Aged Care Crisis wrote an open letter to the Commissioner's regarding the minister's claim that the Royal Commission was supporting the privatisation of ACAT assessments. If true, this has major implications for the approach that the Royal Commission is taking. It points to a disregard of evidence and to important issues that are concerning for the community.

Update (14 Jan 2020): The Royal Commission responded to Aged Care Crisis, drawing our attention to their media release on ACAT privatisation:

Your email highlighted a number of issues and we will consider this information as a submission to the Royal Commission reference number AWF.600.01573.
We would also like to draw your attention to the statement made today on our website by The Chair of the Royal Commission into the Aged Care Quality and Safety, the Honourable Gaetano Pagone QC on ACAT privatisation.
Thank you for your ongoing interest in the work of the Royal Commission.

Yours sincerely,
Enquiries and Correspondence Team
On behalf of the Royal Commissioners
The Honourable Tony Pagone QC and Ms Lynelle Briggs AO
Royal Commission into Aged Care Quality and Safety

8 January 2020

Royal Commission into Aged Care Quality and Safety
The Honourable T. Pagone QC, Commissioner
Ms L.J. Briggs AO, Commissioner


Dear Commissioners,

Re:  Public claim that the privatisation of ACAT services was approved by the Royal Commission into Aged Care Quality and Safety (an open letter)

We note that an article in the Sydney Morning Herald on 30th December 2019 indicated that when questioned about the plan to privatise the new streamlined ACAT (Aged Care Assessment Team) system (to incorporate the previous RAS), Senator Colbeck defended the decision claiming that "the reform was supported by the Royal Commission into Aged Care Quality and Safety".

This comment clearly suggests that the Royal Commission is supporting the government's current privatisation agenda.  This is an important issue. 

We are therefore writing to the Commissioners asking them to confirm that:

  1. The minister did consult with the Royal Commission in regard to the proposed streamlined assessment process combining the RAS and the ACAT assessments?
  2. That the Commissioners supported the privatisation of the new assessment arrangements and the decision to put them out to tender?

Background to the proposed privatisation of ACAT services

The existing situation:  During 2014/15 under Abbott's tenure as PM, aged care was moved from the Department of Health to the Department of Social Services.  The then Minister for Social Services Scott Morrison and his Assistant Minister Mitch Fifield were responsible for managing it. 

Taking an "open approach to market" this department announced that the RAS process which assessed the elderly's needs for simple in home assistance as they aged, had been put out to tender and contracts signed.  The ACAT which assessed their clinical and care needs was still block funded.  Assessments were made by skilled teams with clinical expertise and aged care experience in state hospitals.  That is to change in 2021. 

The issues behind privatisation of ACATs:  As the Commissioners cannot be unaware, there was a rapid escalation of free market policies with the emphasis on competition, consolidation, reduced regulation and on increased outsourcing that occurred during the 2014/15 period when Morrison and Fifield were the responsible ministers.  This was associated with an acceleration of the already deteriorating levels and skills of staffing and care.  By 2016/17 it had reached crisis levels.  This was why the government, faced by an election, called this Royal Commission. 

This crisis has also brought the critical 'paradigm issue' that has bedevilled the sector since 1997 to the fore.  We are referring to the unresolved issue of whether aged care should be provided within the context of the self-interest driven free market philosophy adopted by government, or within the context of a community focused philosophy based on our responsibility to care for each other.  While the word 'paradigm' was not used, this problem has been implicit in the many criticisms made since 1997 and to the Royal Commission.

The failure to address this conflict has seen governments and industry structuring the system within the free market paradigm, while making highly questionable public claims to be providing the sort of care wanted by the community.

Peter Shergold, the bureaucrat charged by the government with implementing the Abbott government's policies revealed the problem in a behind closed door meeting in 2015, saying "government is concerned about a public backlash from people who believe that aged care should be a community service and not motivated by profit".

Previous challenges:  In 2014, Dr Richard Baldwin produced evidence that, as in other countries, for-profits were sanctioned more often than nonprofits in Australia.  This challenged current policy and he called for evidence-based policy.   Baldwin specifically addressed the paradigm dilemma calling for "wider community debate on whether the Australian community is comfortable with policies that will allow, and even encourage, for-profit operators to emerge as the dominant type of aged care providers"

The rebadged Quality Agency within the Department of Social Services had recently replaced the previously more independent Accreditation Agency.   It attempted to debunk this research and maintained that there was no difference.  When challenged, it refused to reveal how its analysis had been done.  Industry responded by uniting to pressure government to continue with the market reforms.  They warned about snap decisions and policy shocks.

Policy implementation: It is interesting that the plans that the current Prime Minister announced to privatise accreditation in 2015 when he was Minister for Social Services, were put on hold when Malcolm Turnbull became Prime Minister.  They had been supported by industry figures.  Also discussed in NACA at that time and put on hold, was the privatisation of ACAT assessments. 

There is a strong perception that the Morrison government is reverting to the "open approach" free market marketisation policies during the period when he was responsible for aged care.  These became so unpopular that the then Prime Minister, Tony Abbott, was toppled.  There is also a perception that public consultations are being carefully controlled in order to 'manage' the community more successfully this time.


Documents released under Queensland Health's 'Right to information' show the consternation in Queensland government within a month of the change of Prime Minister in August 2018.  The move to amalgamate the Commonwealth Home Support Programme (CHSP) with 'Consumer Directed' home care in 2020, was being used as a strategy to further marketise by closing down community minded state and local home care services across Australia.  This will further undermine community involvement and erode social capital.

The privatisation of home care on the Gold Coast was accelerated by removing federal funding from Queensland Government funded Gold Coast Health. 

Federal government advised their intention to remove funding for home care provided by Gold Coast Health under the Commonwealth Home Support Program (CHSP).  The proposed closure date for the service was to be 30th September 2019.   

Over 2,000 elderly citizens were expected to find a private contractor.

The technical reason was that "Gold Coast Health does not comply with the Client Contribution principles of the Commonwealth Home Support Program".  The government required elderly citizens to pay a small proportion of their CHSP funding themselves, but Gold Coast Health was not requiring them to do so.  They were meeting the extra costs themselves and not charging residents. 

The Queensland government stepped in to block the early closure and insist that the service continue until funding was stopped in June 2020.  This was all it had the power to do.

The Royal Commission and the paradigm issue:  The Royal Commission seems to have avoided fully confronting this problem of conflicting paradigms to date.  This is in spite of comments critical of government policy like "It is a myth that aged care is an effective consumer-driven market," and criticisms of previous inquiries in its interim report because they "have not questioned the evolution of the aged-care system into one more reliant on 'market forces'".  These are not followed by a good critical assessment of these market policies by the Commission itself.

It has embarked on a process of aged care 'Program Design' without addressing this important issue or engaging the public in a debate.  It seems to be addressing the symptoms rather than the more important underlying pathology.  We should be having a hearing where this issue is publicly addressed.  Evidence can then be presented and different opinions and arguments publicly canvassed. 

If it has rubber stamped this next privatisation, then this is of considerable importance to the public on whose behalf the Royal Commission is conducting this inquiry.  It shows how the Commission is approaching the paradigm issue.

Public consultation on 'Streamlined Assessment'
(but not privatisation)

Proposed in 2014:  In a paper dated January 2014, industry-dominated government advisory body, NACA, reviewed the aged care assessment process.  They recommended that a single assessment system be established and that this service be provided "by service providers unless a consumer specifically requests an independent reassessment process"

In our view, this raises some concerns about a perverse conflict of interest when providers would be setting their own payments and then be expected to apply to reduce their own funding when a resident's condition improved. 

The NACA paper indicated that "Government could elect to award the delivery of this service to one of the existing agencies or to have a competitive tendering process and select the best option in each local area."

Community consultation in 2018:  Over the holiday period in December 2018 and January 2019 when citizens were on holiday, the Department of Health conducted a carefully structured consultation process about the proposal that the RAS and ACAT assessment processes be streamlined and amalgamated.  This was based on a recent recommendation made by David Tune, the architect of the Aged Care Roadmap. 

The explanatory Consultation paper indicated that "Decisions have not been made about specific implementation or tender arrangements for a new national assessment workforce.   This discussion paper does not make assumptions about who the providers of assessment services will be into the future with regard to their status as existing or new providers, or as public, private or non-government organisations".

This issue was not addressed in the questions and response boxes to which the consultation was reduced.  The views of the public (those who were not on holiday) about this issue were not canvassed.

Industry body LASA clearly expected this to be privatised indicating in their response to a question about competency that "At the national level, organisations tendering to be assessment providers need to demonstrate that their staff mix has the expertise. . . ".

Announcement in 2019:  No more was heard of this publicly until the holiday period in December 2019 shortly before Christmas. The planned changes were published on the Department of Health website, deceptively describing the changes as 'a better experience for older Australians' under the new arrangements.  There was no media release or other publicity.  One paragraph revealed that the assessments would be put out to tender in 2020 indicating "These organisations will be selected through a national tender process". The process will, almost certainly, be implemented before the Royal Commission's final report.

Researching privatisation of ACAT services

Our research shows that:

  1. On 11 February 2019 at the Commission hearing in Adelaide, this matter was referred to by COTA's CEO, Mr Yates, also a very influential member of NACA and a strong supporter of government free market policy in aged care.  He pointed to the conflict between the interests of the elderly and those of state run hospitals where the elderly were seen as 'bed blockers'.  In 2014 NACA and Mr Yates wanted assessments to be conducted "by service providers" whose strong commercial interests would be to assess the profitable as requiring residential care.  Does he still want this?

    In the section dealing with younger people in aged care in Volume 1 of the Commission's interim report (eg. page 238), credence is given to Department of Social Services officials who would be advised by NACA and Yates since 2014.  They blame the ACAT process for the pressures to remove perceived 'bed blockers'.  The ACAT teams are supervised by geriatricians and assessments are carried out by trained staff.  They assess the person's needs and where they can be best met.  Their professional responsibility is to their patients and not the hospital. 

    It is the hospitals and not the ACAT teams that exert this pressure.  If this is happening and we know of examples where it has, then this is another very serious example of the way managerialism and neoliberal ideas have adversely impacted health care by creating contexts where administrative pressures can override clinical considerations.  That clearly requires urgent attention.  It is not a reason for bad policy based on ideology.  When resources are inadequate then triage and rationing by clinicians becomes necessary.  Accurate, well informed ACAT assessments become more important when triaging and this is an argument for making aged care part of health care and so a local and state responsibility and not someone else's.

    We suggest that there are better ways of addressing this than moving important services requiring considerable skill from a jurisdiction, which has generally provided effective care, to one that has shown itself to be inept and incapable of doing so. The failed MyAgedCare process is a good example of the problems created.

  2. A Queensland Health Advice Note dated 28 May 2018, drew attention to matters referred to in the Federal 2018/19 budget that revealed what was to happen.  They were concerned that the new process would be subject to competitive tender to non-government contenders and that non-clinicians would be carrying out the assessments and not the highly skilled people they had assembled in their hospitals.

  3. The Summary Report on the Consultancy process dated September 2019, showed that the responses mostly from industry-related sources were divided.  There were those who indicated that "a competitive model is unsuitable for assessment functions that focus on quality, consistency and equity of access" and those who thought that "competition for assessment services would provide the best value for money and drive performance, efficient use of resources and innovation"

    There was a similar division about the workforce between those who wanted to retain the state hospital expert teams, and those who wanted "a national workforce, separate from state and territory health systems, should deliver aged care assessment in community and hospital settings".  Actual numbers were not provided.  While this matter was not included in the questions asked, industry were clearly debating it and addressed it in their responses.

  4. At the 17 October hearing of the Royal Commission in Melbourne, Dr Maddison, president of the Australian and New Zealand Society for Geriatric Medicine addressed this issue.  He warned of the consequence of disrupting the close association between the assessment processes and the hospitals.  He considered that there was unlikely to be "meaningful involvement of geriatricians" in this.  The need for residential care in perhaps a majority of instances is precipitated by sudden deterioration or an acute event that results in admission to hospital.  This is where expert assessors are most often needed.  

    Government seems unable to recognise the additional insights that real knowledge and experience bring to this, or to acknowledge the failures in the NDIS where there have also been problems as a consequence of similar policies.

    We appreciate that follow up assessments in the residents home are often needed, but these expert teams and the hospitals where they work service these communities and already work with doctors and social services there. 

  5. On 2 November 2019 The Saturday Paper investigated and reported scathing comments about this privatisation from many of those in the sector.  These included the end of "any meaningful direct involvement of geriatricians' and other specialists", - - - "de-skilling the assessment workforce through loss of clinical expertise and knowledge", - - - "penny wise and pound stupid", - - -  "biting off this decision without any consideration of the broader system is really unhelpful"

    Concerns were expressed about "conflicts of interest within assessment organisations, … breaking existing relationships between assessors, providers and health services" and "unintended consequences of funding model and performance framework."  It suggested that this privatisation was in conflict with the thrust of the Commission's interim report.

  6. A recent newsletter on 2nd January 2020 indicates that the Australian Physiotherapy Association has been aware that this was likely to happen for at least a year.  We note that as a member of NACA, it is subject to a gag clause that prevents it from openly criticising majority decisions and advice given by NACA. 

It seems that this controversial privatisation has been discussed and planned for a long time, but not disclosed openly or opened to public debate.  It is another managerial decision based on ideology and not on the real life experience of those who have been directly involved, large numbers of whom were strongly opposed.

Discovered by citizens:  There are now many citizens who are very interested in what is happening and they are watching closely.   Someone saw the announcement and there was soon an angry clamour on social media.  When politicians and geriatricians started to protest and drew attention to the adverse consequences of this, the press published an article.

When challenged, the Federal Minister for aged care justified this decision saying "the reform was supported by the Royal Commission into Aged Care Quality and Safety".   The paper did not publish a denial by the Royal Commission and it is difficult to believe that the minister would lie to the public.

It is clear that in amalgamating RAS and ACAT, the opportunity is being taken to include the ACAT assessment with its requirement for skilled clinical assessments under the same sort of outsourcing system under which simple RAS assessments about gardening and cleaning services at home have been made.  This is far more concerning because of the increased vulnerability of this group of citizens.  There will be considerable difficulty and additional cost in recruiting the necessary skills.

This is clearly a matter of considerable public interest and we are therefore writing to ask the Commissioners for clarification.

The paradigm issue deserves attention

It is important that the Royal Commission disclose publicly where it sits on the important paradigm issue that government is so shy about.  It should also give the public an opportunity to express its views on this important issue and indicate the sort of system that citizens are likely to trust and want.  

We stress that the issue is not really whether for-profit providers should be permitted to provide services, but the policies that govern this, the patterns of thinking that should be adopted and the mechanisms needed to ensure that only those who can be trusted to operate within the patterns of thinking required by the community remain in the sector.

This creates a context within which good relationship based care can be provided.  Communities should have oversight and the power to reject those who are unable to meet this requirement.  We have addressed this in our submissions and suggested how it could be accomplished.

We urge the Commission to open this issue to public discussion by organising a hearing into just this matter.   

Over the last thirty years Aged Care Crisis and/or its members have tracked and analysed how the implementation of the free market philosophy has impacted on health and aged care in Australia, the USA and the UK.  We would welcome the opportunity to contribute to such a discussion.

Yours sincerely,

Aged Care Crisis Inc.