New funding regime creates a two-class funding system in aged care
Date:
Fri, 22/06/2012
Spokesperson:
Leading Age Services Australia The Gillard Government’s decision to slash aged care funding from July 1 will seriously threaten the level of care available to frail elderly Australians in residential facilities, economic modelling by providers has shown.
Announcing the results of the modelling today, Leading Age Services Australia CEO Gerard Mansour said the industry would lose more than $500 million over the next financial year – a cut of between five and 10 per cent for every provider.
Mr Mansour warned the funding changes – announced by the government last month – would create a two-tier system and leave many residents worse off.
“What this means is that after 1 July a new resident will be entitled to less care for exactly the same care needs, a concept the industry rejects but will be forced to implement,” he said.
“Two residents in the same facility, with the same care needs, may be entitled to significantly different support as a result of this new funding model.
"How can we tell the sons and daughters of the frail aged that their mum or dad will get less care support than someone of the same care needs admitted prior to 1 July 2012?
"LASA strongly opposes the need for any such reductions to the residential care funding tool which until now had made positive steps forward in better matching care needs of frail older Australians with appropriate levels of funding.
“While the government describes its cuts as ‘shaving’ or ‘limiting’ subsidies, the reality is a major reduction in funding needed to provide care for the most frail and vulnerable members of our society.
"This unilateral decision by the Government will force every aged care provider to review whether the current level of care services can be maintained for all new residents.”
Mr Mansour said LASA had urged the government to delay the funding changes by a month, so providers could adjust to the new system and the government could explain the reasons for the discrepancy between the promises of its recent aged care package and the reality for providers. However these appeals have been ignored.
He said it was widely acknowledged that many residential aged care providers were already struggling to survive under existing funding arrangements.
"Our view is that funding reductions of this magnitude will leave some aged care providers in a perilous position.
"It will also force aged care providers in coming months to consider severe measures, in order to retain an appropriate level of business viability.
"The industry cannot come to terms with how the high-profile budget announcement of a $50 million 'redirection' for next financial year has resulted in reduced funding of over $500 million in the 2012/13 funding allocation for residential aged care homes
"We call on the Gillard Government to reverse the decision immediately, and allocate a further $500 million in aged care funding so that aged care providers can avoid the need for implementing severe changes.
"Unless this matter is addressed urgently, frail older Australians will receive less care, staff hours will be cut, and aged care providers will be forced to review their financial viability.
"Cuts of this magnitude are not acceptable to the industry and are certainly not in the interest of frail older Australians.”
CASE STUDY
A resident returning from hospital and being re-assessed under the new scheme will lose $50.00 per day in subsidy income, or $18,250.00 per annum. The provider of this aged care home will need to sack a care worker to pay for this single loss on subsidy.
