Healthcare reform and action for ageing population

This was a chapter in Transforming the Nation’s Healthcare published during the proposed health reform era of former prime minister Kevin Rudd

Healthcare reform and action for ageing population

By Deborah Singerman

Ageing is a fact of life. What matters for society is coping with the numbers, the costs and funding, the interrelationships, accommodation – the level of caring that is offered with available resources, and the level and type of caring to target.

Big or little; migration, planning, or fertility-led, and in an as-yet undefined sustainable way, our population is going to keep trending grey. The 2010 Intergenerational Report noted the Treasury projection that over the next 40 years the number of Australians aged 85 and over will grow from around 400,000 in 2010 to 1.8 million by 2050 (or from 1.8 per cent to 5.1 per cent of total population).

Workforce comparisons showed that the ratio of workers to those aged over 65 would fall from 5 per cent to 2.7 per cent; spending on health as a percentage of gross domestic product would increase from 4 per cent to 7.1 per cent; spending on pensions grow from 2.7 per cent to 3.9 per cent; and spending on aged care from 0.8 per cent to 1.8 per cent.

And this when Organisation for Economic Co-operation and Development (OECD) health data showed that Australia’s health spending for 2006-07, at 8.7 per cent of gross domestic product, was less than both the OECD median (9 per cent) and weighted average (11.2 per cent).

Treasurer Wayne Swan had already canvassed the idea of a productivity increase – 2 per cent a year was the calculation as the Intergenerational Report was announced – to add to the tax base from workers generally. But for aged care there was also the urgency of governance that “for too long has been fragmented, with divided responsibilities between Commonwealth, state and territory governments,” as Minister for Ageing Justine Elliot acknowledges.

“This has led to blame shifting, cost shifting, overlap and duplication. It has also made it difficult for older Australians and their carers to find the services that best suit their needs.”

The National Health and Hospitals Reform Commission (NHHRC)’s July 2009 report, A Healthier Future for all Australians, also noted a conundrum potentially putting more financial and emotional pressure on the provision of care: “more people will be frail and will look for assistance from informal carers, yet they will be busier than ever earning a living to meet rising costs of living and their own retirement needs.”

The Federal Government’s main, overall response to date has been to accept Recommendation 88.6 of a Healthier Future: “The Commonwealth Government would assume full responsibility for public funding of aged care. This would include the Home and Community Care (HACC) Program for older people and aged care assessment.”

Speaking at the Aged Care Association Australia NSW Congress in May 2010, Elliot said this was a “necessary first step (and it) will enable a national aged care system to be built, a system that will provide better care and result in the bigger integration of aged care with other parts of the health and hospitals network.”

Adding another layer to this admittedly national issue, “the population is ageing at different rates across Australia’s states, territories and local government,” says Natalie Jackson of research she completed as associate professor at the University of Tasmania (she is now professor and director of the Population Studies Centre at the University of Waikato in Hamilton New Zealand). In 2007, 15.2 per cent of South Australia’s population was aged 65 and over, 14.8 per cent of Tasmania’s, with others around 12 and 13 per cent except for the relatively young Northern Territory at 4.9 per cent.

Jackson found that South Australia’s population is ageing due to a low birth rate whereas Tasmania is suffering because loss of working age population outweighs interstate arrivals.  These differences will affect the type of resources required and ways to generate revenue. With people also likely to be working longer (partly out of choice and partly out of necessity to help continue to fund their retirement) and living longer, the needs of the aged were becoming paramount.

Earlier this year the Sun-Herald reported that 1 million Australians receive some form of aged care. There were 2,800 nursing homes in Australia, low and high care, and 133,314 people working in the field including 16,293 enrolled nurses. The May 2010 issues paper on Caring for Older Australians, from the latest Productivity Commission inquiry set up by the Government, states that not-for-profit homes (“religious, charitable and community-based”) make up almost 60 per cent of homes, with commercially run homes accounting for 34 per cent and “government-operated facilities,” the 6 per cent balance.

Community-based care is the other main sector, including caring in people’s own homes, respite care for informal carers, and support from HACC services. According to the issues paper, in 2008-09 nearly 600,000 older people (70 years and over) received HACC assistance and, as of June 2009, there were 3,300 HACC agencies giving anything from counselling support, assessment, nursing care and mobility aids to home maintenance and modification, and meals.

Yet, when aged care appears in the media it is usually with reports about abuse, poor feeding, neglect, or a system suffering from inadequate places, not enough staff and poor training. The Sun-Herald reported that there were 12,573 calls to aged care investigators in 2008-09 and 1,411 alleged assaults in nursing homes.

The Australian Nursing Federation (ANF) and Aged Care Crisis have lobbied “for mandated staff ratios” with the latter reportedly having been told of nursing homes where there is one person on duty for 80 residents.  As President of the Australian Council of Trade Unions and former ANF Federal Secretary Ged Kearney says, “To meet the productivity challenge we need to draw nurses into aged care by promoting training, closing the wages gap and introducing minimum staffing levels.”

Dr Diana Olsberg and Mark Winters’ October 2005 paper, Ageing in Place: intergenerational and intrafamilial housing transfers and shifts in later life, for the Australian Housing and Urban Research Institute at the University of New South Wales, also stressed the importance of “independent living, flexibility, consumer and lifestyle choices” for older Australians. While the global financial crisis may have bitten into superannuation savings and the notion of “spending the kids’ inheritance,” ensuring that people who wish to live in the family home for as long as possible can do so is an emerging factor.

The NHHRC’s report pinpointed “connecting and integrating health and aged care services for people over their lives … with primary health care (sic) as the cornerstone of our future health system.”  The recommendations had a section called “Increasing choice in aged care” and included:

  • government subsidies to be “more directly linked to people rather than places” transitioning from the current basis of places per 1,000 people aged 70 or over to “care recipients per 1,000 people aged 85 or over;”
  • “accommodation bonds or alternative approaches as options for payment for accommodation for people entering high care;”
  • “where possible, if people can afford to contribute to costs of their own care they should contribute the same for care in the community as they would for residential care;”
  • community care to allow people “to determine how resources allocated for their care and support are used;”
  • improving information about services available; and
  • supporting people and their carers to have their own eHealth record.

Other recommendations for “Caring for people at the end of life” included the funding and national implementation of advanced care planning, commencing with residential aged care and then extended to other groups, with recognition of individual decision-making, and an ongoing emphasis on primary healthcare centres and services, and “collaboration and networking with specialist palliative care service providers.”

Bringing community and residential care packages together to cater for different care needs could see HACC incorporated “into a carefully structured assessment system that includes rules of access to community care packages and low and high care support,” says Andrew Podger, immediate former national president of the Institute of Public Administration Australia.

“The ageing-in-place approach has helped to loosen the ties between care and accommodation, opening up more choice for the elderly, and any refined structure should retain and hopefully build on this. Such flexibility is limited now by the degree to which the costs of higher levels of care are controlled by limits on accommodation places. A shift to controls via the assessment process coupled with more consistent user charges to constrain demand would be preferable.”

An anticipated “seamless transition of care for clients, allowing people to easily move from one level of care to another as their care needs change” as well as “a nationally consistent system of services, support, assessment and regulation” are two reasons why Minister Elliot favours having one level of government responsible for aged care services.

The Federal Government’s response to the NHHRC report is A National Health and Hospitals Network for Australia’s Future – Developing better health and better hospitals. Funding measures over four years to 2014 in the Network and within the 2010-11 Federal Budget, Elliot says, include a Government commitment of more than $900 million on aged care and workforce provisions to:

“improve access to aged care information and assessment through the establishment of one-stop shops to help older Australians find suitable service; support development of the aged care workforce; introduce greater choice for older Australians receiving care through Consumer Directed Care packages; increase financial incentives for GPs to provide services to aged care facilities; and provide greater protections for older Australians receiving care.”


Some specifics are for the Government to:

  • invest $532.9 million in additional aged care funding with $280 million directed to states to support older Australians eligible for aged care in public hospitals;
  • provide more zero real interest loans to support the development of 2,500 additional aged care places ($300 million in loans at a cost of $145 million in the 2010-11 and 2011-12 Aged Care Approvals Round);
  • provide capital funding for 286 sub-acute beds or bed equivalents in multipurpose services ($122 million) and expand the number of rural communities to apply for this funding, creating an additional 300 aged care places in rural and remote areas;
  • work with the states to release more land and accelerate planning approvals so aged care homes become operational more quickly;
  • provide states with funding to help long stay older patients in hospital get out of hospital and into care;
  • allocate $10.1 million to improve viability of community care providers;
  • toughen prudential requirements to protect residents’ savings and commit $21.8 million over four years to further assure aged care residents and their families that their accommodation bonds will be used to improve aged care infrastructure, and are secure;
  • invest in more aged care training places, scholarships and models of practice; and
  • allow providers to benchmark their services against other providers to adjust payments and costs.

While the healthcare sector generally views the Federal Government’s commitment to fund aged care positively, the time frame is less so.  Funding cranks up from 2010 to 2014 and reaction to the Budget from Aged and Community Services Australia Chief Executive Officer Greg Mundy was mixed.  “We are again deeply disappointed the Government has failed to address the very immediate funding issues confronting aged carer services providers and therefore older Australians.

“Measures to improve transition care, staff training and new aged care beds/places are welcome but the Productivity Commission into aged care is 12 months away and implementation of any reforms even more distant and we have to ask what will happen to aged care services in the interim. Providing enough care for people in their own homes to help prevent unnecessary hospitalisation needs to happen now.”

Aged Care Association Australia Chief Executive Officer Rod Young has also called on the Government to increase the 1.7 per cent subsidy increase offered after minimum wage and cost of living increases, by another 1.75 per cent, to stand any chance of meeting any pay increases for low paid workers.  Mundy wants to see more competitive wages for valued staff. “The hours of community care an older person receives will continue to fall without more funding,” Mundy says.

Rhod Ellis-Jones is principal consultant at Australian health and ageing marketers, Ellis Jones. “Currently, too many older Australians spend too much time in hospital,” he says. “Too many older Australians are also unnecessarily admitted to hospital when better care in the community and in aged care homes would have kept them out of hospital: it is estimated that 31 per cent of transfers from aged care homes to hospitals (about 27,000 admissions per year) could be avoided through better GP care in aged care homes. Problems that can be sorted by a GP or in home services, or referred to sub-acute care, should reduce inappropriate long-term use of hospitals for aged care patients. But not only primary care, health promotion and prevention need to be a factor in this, implemented through community organisations.”

These are the sorts of issues the Productivity Commission is to investigate for its draft report, due December 2010, and then final report 12 months from the start of the inquiry.  They are not unknown in the sector:

  • social, cultural and institutional aspects of aged care;
  • funding and regulatory reform across residential and community aged care;
  • special needs groups – rural, remote, linguistically and cultural diverse;
  • future workplace requirements;
  • transition path to a new system ensuring continuity of care and allowing the sector time to adjust;
  • alignment of retirement living options with the rest of the aged care sector; and
  • fiscal implications of change in aged care roles and responsibilities.

The Productivity Commission also noted that the demand for services is expected to get more diverse, for instance with:

  • a changing pattern of disease with more suffering from chronic diseases and dementia;
  • greater affluence among older Australians and desire for variety of living arrangements; and
  • improvements in care technologies.

Of the state and territory ministers and departments of health Transforming the Nation’s Healthcare contacted, most planned to provide submissions to the Commission but felt it was still too early in the health reform process to comment in detail about how it will affect them.

All governments will continue to deliver the current HACC Triennial Plans until the end –June 30, 2011. “The Government will work with the states to develop new funding arrangements to come into effect on July 1, 2011,” Elliot says. “The Commonwealth will take over operational responsibilities for HACC from July 2012.”

The NHHN will provide incentive payments for GPs to provide services to older Australians in aged care homes.  These will increase from $1,000 to $1,500 a year for GPs who attend at least 60 older Australians in aged care homes. Incentive payments will double from $1,500 to $3,500 for GPs who provide at least 140 attendances. It is expected that by 2013-14 up to 1,200 additional GPs will be receiving incentive payments for providing services to older Australians in aged care homes.

Despite these promised incentives, Dr Andrew Pesce, national president of the Australian Medical Association (AMA), says the Government’s terms of reference for the Productivity Commission’s public inquiry into aged care are missing one vital component – medical care of the elderly in residential aged care.

“Elderly Australians should be entitled to get access to a medical practitioner when they move into residential aged care.  There is currently no specific requirement on aged care providers to ensure that residents have access to medical care on an ongoing basis.  This is despite the fact that too often the reports on sanctions on aged care providers are about the poor medical condition of residents.

“There is no regulatory backing to formally require aged care facilities to make medical care available for their residents.  The AMA believes this should be a requirement for aged care provider accreditation.

“The AMA has identified that more resources are needed to provide medical care, nursing care, IT (information technology) infrastructure and clinical treatment areas so that residents can receive the same level of care that their peers living in the community enjoy.”  At the time of writing, the AMA has arranged a consultation between AMA members and the Productivity Commission “to enable doctors to provide their views on how the provision of medical care to older Australians can be improved.”

Ellis-Jones says the terms of reference are a welcome step by the Government into meeting the current challenges in care for older Australians, but they should more holistically address the needs of the ageing population.  This includes looking into “investment into health promotion and prevention (particularly on issues like falls, loneliness and isolation) as part of reducing the cost associated with residential aged care, and into investment along the whole continuum of care, not just at the end stages when people are so disabled, often by preventable problems, that they have no other options.”

He also would have liked other options of care, including equipment that will enable more aged friendly homes, for example, personal alarm systems or installation of rails, which would also point to an aged care sector that is less dependent on residential aged care. “Obstacles that are in the way of seniors staying in their own homes are removed through the provision of services (e.g. health promotion strategies) and alternative living arrangements, such as transition housing.”

He also sees the need for a more effective procedural system that reduces the amount of paper work in the aged care system.  Here, the Academy of Technological Sciences and Engineering’s study into Smart Technology for Healthy Longevity suggests that IT will be able to help people wanting to stay in their own homes as they age. Sensors for detecting changes in movement, the monitoring of blood pressure at home and sending results electronically to doctors are all possible with the usual eHealth provisos of privacy and potential misuse of information.

Different funding methods and more flexible delivery of services need a balance to be struck so that cost recovery from those receiving care does not impede equitable access to appropriate care, Podger says.  “A clearer pattern of maximum (means-tested) charges for identified care levels is needed, with additional but reasonable charges for those choosing extra services (currently the system charges way over the top for additional services).

“Similarly, consistent with the choice being facilitated by ageing-in-place, the specialist accommodation side needs to involve bonds and charges for the majority commensurate with what they can afford and providing greater capacity to choose and pay for above-basic accommodation (e.g. two-room apartments in hostels and nursing homes for those wanting this).”

Ellis-Jones foresees increased competition among residential aged care providers. “It is likely the smaller providers will not be able to match the marketing muscle and high-end business and IT systems employed by the larger providers. Consolidation is to be expected, with subsequent growth among the large providers. The private companies that are vertically integrating retirement, independent living, residential aged care and insurance are more likely to thrive in a competitive environment. However, high care in which profit is extremely hard to achieve, will continue to be a focus of the larger not-for-profit groups.”

Another suggestion to make funding more flexible, less subject to government regulation and provide more incentives to build nursing homes was reported in the Australian Financial Review in July. It arose from a KPMG study commissioned by one of Western Australia’s largest nursing home owners, Bethanie

Group.  The Government would pay for aged care services in the community and in residential homes but, except for low income residents, clients would cover accommodation costs, with “wealthier residents contributing a large share” via a levy on taxable income. Bethanie Group intended to submit the idea to the Productivity Commission.

A key area that needs focusing on is definitely future workforce requirements, says Ellis- Jones. “Workforce shortages are most acute outside Australia’s major cities. The number of GPs per 100,000 head of population varies from under 60 in very remote Australia through to almost 200 GPs per 100,000 people in major cities. The majority of allied health practitioners also work in metropolitan locations.”

Part of NHHN will be the establishment of Teaching Nursing Homes to strengthen links between the aged care sector, research and training institutions and Local Hospital Networks. The Government will also offer support for up to 400 nursing graduates.

As at February 2010, the Government’s Employment Outlook for Health Care and Social Assistance listed this industry as the largest in Australia, employing 193,900 people (or 10.9 per cent of the total workforce) including in residential care services. It is characterised by part-time jobs, the largest number of new jobs for mature age (45 plus) workers and the largest number for women.

Karen Martin, a registered nurse with a background in psychiatric and aged care nursing, is program coordination manager at the Aged Care Channel, an interactive training and education satellite television channel launched in September 2003. It is for staff in residential and community-based aged care and has grown from 50 sites initially to now having over 1,200 members throughout metropolitan, rural regional and remote Australia. It also opened in England last year.

The channel’s motto is “engage, inform and improve your staff” and it promotes “person-centred care and … staff empowerment.”   The channel’s next move also recognises the potential impact of innovative educational tools to allow maximum learning flexibility for carers, many of whom are totally untrained.

“We are desperately trying to get ahead of the game and with new technology have our programs downloadable by early 2011. The person will be able to log on and see their own record and show it to future employers as evidence of training done.”

The increasing emphasis on home and community care highlights the need to have support services, especially if families are the main informal carers. “That’s a financial cost and an emotional cost,” Martin says. “Families need support especially if there is no skills base. Residential care is 24 hours a day but you can’t expect that of the family home. Who will be there to fill the gap? Where’s the workforce to come from?”

Robin Flynn, research and policy manager with the Community Services and Health Industries Skills Council – NSW, believes it is crucial to expand the range of skills and opportunities for trainees. For example, they could branch out into physiotherapy and other allied professional areas not just for their own educational endeavours but also for the benefit of more community and primary focused aged care, he says.

“We want to see people having more complex needs met in the community. We are going to need more expansive job roles, potentially with some of those therapy system or basic healthcare services becoming part of the home care workers’ role.  We need to be looking at job design and redesign to establish therapy functions as part of that role. We are creating broad scope and broader careers for people coming in at entry level. The recruitment message could be, ‘Yes, you might come in as an aged care worker but you could become a physio, a registered nurse, become part of a community based organisation’.”

Furthermore, you might also have to be aware of even greater diversity and special needs of potential residents. The Federal Government in June announced a $400,000 grant for the AIDS Council of NSW, ACON, and the Aged and Community Services Association of NSW and the ACT to work together to develop an educational and sensitivity program for providers to understand and help overcome the fear and potential discrimination faced by gay, lesbian, bisexual and transgender residents.

Home design will also have to change to take into account an ageing population. Livable Housing Design guidelines are the result of a national dialogue on universal housing design convened by Parliamentary Secretary for Disabilities, Bill Shorten, last year. The aim is to build homes that can be adapted to meet the changing needs of residents over their lifetime with simple design features such as a flat entry to house, wide corridors, and doorways, and reinforced bathroom walls.

The Government is to invest $1 million over four years to drive a partnership between the residential building and housing industry and disability and ageing sectors to promote liveable housing design. The Australian Institute of Architects published Beyond Beige: improving architecture for older people and people with disabilities in 2008 so there is a head start.

Increasingly we are going to realise that neither one size nor one funding or caring model will ever fit all. And even when a decision about aged care has been made, its scope may be larger than originally considered.

“Enabling a person to stay at home (for instance) requires more than meeting medical needs,” says Rhod Ellis-Jones. “I think it has to be an integrated process of education, design of housing, the assurance of safety and security, and the allocation of carers. But more than that, it is also the creation of age-friendly communities (transportation, amenities and community organisations) to ensure they will not be affected by social isolation.”