The Productivity Commission has released draft recommendations for an overhaul of aged care, and the sector should strongly support this “landmark blueprint”, rather than allowing debate to degenerate into partisan arguments.

So says Professor Hal Kendig, head of the Ageing Work and Health Research Unit, Faculty of Health Sciences, University of Sydney, who in the piece below analyses not only the recommendations, but also their political and policy context.

Hal Kendig writes:

Health and care reform held so much promise in Australia just a year ago but the lofty aspirations have hit uncertain times in the gridlock of federal relations and lack of clear political mandates.

Aged care had been lagging behind in the reform agenda, falling into a lower priority and a ‘too hard’ basket, as the COAG process focused on the ‘main game’ of health care and hospitals.

Yet pressure for aged care reform was at a boiling point as consumers faced difficulties in accessing services and sought more quality, flexibility, and control; providers sought more funding and less regulation; and governments cast an uneasy eye forward to projections of rapidly rising costs. Tensions and contradictions in the aged care ‘system’ were just too great to be addressed by more incremental budget measures or departmental reviews.

In this difficult policy climate the Productivity Commission was charged last May to carry out this long overdue Inquiry to devise options for a better aged care system.  The Commission’s draft report has just been released and it provides a landmark blueprint for moving ahead.

The opportunity to take new directions in aged care was enhanced by COAG agreements for the Commonwealth to assume full responsibility next year for community care for older people as well as its existing responsibilities for residential care and carer support (except for Victoria and Western Australia at this point).

The Commission is well placed for this work given the staff’s analytical capacities, the political and community skills of its Commissioners, and their knowledge of government along with independence from it.  The Inquiry’s recommendations are grounded firmly in 487 submissions including statements from older people themselves (all available on the website), more than 150 stakeholder meetings, and five workshops.

The Report and Its Main Recommendations

The Productivity Commission’s draft report Caring for Older Australians has charted important directions for advancing aged care.  It comprehensively reviews trends in care while focusing mainly on devising an integrated, equitable, and effective system of funding, care and support services, and regulation; it also canvasses workforce, research, and wider issues such as age friendly communities.

The report recognises the centrality of well-being, social equity, and financial sustainability.  The emphases are on increasing access to services, increasing choice and appropriateness of care, and new approaches to maintaining independence and restorative care.

A cornerstone of the report is its rigorous and detailed proposals for better ways to ‘unbundle’ payments for accommodation and care.  Older people would have primary responsibility for their own accommodation and living expenses, with means tests for subsidies based on wealth as well as income.

Payments for care services would be based on needs assessments and provide ‘entitlements’ that enable more choice across community and residential care.  Providers would benefit from progressively less restrictive regulation and they would eventually face healthy competition.  More private resources would be brought into aged care by individuals who could meet more of the cost themselves to buy more support.

The Commission’s careful economic analyses and detailed recommendations point a way ahead for ‘win-win’ situations that can widen access to and increase investment and innovation in a variety of forms of accommodation and care.

Care funding (currently fragmented into separate and inconsistent programs) would be consolidated into a ‘… single, integrated, and flexible system of care provision’ p 257).  Services including carer support would be provided as entitlements based on assessed needs.

A new and independent Aged Care Gateway agency, operating at a regional level, would be responsible for overcoming the fragmentation and ignorance that beset consumer and carers.  The new agency would be responsible for information, assessment, and care coordination, thus improving access to services as well as continuity and enhancing consumer choice.

A new Australian Aged Care Regulation Commission, again separate from the Commonwealth Department of Health and Ageing, would be responsible for compliance, pricing, information, and complaints as well as research and evaluation.

A wide range of other important initiatives are outlined, such as palliative and end-of-life care, and directions are considered for the important interfaces of aged care with disability services, health services, and housing.  Perhaps wisely the report does not detail articulation with the health sector for which there remains so much uncertainty.

Where Next?

The Commission’s Draft Report will be considered in public hearings and further submissions before the midyear release of the final report.  Consumers, providers, and advocates will need to carefully consider their views in the light of the broader public interest.  Spirited and necessary debate is already underway.

In my view, the aged care community should provide a strong and unified voice in support of the report’s recommendations.

We have a momentum for badly needed reforms and a new Minister on Ageing who can champion them.

It is important that the various interests in aged care support the common interest rather than degenerate into partisan views and emotive arguments.  The PC’s valuable recommendations are essential to set us on the path towards better and more sustainable care for older Australians now and in the future.


For previous Croakey posts on the Productivity Commission’s draft report:

• A sector long overdue for reform

• A brief summary of the recommendations