Aged Care Crisis wrote a letter to state based health ministers, shadow ministers and other polititicians regarding privatisation of ACAT assessments, asking for their assistance in stopping this retrograde change from happening.  This is something that will affect almost all citizens over the years to come.  It demands debate in the federal parliament, in state legislatures and in public forums.  It should be a matter of considerable concern to the states.

20 January 2020

RE:  Minister for Aged Care's claims about privatisation of ACAT services

We are writing to:

  1. Advise you of deceptive information given to the press by the Minister for Aged Care, the Hon Richard Colbeck.  We ask you to take up the issue with him.
  2. This deceptive information was to justify the surreptitious privatisation of the Aged Care Assessment process and to get this in place before the Royal Commission reported.  We are asking you to please stop this from happening.

Public debate:  There has been widespread concern among those who have experience of or studied the aged care sector, about government's decision to privatise the ACAT (Aged Care Assessment Team) process in aged care.   It is to be combined with the RAS assessment process.  Privatisation of this service is clearly a retrogressive step that is ideologically driven. This was quietly announced in December 2019 shortly before Christmas.

In defending this against criticism, the minister is reported as claiming that "the reform was supported by the Royal Commission into Aged Care Quality and Safety".  Aged Care Crisis has researched the background to this decision and discovered that calls for tenders to provide this service are to commence in 2020, we believe in April. 

There is a clear perception that the government, bureaucracy and industry are pressing on with unpopular privatisation policies which should first be openly discussed and debated by the public and the Royal Commission.  This new privatisation would be firmly in place before the Royal Commission hands down its report.  With long term contracts signed, it would be almost impossible to change.  

An open letter: Aged Care Crisis (ACC) immediately wrote an open letter to the Royal Commission on 8 Jan 2020, asking whether:

  1. The minister had, as claimed, consulted with the Commissioners; and
  2. The Commissioners had approved this privatisation.

The Commission responded on 14 Jan 2020 referring us to the media release and accepting our letter as a submission.  It did not respond directly to the questions we asked.

The Royal Commission's Interim Report ('Neglect'):  We note that the interim report uncritically accepted claims that the ACAT, an assessment by independent clinicians, was somehow to blame for the strong administrative pressure to free up hospital beds blocked by the elderly as they struggled to find a suitable bed in a nursing home.  It acknowledged plans to amalgamate RAS and ACAT but this was not one of the three urgent recommendations that the interim report wanted the government to proceed with. 

Royal Commission media release: The Chair of the Royal Commission responded with a media release on 14 Jan 2020.  This indicated that the interim report did not endorse the government's stated position.  It said "The Royal Commission considers that this integration needs to be progressed urgently".  The media release stresses the independence of the Commission and that it has "not yet made recommendations about which sector or mechanism will best achieve" this integration.  

There seems to have been a change in the Commission's position on this issue and it now sees this as urgent.  This suggests that there may have been additional discussions.

Conclusion:  If the press reports are correct, then the claim by the minister that the Royal Commission supported this privatisation was false.  The report, if correct, shows that he was deliberately deceiving the public. 

The privatisation of aged care is an issue of major concern that many with experience feel is retrogressive and harmful. This is not something that should be sneaked in and established behind the Royal Commission's back and while the public are on holiday. 

Update:  The minister issued a media statement on 15 Jan 2020, indicating that government "has consistently refuted claims that our intention is to privatise the assessment process". The minister clearly does not see 'marketisation' as 'privatisation', even when competitive tendering is intended to secure 'broad market participation'.   

Department of Health webinar:  At a webinar conducted with industry on 11 December 2019, participants were clearly informed that the tender process would be a "contestable market approach" and that all would be eligible to tender.  It would be a 'fee for service' model with broad market participation and contestability.  The draft proposals would be by April 2020, closing date in June and contracts negotiated by November.  It was clear that while some assessments might be done in hospitals, this was going to be a market process and not going to be a state hospital process. Like the failed centralised MyAgedCare system, federal bureaucracy would manage it and not the states.  

Response to questions: When asked about this 'privatisation', during questioning, the three-person panel clearly accepted this. They responded without questioning 'privatisation' as a description of what was happening.  Government were encouraging consortia to apply and supported subcontracting. 

Tendering was to be "for a new workforce" which was going to be a bigger change than the change to the assessment process itself.  Existing agreements would be extended to March 2021 when the new workforce would take over.  The Commonwealth would be doing the training but past experience would be acknowledged.

The importance of clinical experience in assessors was repeatedly acknowledged.  When asked if geriatricians supported the changes, the response was evasive.

Not long after the webinar, a media release by The Australian and New Zealand Society for Geriatric Medicine (ANZSGM) was very critical of the privatisation of ACAT, urging "the Federal Government to reconsider their decision".

There seems to be three agendas:

  1. First, to take it away from the states who are questioning federal government policy.  
  2. Second, to further the government's marketisation and privatisation agenda.  
  3. Third, to confuse the public and hide what is happening from them.  They would not support this and it is not being done in their interests.

Our request:  This is something that will affect almost all citizens over the years to come.  It demands debate in the federal parliament, in state legislatures and in public forums.  It should be a matter of considerable concern to the states.   We are sending you this email to ask you to please assist in initiating this process. 

Yours sincerely,
Aged Care Crisis Inc.

Related links:

  1. 8 January 2020:  Open letter to the Royal Commission 
  2. 14 January 2020:  Statement by Royal Commission Chair on ACAT privatisation, Media Release, by the Chair of the Royal Commission, the Honourable Gaetano Pagone QC
  3. 14 January 2020:  Reply from the Royal Commission 
  4. 15 January 2020:  Statement on ACAT/RAS integration, Senator the Hon Richard Colbeck 
  5. 15 January 2020:  See Also States hit out at federal government's 'rush' to privatise aged care assessments, Sydney Morning Herald 
  6. 11 December 2019:  Webinar - New aged care assessment arrangements, Department of Health, (see section starting at 34:30)  
  7. 13 December 2019:  Changes to Aged Care Assessment Teams will have a negative impact on the care of older Australians, Media Release by the Australian and New Zealand Society for Geriatric Medicine (ANZSGM) 

Additional information

1.  A free market policy was introduced into aged care in 1997 and its implementation intensified with the introduction of the Aged Care Roadmap in 2014.  It is a policy that believes markets work best when they are free and that any interference or control by civil society (communities) or government impedes this. This policy ignores over 2000 years of knowledge about caring for vulnerable people and almost 300 years of knowledge about the markets tendency to be predatory and the need for society to control this.  It fails to acknowledge the vulnerability and lack of knowledge of the elderly and their families.  While the interim report was critical of markets it did, in our view, not adequately address the reasons for failure.

2.  In a lengthy in-depth analysis of aged care submitted to the Royal Commission in October 2019, ACC described how and why this policy directly contributed to a steady deterioration in staffing and care and how this was concealed from the public for 20 years.

3.  International studies in countries that have adopted similar policies have shown that for-profit owned facilities staff more poorly than nonprofits and that they fail standards several times more often.  In its analysis of aged care, ACC revealed that the levels and skills of nursing staff in over half of Australia's nursing homes would be considered to be dangerously low in the USA.  In an analysis done for the Royal Commission using similar sources, Professor Kathy Eager has now confirmed that this is the situation.

A literature review in 2014 by Dr Richard Baldwin confirmed this international data and also found that studies had not found evidence that competition improves care - if anything strong competition made it worse.  

4. Baldwin studied several years of Australian data and showed that for-profit owned facilities were more than twice as likely to be sanctioned than non-profits.  Government policy supported and favoured a profit driven system.  His calls for evidence based policies and for public debate about the sort of policies needed were ignored.

In its analysis submitted to the Royal Commission in October 2019, Aged Care Crisis analysed five years of data released to a politician under FOI.  This analysis confirmed that for-profits were sanctioned more often and failed accreditation standards more often too. 

Actuary Dr Richard Cumpston has recently submitted the results of a study of 10 years of Quality Agency data to the Royal Commission with similar findings.  He also found that the elderly in non-profit facilities were considerably more positive about their experiences than those in for-profits. 

(see Aged care residents reveal which centres are the worst to live inSydney Morning Herald, 8th Jan 2020)

The Royal Commission and its Interim Report

While the interim report was critical of markets, the Royal Commission has so far failed to specifically address the problem of free markets, analyse the way they operate or explore the impact of current policy.  Instead it is, we believe, prematurely calling for submissions for 'program design'.  The focus of these is on principles which describe the sort of ideal service that citizens might want.   The Aged Care Roadmap has similar ideals.

We are critical of this.  Before any program is designed, the reasons why current policies and the patterns of belief on which the current system is based have failed so badly needs to be debated and a strategy developed to eliminate the perverse incentives created and their impact.  The Commission seems reluctant to openly criticise and challenge government policy.

The approach to this problem will have a major impact on policy design.  Unless this underlying problem is addressed, the perverse forces will continue to operate. We are worried that there will be a recommendation for more or changed regulation, when what is required is system change that addresses the problems and makes this failed regulatory recipe unnecessary.  

In our open letter we indicated our concern about this, suggested that a hearing be held to specifically address this issue and offered to contribute.  We will be making a detailed submission critical of the direction taken.

Aged Care Crisis position

Aged care crisis is advocating for a return to a more traditional role for markets and for communities to become more involved in aged care.  Centralised regulation with its occasional visits is incapable of adequately supervising and constraining the strong commercial pressures created by a competitive free market in such a complex and vulnerable sector.   It has failed in the USA, the UK and Australia.

Our position is that: The care of the vulnerable in our communities is the responsibility of every citizen and every communityAnyone providing care is accountable to us.  As responsible citizens we must ensure that they meet our requirements.

Providers of aged care are our agents. The policy of free markets has pushed citizens aside and denied them the power to hold their agents to account and insist that they do what is required.  Care is given in our homes and in our communities. If empowered we can be regularly on site and can see what is happening.

In our submissions we have indicated how the community could be empowered by restructuring the system, and how they could work with government support to make providers accountable to them.  A community driven aged care system rather than a market driven one would not exclude the market but would address the problems in free market policy.  It would meet the Commission's promise of major reform.  In our view what the Commission has suggested for 'Program Redesign' falls a long way short of this.