All eyes are on the upcoming Federal Budget to see what further announcements the government will make to transform the aged care sector. Prominent industry voices have called on government to act on the recommendations coming out of Aged Care Royal Commission, improve workforce planning and pay for workers, and launch a star rating system of providers to allow greater transparency for consumers over service delivery.

    The Aged Care Royal Commission has proposed a star rating system for the sector which should be considered by the federal government, Mike Baird, CEO of HammondCare, told directors at an AICD event held last week.

    “It's confronting for the provider to have (their) performance on display. But if you think of people going into the aged care system, how do they compare providers? We have to make that simple and easy…It’s new to us in the sector, but we really have to deliver that.”

    Speaking at the Aged Care Governance – State of Play event in Melbourne, the former NSW Premier said that having his own mother in aged care had really opened his awareness personally to issues in the sector, and that reading the report delivered by the Royal Commission earlier this year was “heartbreaking”.

    The funding model should be changed in a fundamental way to deliver an aged care system with adequate staff providing the level of care that is actually needed, as opposed to what can be extracted from the yearly budget process in Canberra, he said. “The Royal Commission report talks about the Medicare system and I think it's a really good analogy. When you turn up to the healthcare system, you get the care you need in some way, but when you turn to aged care, that's not necessarily the case.” There should also be an independent pricing authority established to identify and regulate the true cost of care in the sector, he added.

    In March, the federal government announced an extra $452.2 million in funding to address immediate priorities in the sector and strengthen financial assistance for residential care providers so they can provide better care, improve oversight of home care and improve governance in the sector.

    Medicare-style tax levy?

    However, a deeper response is expected when the Federal Budget is delivered on 11 May, according to Patricia Sparrow, CEO of Aged & Community Services Australia, who gave a keynote speech at the event.

    We need to wait and see what the government's reaction is [to the Royal Commission] in the Budget,” Sparrow said. She referred to a Grattan Institute report that says an extra $7 billion needs to be invested into aged care to ensure all older Australians get the care and support they need.

    The sector is waiting to see whether the government will take up a commission recommendation on a suggested Medicare-style tax levy or look at a better funding mix involving general revenue and user pays.

    The onus now is on leaders in the aged care system to ensure that the commission’s recommendations are taken forward. “It's such an important and fundamental social reform and if we can't leverage change off the back of the Royal Commission, then there's something really wrong.”

    This change may include a star rating system, revised standards, the capture of additional data, defined levels of care and a worker registration scheme.

    “One thing we now know is that transparency in terms of taxpayer dollars will be central to everything that happen,” she said. “So as governing bodies, and as providers, we're going to take the challenge on and look at reporting on and responding to a range of things that will increase the transparency, which is what community expects.”

    The commission also highlighted the key challenge of needing to triple the aged care workforce by 2050 and has made recommendations around planning for workforce training and paying workers better. “This is one of the things that I hope does change,” said Sparrow.

    The Aged Care Workforce Strategy Taskforce has estimated that by 2050, the aged care workforce will need to grow to around 980,000 workers.

    “It's a challenge for us - how we make sure that the changes are made. We are the leaders in the governance of the system, and it is up to us now to demand the change. The Royal Commission has made many recommendations that we can take forward.”

    Governance reforms

    As part of the government’s initial response came the announcement in March of $32 million worth of funding to enhance the capacity of the Aged Care Quality and Safety Commission, increase regulation around the use of restraints in care, and allow eligible providers access to programs to strengthen their corporate and clinical governance. The sum of $30.1 million was also provided to support increased accountability through strengthened legislative obligations. These complement broader reforms, including measures to grow a skilled and professional aged care workforce, according to Minister for Senior Australians and Aged Care Services, Richard Colbeck.

    Also in March, the AICD published a comprehensive summary of the Royal Commission’s recommendations highlighting that the commission’s final report sent a very clear message that boards and management teams must improve their handling of non-financial risk and improve corporate governance in the sector. Their recommendations include:

    • governance standards requiring boards to establish systems for feedback and receiving complaints as well as proper risk management practice;
    • an express obligation to notify the regulator of changes to key personnel, including directors; and
    • enhanced mandatory annual reporting to governments by providers.

    “The major governance challenges that we face are about turning the system that we have now into one that is based on human rights principles,” said Sparrow.

    Clinical governance

    In addressing the importance of clinical governance, Liesel Wett FAICD, Chair of Goodwin Aged Care Services, who also spoke at the event, noted that Goodwin had set up a clinical governance committee and framework in 2012. Functioning much like an audit and risk committee, the committee focuses on clinical care and looks at trends over time, plus evaluates feedback and complaints from customers. The business also brought onboard in-house pharmacists and a clinical nursing administrator who leads clinical care. “The committee is an essential part of our business.”

    It has also addressed the use of restraints. “About five years ago we did a massive piece of work around restraints and we [the committee] made a decision that we supported management's call for no more restraints,” said Wett, who is also CEO of Pathology Australia. “We weren't going to [use] any chemical or physical restraints.”

    Customers at the core

    Fellow panellist, Dr Julie Caldecott MAICD, chair of aged care operator BlueCross, said that in terms of shifting to a more customer-centric model, it is vital for board members to conduct site visits and to talk to residents in order to effectively oversee how well the organisation is delivering care.

     “You can't govern an aged care organisation unless you're experiencing it at the frontier,” she told the audience. “I think some of my greatest insights [come from] when I sit down and have lunch with our residents and I really appreciate first-hand what they're experiencing. The importance of that presence can't be underestimated.”

    BlueCross also obtains feedback from its resident advisory group. “We want them to work closely with us as we change things.” Direct consultation with families about their experience is another source of invaluable feedback. “We've done that twice recently with families who lost someone in our care to COVID-19. They really helped us enhance how we worked with families remotely through that time, and most importantly they're now going to help us plan for the future.”

    The concept of greater customer-centricity requires management and board members working together to identify and act on warning signs and really be present and listen, she added.

    The AICD provides tools and educational support to members of the aged care sector including:

    Board governance in the aged care sector tool

    Clinical governance for boards in the aged care sector.  

    Governing to protect vulnerable people short course

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