New evaluation revealed that many Australian nursing home residents are not receiving the care they need and are entitled to.
The UTS Aging Research Collaborationduring which we’re involved, recently published its interim report for 2023-2024 on The aged care sector in Australia.
In this issue, special emphasis is placed on the level of direct care provided to residents in nursing homes by nurses and private care staff. In sharing this evaluation, we acknowledge that there’s a well-documented shortage of staff throughout the economy, and unemployment stays at almost historically lowestEven with workforce pressures in place, many aged care providers proceed to supply very high levels of care.
But a major number are not. Almost two thirds of aged care homes do not provide the level of direct care required. Yet taxpayers have paid healthcare providers tens of millions of dollars to supply this care. As a result, some suppliers run large surpluses.
New standards of direct care
In response to the findings of Royal Commission into Aged Care Quality and Safetythe federal government committed to setting minimum standards for the amount of direct care time residents would receive. In 2022, all providers got a yr to extend staffing levels to meet those standards and got funding to do so.
These standards require a mean of 200 minutes of direct care per person per day across the sector (from registered and employed nurses and private care staff). And 40 minutes of this care should be provided by a registered nurse. The minimum level that every resident should receive varies above or below 200 minutes, depending on their assessed needs.
These standards have turn into mandatory October 1, 2023. For the first three months after mandatory goals were introduced, only half of all providers met or exceeded any of their care goals (total direct care minutes or registered nurse goal). Only 36% achieved each.
This was a slight increase in comparison with the previous quarter, but some suppliers still did not achieve the expected results.
Financing care costs
Residential care for the elderly is financed inside three predominant areas of activity:
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direct care, corresponding to personal care and nursing, including bathing, dressing, toileting and private grooming (funded almost entirely by taxpayers)
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every day living services corresponding to food, laundry and cleansing (paid mainly by residents and limited to 85% of single pension)
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accommodation (government funded for those on lower incomes and self funded for those on higher incomes and wealth).
On advice Independent Healthcare and Aged People Pricing AuthorityThe government has increased direct funding for care for every resident of a residential care home for older people. The idea is that the home will use this money to rent enough staff to meet its care levels targets.
The report shows the difference between the average funding each residential care home receives for direct care and the expenditure on this activity. Comparing the half-yr results of the last three years, in 2021 and 2022, the homes generated a small surplus on average, where revenues were barely higher than salaries and other expenses. This situation, where funding is barely higher than costs, is the intended result of the new pricing reforms.
But rather a lot has modified recently. The government has significantly increased funding to cover the cost of employing staff to realize mandatory levels of care. It also increased funding in light of pay increases for direct care staff, mainly nurses and private care staff, decided by Fair Work Commission.
These taxpayer funds were distributed to each household regardless of whether or not they employed the required number of staff.
With some providers failing to meet their targets by December 2023, the sector generated on average a major direct care surplus of over A$13 per capita per day. Some providers use this money to cross-subsidize losses they incur on every day living services and accommodation.
Which homes are not fit for purpose?
We found that homes that did not provide mandatory care minutes had, on average, significant financial gains from direct care activities. Homes that had staffing levels that were significantly above the required level lost money on direct care.
Moreover, homes that did not provide mandatory minutes of care were more more likely to be situated in metropolitan centers and bigger regional centers. They were also more more likely to be operated by for-profit providers.
In fact, while we acknowledge the tight labor market and the efforts many homes are making to meet or exceed their mandatory requirements, a big number of residents are not receiving the care they need. This also implies that taxpayers are funding direct care that’s not being provided.
With a minimum average level of direct care in the sector because of growth to 215 minutes per resident per day from October 1 this yr (and nursing care time will increase to 44 minutes), this case may worsen even further.