Governance will be a major focus of next year’s final report of the Royal Commission into Aged Care Quality and Safety, due to be published at the end of 2020.

    But in the meantime, what do directors need to know about the recently released Interim Report? And what actions should they take? From clinical skills gaps on boards to policy and process reviews, diversity and beyond, Patricia Sparrow, CEO, Aged & Community Services Australia (ACSA), outlines what’s important so far.

    The system designed to care for older Australians is woefully inadequate, according to the Interim Report of the Royal Commission into Aged Care Quality and Safety titled Neglect.

    Directors need to get their heads around the serious findings of the interim report, released on 31 October 2019, and conduct reviews of policies and practice, including clinical skills gaps on boards in aged care and diversity – in terms of the boardroom and caring for people from diverse backgrounds - says Ms Sparrow.

    “The commissioners do talk a lot about person-centred care in the interim report and how they don’t think that aged care is hitting the mark,” she says. “They don’t specifically talk about governance but it is a theme that underpins most of the report – whether governance is strong enough.”

    While there are no specific governance recommendations, the report highlights the poor practices used in the sector and the challenges in recruiting and retaining the right people. It reflects on the “demographic, social and economic pressures” facing the industry, which are critical issues for directors of aged care organisations.

    Read the AICD view on the impacts of the interim report on NFP Governance.

    What do directors need to know about the interim report and what do they need to do?

    I think the first thing they need to focus on is that the interim report contains some very serious findings. It was a very hard report to read.

    Directors need to get their heads around the findings of the report. This is the interim report. It’s giving us a clue of where it is all going in the future. Boards need to start thinking about what they can do. Some of the issues raised are system issues but a number – particularly restraint practices and workforce - relate back to individual providers. Boards should now review policies and practices to look exactly at how their services are operating and at what adjustments need to be made given the report’s findings.

    What active steps can be taken?

    In the interim report the restraint and the workforce chapters are the most direct for individual providers and the others tend to be more system focused. So they need to look at those. But I also would encourage boards to actively monitor Royal Commission hearings as they continue. And look at the issues that are coming out and consider what they mean for their own organization. For example, this interim report captures hearings and evidence up to the 9th August. In October they held hearings on diversity and found issues about the way older people from diverse backgrounds are supported. They are clearly questioning the sectors approach on diversity so boards can to look at their policies on diversity and how they are operationalizing them. It would also be good for boards to review and monitor progress against the new standards. While they don’t get a particular mention in the report there are two standards that underpin all this – governance (standard 8) and consumer dignity and choice (standard 1).

    What the Commission has started to do (during the Mudgee hearings) just after they released the interim report was to make proposals about how best to address issues and challenges facing the sector. It will be worth Directors staying abreast and ahead of these things. We don’t have to wait for the final report in 12 months time to look at s the issues that are coming out and improve our service delivery and governance.

    What areas of governance reform would you like to see addressed in the final report?

    The Commission has flagged that the final report will be about a complete transformation of the system and governance will no doubt be a part of that.

    Boards need to pay closer attention to the clinical governance issues. That is really important because older people are going into residential care with much higher needs at a later stage. So it has become more critical as the population in residential aged care has changed.

    I think it is also about making sure that our general governance is as good as it can be. Governance requirements have increased substantially and are sometimes beyond boards made up of well-intentioned community people without training and support to take on the key role as directors. So we really need to make sure we address the skills and knowledge gaps across the board. This is going to be very important.

    Some aged care centres appear to have closed because the new aged care standards which took effect this year are so stringent. Is this a matter of concern?

    Absolutely. I think though it is a combination of both the standards and the financial picture. The latest data on financials is that about 75 per cent of all rural and remote facilities are operating at a loss. And 50 per cent are operating at a loss in metro areas.

    There are also a whole lot of new regulations that have been introduced, not just the new standards. Most of them we support but aged care is definitely a system and a workforce under pressure. The facilities that have closed have been smaller rural or outer metropolitan ones. It is definitely a concern and we are certainly seeking for the government to take some interim measures to shore up the industry while the Royal Commission continues its work and proposes for fundamental reform and system transformation. It is serious situation and we do not want services to close as this would mean older people would not have access to services locally.

    If organisations are called to give evidence what should they do to prepare?

    I think they should be prepared at any time to give evidence. The Royal Commission’s first request for information from providers sought information on complaints and occasions of substandard care as well as posing some broader systems questions. Most providers should have actually gathered together information and have this as a baseline. But the interim report did show that not every provider did this. So my advice would be that if organisations have not done that they should as a matter of priority. Through this process they can identify risks as well as understanding how the service they are responsible for is managing – what the data tells you. There is a whole process the commission takes you through if you are called to give evidence including asking you to prepare a witness statement and a meeting so you get an idea of the key areas of interest. You have to do your homework so you can answer questions honestly and employing good legal advice is also key.

    You have highlighted transparency as an issue. Is it important in this context?

    Absolutely. I think our community has this expectation and the interim report talks significantly about the need for more and better data and transparency. Many other sectors, such as health, make a lot of data available. While there is a lot of reporting in aged care it’s often not in a form that the community can really understand and make sense of. I think that is the era we are moving into. More data, more transparency, in a way that the community can understand.

    Phil Butler, AICD Not-for-profit Sector Leader, says aged care providers should also expect increased contact from family members concerned about revelations in the interim report and the criticisms it makes of the system.

    The Final Report, due in November 2020, will focus on governance and accountability in the sector and the need for a “fundamental overhaul of the design, objectives, regulation, and funding of aged care in Australia”.

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