (10%) for HC service recipients. Improvement of hospital services for people living with dementia.

Living Longer Living Better However Changes will occur gradually Reform package largely leaves policy challenge to future governments Concerns with the operations of the proposed new ACFA Proposed changes further embed current system rather than “free-up” the market Nil impact on Lifestyle Communities

IRT’s Involvement Hosted Commission and community event Overarching submission looking at whole of system Two further detailed submissions – risk and removal of ACAT Media coverage Meeting with Commissioner seeking more in depth information Formal submission in response to draft document

Strategic Initiatives See SI Intranet page for full summary and implementation log. Sites and Departments Strategic Development Strategic Initiatives