Time to make aged care accountable.
Accountable to who?
To citizens and their communities
The problem: In spite of many warnings that this would never work we have had a centrally managed free market aged care system without an effective customer for 23 years. It has been failing for all of that time and 31 inquiries over the years have either failed to detect the problems, were ignored when they did, or were addressed with regulatory changes that did not change the basic structure of the system. Local communities who might have restrained market excesses had no role and were kept out of the loop.
When the system was challenged by glaring failures they were explained away and we were assured that we had a world class system with world class regulation. It has now been revealed that this was a system to be ashamed of. There has been widespread neglect and abuse of our elderly citizens for a long time. Regulation was a farce. Other countries have had similar systems and none of them have worked well. When it finally imploded government called a Royal Commission.
The Royal Commission: The Royal Commission has been sitting for over 2 years. During that period it has interviewed 628 witnesses at 22 public hearings and workshops, held 14 Roundtable and other discussions with over 130 experts, visited 33 aged care facilities, conducted 12 Community forums, prepared 8 Background papers, commissioned 15 reports, done their own International Research where the commissioners met with 39 different authorities or expert groups and in doing so spent $93.3 million. It issued an eight volume final report and made 148 recommendations which broadly required much greater expenditure and a revamped management and regulatory system.
The great changes that have been made: The Commissioners have advised a fundamental and vitally important change. They recommend that like health care, good aged care should be a fundamental right for all citizens. As in health care how frailty will affect each individual and what we will require is not predictable. Like health care it should be funded by a Medicare-like levy.
The report also takes some steps to decentralise the system and set up regional managers but it is not specific about how this will work and in our view does not go far enough, Decentralisation and regional management is only one of the critical steps needed to address the problems.
The royal commission takes us a lot of the way in other ways too but it fails to take the final steps needed to undo deeply flawed policy and fix this permanently. Root cause issues remain and they will continue to challenge the system. The failure of the Commissioners to address them will compromise their proposed solutions.
The problems that remain: At the end of all that effort, if the recommendations are accepted by government we will still have a largely centrally controlled and managed aged care market with promises but not a strong commitment to regionalise. It still does not have an effective customer. Communities have not been given a key role or empowered. These are core problems and they have not been addressed.
The failure of the Commissioners to properly examine the history of the system and their misunderstanding of what happened in 1997 is in our view a fatal flaw in the report.
What they have done is to throw a vast amount of money at the problem, recommended important changes to those sections that have failed badly and then ramped up regulatory effort. While these efforts will be beneficial and many were essential, it might have been more sensible to actually address the problems created in 1997 when a strongly competitive market was set up without an effective customer or an involved community to hold the system to account.
This could have been done by rebuilding and supporting local community structures and then restructuring the system to empower citizens and local communities as co-customers acting with and on behalf of their vulnerable older community members. The problems introduced in 1997 remain and unless they are addressed will almost certainly resurface in another form at some future date.
As we have explained elsewhere the simple first step required to address the problem was ideologically unpalatable (even threatening) to those whose lives had been spent in building this market system - including the commissioners and those who advised them.
In the section below we describe the main features of the report. Our comments are in expandable panels.
The Royal Commission’s Recommendations
The two Commissioners have different backgrounds and as a consequence understand the problems in the system very differently.
They have evaluated the vast amount of material they have considered and the accounts they have heard differently. Although their objectives are similar, they make different assessments writing separate chapters and make different recommendations at multiple points in the report.
A system designed to fail: They consider that the system is “acting as expected and intended, but not producing the best outcomes for those in need”. The government has relied on an assumption that the aged care system could be left to the operation of an “ordinary market” and adopted a hands-off approach.
The Commissioners identified multiple consequences of this including, serious underfunding, poor staffing, ineffective regulation and more. They described “a one-size-fits-all approach to program design and delivery” and a system that is fragmented and poorly integrated.
They largely ignore the fact that throughout this period government was being advised by economists and business leaders wedded to a belief in free markets.
Community: They noted that “people receiving aged care and their local communities are not well represented in the aged care system” and agreed on the “absence of strong consumer voice in the aged care system”. There were problems in services for regional Australia, for Aboriginal and Torres Island Communities, immigrant families, the LGBT communities and those with dementia.
A market to control: Both still see this as essentially a market problem and focus on controlling the market and supporting those sectors where the market does not work rather than changing the sort of market to one that actually works. That would challenge the belief in free markets.
The public Service: Both are concerned about the culture and decline in the public service. Briggs comments that “there are too few highly skilled and knowledgeable Government aged care workers and too much reliance on external contractors” and that this is a problem that “beset the entire Australian public service”. They refer to the 2019 Thodey Review which blamed this on “the prioritisation of short-term responsiveness at the expense of long-term thinking”. This explanation is inaccurate.
Aged Care Crisis comment on these views
The Commissioners: Both Commissioners have a market background. Commissioner Briggs is a long-term bureaucrat and has been in charge of implementing governance processes to control market excesses since 2004. She is a prominent member of a governance group.
The other is a judge with expertise in Commercial law, but also a previous knowledge of social science, involvement in human rights and a board member of nonprofit organisations.
A system designed to fail: This is certainly true but also for many reasons they did not identify. They identified many problems in the aged care system itself.
Their relationship with wider policies and other failed sectors, like the banks and the Vocational Education and Training (VET) system were ignored. Vulnerable people were similarly exploited in these and other sectors. As a result root causes (the disease) in society responsible for what they were describing (the symptoms) were not identified and addressed - only the failures that resulted in aged care itself.
The Community: This is a problem that they pay lip service to by allowing them input, but do not adequately address by giving them a role and power. Doing that would challenge ideology. Their criticisms might still be managed rather than addressed.
The Nature of ideology in aged care: In 2015 Peter Shergold, an early departmental mentor of Commissioner Briggs, later chair of the Aged Care Sector Committee and then chair of Opal Healthcare, described the thinking of both government and industry that resulted from this ideology to an international industry meeting.
Shergold indicated aged care was an immature sector with little market competition, constrained by government funding and over regulated because regulation in aged care was misplaced.
He considered “the aged care sector should resemble the hotel industry”. Others who thought the same way had called for a trip advisor web service. The elderly could be enticed with an idyllic holiday sendoff – then as we now know neglected and abused.
This distorted view of ageing and aged care is an example of the ‘strategic ignorance’ that affected the entire sector – not acknowledging what they know.
That deep down he really knew what aged care should be, but did not acknowledge even to himself, is revealed when he said “government is concerned about a public backlash from people who believe that aged care should be a community service and not motivated by profit”.
Avoiding challenging ideology: The major contribution to failed policies made by earlier reviews (eg by the Productivity Commission in 2011) and of more recent government policies like the Living Longer Living Better (LLLB) reforms in 2012, the Red Tape Reduction program (2014), the Competitive Consolidation policies (2014) and the Aged Care Roadmap philosophy (2015) are not adequately addressed by the Commissioners.
The revolving door of appointments and the close involvement of industry as advisors and consultants in every policy decision made is largely disregarded. These would challenge their conclusion as well as the underlying ideology.
The public service: The explanation attributed to the Thodey Review to explain the decline of the public service is another escape from challenging ideology and the policies based on them by economists and the Commissioners.
This is a great example of ‘strategic ignorance’ by an establishment for whom the truth is simply too challenging for believers to acknowledge to themselves although deep down they must know.
What happened is a direct consequence of the neoliberal free market policy of small government and privatising by outsourcing. It started under Hawke in the 1980s, accelerated under Keating and took off on steroids after Howard.
On 20 May 2000 The Australian reported that the “secretary of the Department of Prime Minister and Cabinet. Moore-Wilton has imposed corporate-style reforms with an evangelical zeal. Accelerating changes begun by the previous Labor government, the Coalition has increased the power and pay of departmental heads, outsourced all but core services, sidelined the unions, introduced performance-based incentives and cut jobs- -” . There was a 32% decline in government employees between 1987 and 1998.
In 2018 Bernard Keane wrote of “the huge downsizing of the public service under both Labor and the Coalition” and the “clear decline in the overall quality and experience of senior public servants”. He considered they were more likely to be “compliant with the government's agenda”. He goes on to describe the “growing problem of sheer incompetence” and multiple bungles as a consequence.
Bernard Keane is an example of the sort of witnesses the Royal Commission did not interview when redesigning the system. They would not have been considered credible.
Governments have not abandoned these policies started in the 1980s and the Commissioners are unrealistic if they think that government will willingly reverse this trend.
Pagone is strongly influenced by a recently released 1997 cabinet document in which the bureaucracy and cabinet specifically set out to ration care to keep costs low without regard to outcomes for residents.
He largely blames this rationing for most of the problems and ignored the central roll that the industry played in developing policy.
He does however consider that corporate governance, management and workforce culture was poor.
Blaming government and industry
Briggs recognises the problem of rationing but places greater emphasis on poor practice by approved providers,
She considers that they focused on financial matters and turned a blind eye to what was happening, She indicates that their actions “have contributed to many of the systemic problems in the delivery of aged care”
Disagreements but agreement in repealing the 1997 Aged Care Act
The two Commissioners indicated that they “differ sharply in our opinion on certain aspects of the arrangements necessary to give effect to our common purpose of the new aged care system”.
Both recommend a rights based system in which every elder is entitled to receive the care they need. They recommend repealing the 1997 aged care act which created a rationed system and replacing it with a new rights based act where everyone was entitled to the care they needed.
Independence from government
Pagone understood the intractability of beliefs and cultures. He was concerned by the “cultural issues in the current institutions” being “engrained in the nature of an organisation subject to Ministerial direction”.
He did not believe that the current government system could successfully address the changes required.
He recommended that ““an independent, dedicated statutory body should be established as system governor, administrator and regulator— the Australian Aged Care Commission”.
This took the system out of the hands of government and the minister. This new Commission was to be appointed by the Governor General.
He wanted a separate body to decide on funding, which would be binding on government.
Government control the best
Briggs, a long-term bureaucrat, thought that Pagone’s independent Commission would delay reform and be more costly.
She strongly supported rebuilding and enhancing the current system through the department of health and in giving the minister final responsibility.
She argued that “strong Government leadership” was necessary. She claimed that “The Prime Minister and his Cabinet have recognised the importance of reform in aged care and will be strongly committed to it”.
Briggs advised an independent body to assess the costs of funding but that would be to advise the minister and not be binding.
The report considered that “aged care remains highly centralised within the Government and there is little presence at the regional and local level”. Both Commissioners agree that “effective market governance requires local capacity and engagement with local networks”.
Older citizens wanted “access to personalised and local services to help them access and make use of aged care services in their area. People should not have to fend for themselves when starting out with aged care”. This included follow up and ‘check ins’ to see that requirements were met and taking action where necessary. Both wanted a “a strong regional presence”.
Pagone proposed a network of regional or local offices throughout Australia.
He recommended that “its headquarters should not be in Canberra” so that “the allocation and integration of resources” will be “according to the identified needs of the local population”. This is spelled out in Recommendation 5.
Briggs indicates that “Shifting from a rationed system to a needs-based and demand-driven system will involve a shift from a centralised top-down to a localised bottom-up approach to system management. There will remain a role for centralised coordination through the provision of standard data, tools and information, and consistent assessment of needs”.
Briggs considers that ‘unmet need and evaluation and stimulation of supply-side capacity must be undertaken at the regional and local level”. This is indicated in Recommendation 8
In a table on page 63 of Volume 3a Briggs indicates the regional arm of the department will be involved in care finders, assessments, as well as local system and program management.
The Commissioners noted that “the absence of a strong consumer voice is a notable feature of aged care.” They indicate that “Only the community can bring to bear the desire and will for lasting change”. They want a “much greater face-to-face presence”. Volunteering was supported but under the supervision and control of the providers.
Both Commissioners wanted older citizens to have more information and to be able to express their views. They want those managers who make decisions to consider them.
Commissioner Briggs wants government to establish a “a high-level older people’s advisory body—The Council of Elders— with a wide remit to consult older people and advise the Minister and Department “.
She felt that the department would “maintain a local presence to ensure that it is able to listen to the local community, match service solutions to local needs, and provide personal support for older people”. There would be about 50 such units across Australia. They would have a role in case management.
Commissioner Pagone recommended an Aged Care Advisory Council with wide representation to advise on policy and it would include community representatives. The representatives would be appointed by the minister.
The Commissioners also encourage ‘carer hubs’ where informal carers can meet and access information and advice,
In spite of these aspirational claims, neither Commissioner suggests that citizens including elders should have any role in management or direct oversight, nor any power to influence and control what happens in their community or in the wider system. They are not given the power to insist on change that challenges belief or the policies on which it is based.
Commissioner Briggs indicated that “it is important to appreciate that the success of our reforms will require purposeful and strategic governance to steer the system in the desired direction, and constant monitoring and refinement of arrangements- - - .”
Accreditation: Both Commissioners support a continuation of accreditation using standards overseen by the Aged Care Quality and Safety Commission. They advise a revision of standards, more rigorous oversight and stronger sanctions.
While they talk of regionalism it is limited. The focus and most of the attention remains on central management and control. This is like the system that has failed.
Oversight of the system: Both commissioners recommend an independent central Inspector General to oversee the operation of the system
Probity: Twenty-three years after probity requirements for owners were abolished in aged care, the report advises a probity assessment of both providers and their key personnel to ensure they are fit and proper and can be trusted to provide aged care.
The report indicates that the regulator should “consider the fitness and propriety of the provider and its key personnel, the provider’s capacity to deliver high quality and safe aged care services within its scope of approval, and, where relevant, the provider’s prior performance in delivering high quality and safe aged care services”.
Strikingly absent from any oversight or probity requirements are the owners who control the providers, appoint their managers and ultimately dictate policy and practices.
Home care: The Commissioners note that “the regulation of home care is particularly lacking”. They make recommendations to improve regulation and want similar regulation to that in residential aged care. They are going to rely on accreditation considering it to be necessary to address this lack of oversight and also to provide a feedback system.
Complaints: The importance of complaints handling and its current inadequacy is recognised but what is suggested is another centralized and beefed up complaints system, but with greater transparency. They rely on the advocacy system but note that currently resolution of an issue by an advocate has often “not translated into practice”. Commissioner Briggs considers that a formal reporting mechanism will address this.
Protection of whistleblowers: This advice is long overdue but this is not something that government has done effectively anywhere else. Instead it has set a bad example by pursuing those who expose its own misconduct.
Serious incident reporting is to be increased.
Enforcement: The report advises greater enforcement powers and larger penalties including civil penalties and compensation for those who are harmed. The regulator needs to “flex its ‘regulatory muscle’ by moving up the sanction hierarchy and imposing more severe sanctions”.
Data Research and financing: The Commissioners wrote separate chapters and made different recommendations addressing research and data handling, funding of the system, capital financing, financial oversight, mechanisms for raising funds and more.
Both Commissioners recommend a strong focus on governance processes. Governments role in governance includes the structure and the way in which the sector is managed and regulated.
They devote a chapter to 'provider governance' - the processes providers use to govern themselves. They recommend regulatory changes to improve provider governance. Their faith in governance is reflected in their conclusion:
“We consider that our recommendations in this chapter, if implemented, will lead to improvements in the governance of care and in corporate governance. This will strengthen the integrity of the aged care system and focus approved providers on their core task of delivering safe and high quality aged care”.
Many important practical reforms
The Commissioners recommend many changes in order to
- Improve services to dementia sufferers.
- Improve services to Aboriginal and Torres Straight communities, remote regional communities, LGBT citizens and different ethnic communities.
- Address the ongoing problem of the inappropriate admission of disabled younger citizens to nursing homes.
- Address the huge backlog and multiple problems in home care
- Increase respite and rehabilitation services to meet need
- Improve the health care services provided to the elderly at home and in nursing homes.
- Educating citizens and providing them with more information
MyAgedCare and care finders
Both Commissioners acknowledge the deficiencies in the MyAgedCare website but support an attempt to provide more data and make it more useful.
They recommend local care finders working with the local arms of central management. They will help families to find the aged care services they need. They envisage that thousands will need to be trained. They will play a role in care management and assessment teams.
Commissioner Briggs considered that this should be modelled on the navigator program being trialled by COTA.
Both Commissioners recognise the appalling state of staffing in aged care and largely blame government rationing for this. They recognise the urgency of the problem.
They fail to acknowledge the equally important role that industry played in working with government and in encouraging it to give them a free rein to reduce staff and hide that from the public.
They recognise that many migrants end up working in aged care out of necessity and not because they are driven by humanitarian motives.
They make far reaching recommendations to increase pay, set minimum levels, ensure transparency of staffing, increase staffing skills, get the right mix of skills, improve staff training and turn jobs into careers by creating career paths. They support professionalising the personal carer workforce.
They recommend a Registered Nurse be on site 24 hours a day, seven days a week at every residential aged care facility. Staff should whenever possible be employed by the providers themselves.
Structure of system - new aged care program
The Commissioners recommend changes that will integrate the assessment and provision of services including palliative care, respite and rehabilitation, and health care across residential and home care.
The inappropriateness and unsuitability of the large more efficiently profitable nursing homes built by the profit focused providers is recognised. They recommend efforts to steer them and entice them to build and operate smaller more friendly units, particularly for residents with dementia.
Data collection and research
The report supports extensive data collection and research. It also recommends that we follow the USA in using Quality Indicators and develop a star rating system to inform prospective residents and rate providers.
The Commissioners advised an immediate boost to funding to address the acute problems and that is urgently needed.
They recommend a universal entitlement to care with an independent assessment of the costs of care. This would be paid by government and not be means tested.
The costs of accommodation and everyday living should be paid by the recipients of care subject to a means test. The exception to this would be “people living in the community and receiving support from aged care providers for the ordinary activities of daily living, who should not be required to contribute to the cost of that support”.
They recommended that funding of care be based on a Casemix funding system similar to that adopted in the USA. Other services would be block funded when appropriate,
There is agreement that the Refundable Accommodation Deposit (RAD) system for funding care be phased out.
Paying for the services needed and without any rationing will require a massive boost in funding.
While recognising the problem created by vulnerable individuals and the inapplicability of a market in rural and remote sectors the commissioners faith in competition remains. They aim to promote competition, “where reasonably practicable”.
Pagone for example rejected protecting the funding allocated for care from profit taking as was done in the 1990s because this would inhibit providers who would not invest if they did not get a reasonable return.
Also of concern was the need to tightly specify the services provided so as to prevent “cross-subsidisation to create perverse incentives”.
Aged care levy
Both Commissioners recommend that aged care be funded by a levy like Medicare.
Pagone favours a hypothecated levy in which money is paid by working people and set aside to fund their own future aged care needs.
Briggs apposes this and wants the levy to be like the current Medicate levy in which each working generation pays for the previous one.
She criticises Pagone’s proposal because this would force the current generation to pay for both the present generation of seniors as well as their own future aged care. This would compound generational inequity.
A failure to confront ideology:
The Royal Commission’s assessment of the situation is incomplete. They failed to recognise the profound changes that have occurred over the last 40 years as western countries adopted an ideological belief system that radically altered the power structures and relationships between markets, government and society.
Markets became ascendant and both society and government were eroded. This had profound consequences including for aged care. In our view the Royal Commission’s failure to recognise and address this compromises the long-term viability of their recommendations.
Myths: Like all ideologies based on misconceptions, this free-market ideology was soon supported by a hierarchy of mythical beliefs that made what they did legitimate. A damaging myth was that there was a mystical hidden hand that made markets work provided that they were not interfered with. If left to themselves markets would find the most efficient and least costly way of producing the best products and services.
This myth ignored 300 years of knowledge showing that it was the control exerted by an informed customer and an effective civil society that made the market work. That some were vulnerable and needed to be protected by society was ignored and society was pushed aside.
The number of corporate scandals that have occurred and the way in which almost every vulnerable sector and their vulnerable customers have been pillaged has been ignored by believers and those who questioned were ridiculed – processes like ‘strategic ignorance’ and ‘wilful blindness’ were an instinctive response to challenge.
Aged Care: In aged care specifically, there was the self-serving myth that ageing was not a disease and nursing homes were not hospitals, so the elderly did not need expensive skilled staff to fix the problems. Money was being wasted and there was plenty of fat in the system. The market would soon fix that and government should enable them to do that.
These ideas were soon deeply embedded in the market and in the politicians who supported this ideology. The market set out to cut out the fat and the politicians helped them to do so. Prime minister Abbott was so persuaded that he moved aged care out of the Department of Health in 2014 and gave it to Social Services instead. Both political parties are still tied to this belief. They depend on donors who have a vested interest in preserving this system.
The Royal Commission
The Royal Commission treated aged care as an isolated failed system without accepting that it was part of a wider problem of failed markets. Instead it blamed the federal government and at least partly exonerated the markets that were the driving force behind government policies and their constant advisers. It resorted to the strategies that have been used unsuccessfully over the last 20 years to contain and control the unbalanced pressures in the system. This remains a problem as it is still market-led and the nature and operation of this market has not changed.
The Royal Commission has made important and useful recommendations that address the many demonstrated failures. If the government supports and implements their recommendations there will be a steady improvement. The system will improve but is likely to remain under stress as the perverse pressures push against the regulatory efforts. Problems are likely to recur.
A Community led system: We have advocated for a system where independent regional managers support and work with local community organisations in:
- Planning the services needed for their communities,
- Contracting for the building of facilities required,
- Vetting and assessing trustworthiness and capacity before contracting and licensing providers to provide care locally,
- Being involved in providing oversight and support to both recipients of care and providers of care, and
- Replacing providers who fail to meet their expectations with providers that do.
To enable the replacement of providers without disrupting staff or residents lives, aged care should be restructured so that owners of facilities and providers of care are separate operators. Providers should be rewarded by being paid for managing care and the funding for care protected from profit taking.
Such a system would relieve local managers and staff from the perverse pressures in the system and enable them to express their innate humanity, which would become an asset to the business.