MEDIA RELEASE

MEDIA RELEASE
(Embargoed until 1.00 pm Tuesday 1 May 2001)

Underfunding Aged Care: where's the caring in residential aged care?

The National Aged Care Alliance today released Underfunding Aged Care an analysis of the adequacy of care funding in residential aged care over the last 3 years.

This research report demonstrates in the most definitive terms that there has been underfunding of up to $158.6 million over the last 3 years in the provision of care for older Australians in residential homes.

This is causing:

• an acute lack of funds in residential aged care; and
• pressure on the capacity to provide quality care to older Australians.

It clearly indicates a real decline in care funding at a time of rising demand for aged care services.

The National Aged Care Alliance is concerned that this cut in real care funding will in due course mean less quality care for older Australians in residential homes.

Underfunding Aged Care also demonstrates a lack of transparency in the Government's claimed funding of residential aged care services.

Overall, Underfunding Aged Care is an indictment of the lack of support for quality care in residential aged care homes.

The National Aged Care Alliance calls of government to:

• immediately adjust funding of the aged care system to meet the real costs of care;
• introduce a more accurate method of indexing aged care funding;
• put in place nationally agreed benchmarks of quality care as a basis of funding;
• support research to advance the development of effective indicators to benchmark quality care; and
• provide residential subside rates which recognise the increased dependency of residents.

In addition a number of components of cost pressures on the sector that La Trobe were not asked to consider need to be included in the deliberations, namely:

• Worker's Compensation
  This area of expenditure is entirely controlled by State Government WorkCover authorities and is now estimated to be costing aged care providers an additional $28.1m which is not being funded by the Commonwealth Government. Aged care providers must meet this additional cost from internal resources which could otherwise be utilised for resident care services.
• Accreditation
  The Productivity Commission has estimated that the cost of the accreditation process for aged care providers at 5% of total expenditure or approximately $180 million during the first period of the accreditation process. None of this additional expenditure has been met by Government. It has all been created from internal efficiencies which could otherwise have been applied to the care of older Australians.

Once you combine the findings of the La Trobe paper with the workers' compensation and accreditation cost issues, the estimated underfunding of the residential aged care sector is in the range of $274.1m to $366.7m.

This is quite separate from issues surrounding the capital funding requirements of the industry which will be addressed in a later paper prepared by the Alliance.

The National Aged Care Alliance represent peak national aged care organizations across residential aged care, including providers, unions, health professionals and consumer groups, working together to create a positive future for the residential aged care sector.

The Alliance commissioned the Australian Institute for Primary Care at La Trobe University to undertake this evaluation of the level of Commonwealth funding for the care of residents in residential aged care in real terms from the financial year 1996-97 until 1999-2000 (the last year for which complete financial data is available).

The 18 organisations in the Alliance are:

• Aged & Community Services Australia
• Alzheimer's Association
• Anglicare Australia
• Australian Liquor, Hospitality & Miscellaneous Workers Union
• Australian Medical Association
• Australian Nursing Federation
• Australian Nursing Homes & Extended Care Association
• Australian Pensioners & Superannuants Federation
• Australian Society for Geriatric Medicine
• Baptist Community Services
• Carers Association of Australia
• Catholic Health Australia
• Council on the Ageing
• Geriaction
• Health Services Union of Australia
• Lutheran Church of Australia
• Royal College of Nursing Australia
• UnitingCare Australia

Media inquiries

• Rod Young (ANHECA) 0419 624 178
• Greg Munday (ACSA) 0416 065
• Richard Gray (Catholic Health) 0417 483 469
• Libby Davies (UnitingCare) 0418 634 206
• Jill Iliffe (ANF) 0419 576 590
• Denys Correll (COTA) 0409 810 249
• Ann Patterson (Geriaction) 0402 070 836