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Navigating Australia’s bumpy road to aged care reform

Post-budget analysis has largely ignored the government’s achievements in aged care reform. Ernst Vikne

Much of the budget analysis over the past week has concentrated on the shuffling of expenditure for 2012-13 back to this financial year in order to achieve a surplus. It’s true that $17.6bn of such transfers is hardly pocket money, and needs careful assessment, but this focus (together with the media’s preoccupation with the Slipper/Thomson affairs) means the government’s achievements in aged care have largely been ignored.

Catalyst for change

Australia has fallen far behind most European countries in reshaping its aged care arrangements. This is despite the important Hogan Review of residential aged care facilities in 2004. The Department of Health and Ageing, which commissioned the report, did little to implement Hogan’s findings, as did aged care ministers of either political persuasion since then. Instead, they passed them off as “too difficult to tackle”.

Federal Treasury’s last three intergenerational reports highlighted the problem of a huge shift in the population towards old age, with inevitable rises in health costs and broader aged-care needs. The reports warned this would potentially outstrip available fiscal resources for both the Commonwealth and states. But the problem still didn’t resonate as a priority in health-care planning.

It became almost an afterthought in the National Health and Hospitals Reform Commission’s (NHHRC) 2009 report. The NHHRC noted the need for improved flexibility in aged care arrangements – and some promising examples in Austria, where the elderly could be cared for in their homes with minimal use of nursing homes – but made little comment on advances across Europe, Scandinavia and Singapore over the past two decades.

The NHHRC simply recommended the whole field become the responsibility of the Commonwealth, rather than building on shared programs with the states.

Successive ministers have put aged care reform in the ‘too hard basket’. Richy Schley/Flick

Action on the NHHRC report became the responsibility of then Prime Minster Kevin Rudd and Health Minister Nicola Roxon. The former wanted to achieve real reform in many areas, while the latter was concerned primarily with improved national bureaucratic control, better funding for hospitals, revised primary care strategies to take pressure off hospitals and enhanced preventive care.

A series of Council of Australian Government (COAG) negotiations saw many of the important elements of the Rudd plan dismantled, as the Roxon agenda came to dominate. She had the support of officers the Department of Health and Prime Minister and Cabinet, but faced opposition from several state premiers who didn’t want to surrender control of their health systems.

Rudd chose to refer the whole set of aged care issues to the Productivity Commission, which conducted extensive consultations with the many organisations representing and supporting the aged. The Commission also undertook a rigorous international review, which included care structures in Europe and Asia.

The Commission’s three-person team, chaired by Mike Woods, did an outstanding job, and presented a very comprehensive report to the Commonwealth in June 2011. It advocated huge reform to achieve an ongoing, viable structure for aged care into the future. This included a new national system and new funding arrangements including the necessary, but controversial, user-pays elements.

The Productivity Commission achieved broad agreement from all those consulted, despite raising the controversial issues of how to constructively use accumulated capital of elderly people (largely vested in their homes and superannuation) to contribute to aged care.

The alternative was for the growing cost to be fully met by a younger generation still in employment. But this would require heavy public taxation and intergenerational wealth transfer, which wasn’t tenable.

The proposals came to light when the Gillard government planned to slash expenditure to achieve a budget surplus, and the report was passed to the Minster for Mental Health and Aged Care, Mark Butler, who had just completed a mental health reform project.

The government’s aged care reform package will improve the lives of ageing Australians. Erik Starck

Butler carried out this difficult task with real skill and last month announced his government would adopt most of the Commission’s recommendations and establish a new national administrative process.

Under the reforms:

  • Elderly people will gain support to remain in their homes as long as possible,
  • Support services will be developed so they’re readily accessible to elderly people, including advice on alternative arrangements,
  • The growing problem of care for people with Alzheimer’s disease will receive specific support, and
  • Further funding will be provided to enhance training of community nurses and other carers.

This major reform package has huge implications for all ageing Australians and for Commonwealth and state budgets for many years to come.

Next steps for reform

New ways must be developed to use the growing availability of broadband information technologies to improve communication with the elderly in their homes. This would improve access to support and advice, without the need for frequent visits to GP surgeries.

Such changes will enhance the productivity of skilled community nurses and nurse practitioners who can visit as needed, and will reduce the sense of isolation, which can be such a problem for the elderly.

For the first time, Australian governments have grasped the nettle. The reforms are every bit as important for our social fabric as was Medicare in 1984, even though they will take three to four years to become fully operational.

The package deserves bipartisan support as the many changes are worked through with the states, local governments, health professions, educational institutions, residential care and accommodation providers, and organisations for the aged.

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