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.
Comment on repealing the Act
Repeal of this deeply flawed Act that created a competitive free market, which was never going to work, is long overdue. This would have happened many years ago if there had been transparency and data had been collected, analysed and properly acted on.
Bill of rights: We have had bills and charters setting out the rights of older Australians since 1991 and in spite of that older Australian’s have been neglected and abused. These words and regulations became tokens - hiding the neglect and abuse that was happening.
Markets: As Adam Smith indicated 300 years ago and David Malouf said about Australians in the 1990s, businessmen look for and exploit any vulnerabilities they can find. Simply legislating rights becomes a constant battle as distant regulators struggle with powerful real life markets that seek out loopholes and opportunities while claiming to uphold rights.
Rights are a product of caring relationships and community values – not of markets. If markets are to respect the rights of citizens then they must serve communities and be fully accountable to them for everything they do as well as how they do it.
A new act: We agree that a new act should enshrine the right to good care for everyone and these rights should be legislated. But it should also create a system that will embrace these rights by clearly defining and restructuring aged care as a community-led service to which the market contributes.
Local Communities and regions should be helped to plan services for their communities, contract real estate companies to build facilities, vet providers carefully before contracting them to provide services, and then be able to easily replace those that do not deliver the care required without disrupting staffing or care. Governments are drawn from and represent citizens and communities. Their role is to build and support communities not push them aside as has happened.
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.
Comment on independence
In our view Pagone has a better grasp of the ideological and cultural issues but both models entail a complex central bureaucracy. This is likely to lead to processes and guidelines for dealing with every problem. There will be greater rigidity and less flexibility and responsiveness.
But even Commissioner Pagone’s proposal might be a rather indirect form of independence. His new independent ‘Australian Aged Care Commission’ is to be appointed by the Governor General.
The Governor General is appointed by government and is advised by government. Government appoints people who think and make decisions like they do. This structure does not free it fully from the dominant views of government and establishment.
We need only look at the ‘Independent Accreditation Agency’ established in 1997 and claimed to be independent until 2014 when all pretense was abandoned. It was never free of political influence and was ‘captured’ by a revolving door of representatives from the industry it was supposed to regulate.
In our view, independent regional management working with and supported by communities would address Pagone's well founded reservations about government culture and capacity more effectively than his proposals, although both might be better.
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.
Comment on Regionalism
Regionalisation of management and oversight is only the first step in addressing the underlying problems responsible for the multiple failures. There was little specificity in how this would be done in the report. We would have liked to see more regional offices and greater involvement with local authorities to avoid duplicating staffing and services.
In the past: Inquiries in the 1970 and 1980s realised the system was so diverse and the individual situations so complex that they could not be handled centrally. They too recommended a centrally integrated but regional and locally managed structure. This advice was not followed and the reform strategy was abandoned in the 1990s.
We strongly support regionalism as a first step to the community-led system that is needed but we needed more detail. The way this would work with and involve communities was not specified by the Commissioners.
Neoliberal fee market ideology was spread across the world and into every facet of society by managers. What the Commissioners propose was not independent and could too easily become a mechanism for greater managerialism and tighter control of community.
It would also become an early warning system to alert government to the presence of dissident groups who challenged belief. If so government might come to see community involvement as a threat rather than the way forward.
Pagone has based his regionalism on suggestions in an early submission from Professor Swerissen from the Grattan Institute. We support that model of regionalism but would expand it further to ensure community engagement and empowerment.
The final Grattan Institute report, which they did not refer to, recommended community involvement as well as local and central community advisory bodies. It emphasized that regional managers should be independent regional organisations. We support this as a good beginning.
Briggs: Expresses a desire for a bottom up more regional system. We are concerned that the government departments she has in control are unlikely to relinquish control. They are likely to tie major regional offices up in a knot of processes and procedures, make them dependent and defeat the exercise.
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.
Comment on Community involvement
Our position is that aged care is a community service without an effective customer. As such it needs to be organised in and with local communities. These communities need to play a major role in deciding who will provide care for their vulnerable members. They will then watch over them to see that their members are well cared for. Government’s role is to empower, support and help them. That would help to create an effective customer.
The Grattan Institute’s Final report on aged care in Nov 2020 advised Local Advisory Community Committees with some direct involvement in oversight. If implemented communities would be in a position to engage, build capacity and play an active role in controlling the market. We supported it. There would also be a national body representing communities. Commissioner Pagone who supported an earlier Grattan report ignored this.
The Council of Elders has all the features of another process that can be managed and controlled. We have seen too much to trust this. It is an appointed body and not a representative one.
Aged Care Advisory Council: Pagone’s Aged Care Advisory Council contains some community representation but does not represent the community. Members are appointed by the minister so not representative.
Carer hubs: This is clearly desirable. The 1975 Coleman report recommended something similar but more extensive with seniors community centres where resources, services and activities were concentrated.
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.
Comment on Regulation
The regulatory conundrum: A system that requires so much regulation, so much disputation and so much steering in an attempt to control and prevent it from defrauding government and neglecting its charges is surely a system that is deeply flawed and not working. It needs to be structured to make it work and that means addressing root causes. The report does not do this adequately.
Necessary conditions: The economic insights that were abandoned in the 1980s go back 300 years. This shows that there are two necessary conditions for a market to work. The first is a knowledgeable, empowered and so effective customer. The second is an effective civil society that sets the limits of acceptable conduct.
When the customer is vulnerable then the community may need to assume both roles. The only effective alternative is a nationalised aged care system and that has problems too.
A community led market: We have advocated for a community led market system, which when fully developed would meet the necessary conditions.
Community structures supported by government would plan local services, oversee their construction, select and contract someone to act as their agent in providing services, work with and watch over them and replace those who fail to deliver with someone who did.
Success would depend on cooperation rather than competition so liberating managers and staff from the perverse pressures created within a commercial competitive free market and allow them to express their humanity.
In such a system much of the complex and ineffective regulation and oversight might be superfluous. When providers are freed from powerful perverse competitive pressures governance processes might be more effective.
Accreditation is one of the self-regulatory processes introduced in response to the failures of free markets. A potentially useful process it is no match for strong competitive pressures and has not worked in the USA or Australia. Until the industry was put in charge in 2014 the agency itself insisted that it was not a regulator.
We support continuous oversight by local community and regional management, a situation where problems are immediately identified, cooperatively investigated to detect systemic issues and immediate remedial action taken. Such a system ensures open disclosure.
This should be supplemented by objective measurement of outcomes and supported and overseen by a central regulator.
Oversight of the system: Central oversight without local support has not worked. We are not persuaded that making the Inspector General a government appointment makes it independent.
We think that a fully representative central community body drawn from local communities, advised by them and supported by academic research institutions should work independently but closely with any central inspector.
In Volume 3a Commissioner Briggs commented on “the benefits to having ‘multiple stakeholders’ in the oversight of quality” but the omission of community undermines the intent.
Probity: Prior to 1997 probity assessments by the states in health care and by the federal regulator in aged care focussed on the owners who hold the purse strings and control the providers.
Extensive evidence has shown that ownership and ownership type has been the most critical factor in the provision of good care and the Commissioners final report acknowledges this.
A decision to grant a licence to enter the sector was based on the level of control the new owner had as reflected by the financial holding (eg shares) of the entity lacking probity. One health care company was barred because of a holding of only 30%.
These probity requirements were abolished in aged care in 1997. Owners have not had to apply or be registered since then. Over the years information and objections were lodged to several companies buying into Australia with the Department of Health but they could not investigate or act. The market based approach and business practices they brought with them would have contributed to the failures in the system.
The Royal Commission’s new probity recommendations apply to providers but make no reference to the probity of their owners. Doing so would be seen as interfering with the free operation of the market and so a challenge to ideology and policy.
Home care: Because there are so few witnesses oversight is even more difficult. We think that a community organisation working with these elderly citizens, their relatives and friends, many of them also taking an interest in their community, would be far more effective. People living alone at the mercy of a carer will not complain to a feedback system. It needs to be done informally.
Complaints: In 1985 Giles advised community involvement in complaints handling. Since the Walton Review in 2008/9, Aged Care Crisis has pressed for empowered local community visitors to play a central first line role in dealing with any complaint and in promptly investigating it. After so many failed complaints systems this is surely essential now.
Advocacy too should be local and if issues identified are not addressed and ‘not translated into practice’ then clearly that provider should be replaced.
Serious incidents should also be immediately investigated by a local empowered visitor before being reported up the system.
Greater enforcement should certainly be available. That it is necessary is evidence of a system that is conflicted and not working. In the community-led system we advocate enforcement would rest lightly and strong enforcement measures should seldom be needed.
The most effective action would be for the community to replace any provider who fails to deliver with one who does and the system should be structured to allow that.
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”.
Comment on Governance
About Governance: Free market beliefs reject close oversight and strong regulation. In 1997 the market in aged care was finally ‘liberated’ from what they considered onerous and unnecessary regulations introduced in the 1980s.
Governance is an old term that has been used over the last 30 years to describe the principle method of self-regulation that has become the regulatory response to failures of the free market system.
Governance seeks to develop strategies, incentives and processes that will induce corporations to regulate themselves and behave responsibly. It tries to ‘steer’ them towards behaving responsibly’
It was strongly advised by the Royal Commission that followed the HIH and One Tel corporate collapses. It was introduced to the market by the Stock Exchange and into government by Commissioner Briggs when she was the Public Services Commissioner between 2004 and 2009.
While clearly a useful process governance is seldom backed by coercive power and has been no match for the powerful pressures created by commercial competition. It has not worked in the banks, in the VET system as well as multiple other markets including aged care. We do not believe that beating a dead horse to try to make it perform better is a good solution. We must do better than this.
Example: There is a conflict at the heart of governance and it is revealed in the Recommendations setting up required governance standards for industry. In recommendation 88 item ‘b’ it states “the constitution of an approved provider must not authorise a member of the governing body to act other than in the best interests of the provider”.
Yet throughout the rest of the report governance and governance recommendations focus on putting the interests of the recipient of care, their dignity, their interests and their care first.
If the provider and its owner are commercial operators their best interests will be the profitability of the provider and its owner. This will often be most effectively met by exploiting the weakness of others. As we have seen over the last 20 years acting in the best interests of the provider is not in the best interests of those who need costly care. Making sure that expensive care was provided to the elderly, when the provider could get away without doing so, would have breached their duty to the provider.
The perverse competitive pressures in the system ensure that the survival and prosperity of the provider will dominate other considerations. To be competitive other providers and even non-profits must conform.
The human response to this situation is to do what you must while pretending to do what you should. Wilful blindness, strategic ignorance, rationalisation and compartmentalisation are all terms used to describe the well-recognised psychological strategies used to do this without experiencing guilt.
This creates a huge regulatory problem as government tries to regulate a system that has deceived itself and has no doubts. It is blind to what is happening and indignantly insists it is doing well when it is failing those it is responsible for. That is the same system we have had for the last 23 years.
Community governance: The Report does not examine ‘community governance’ – the role that local communities can play by watching over and ensuring that the agents they have employed to care for their older members are meeting expectations
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
Comment on Practical Reforms
These are all important issues that need attention, but they come under constant pressure from perverse competitive commercial pressure in a free market system as they are seldom profitable.
Aged Care Crisis supports a reach down, mentor and support approach to the provision of health care and other services as they are delivered locally. This has a strong educational impact and builds local capacity.
Bombarding people with information is an ineffective way of educating them. It is far more effective to engage them directly in planning, setting up and managing aged care in their communities. They become receptive to information and are challenged to seek out and find out more.
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.
Comment on MyAgedCare website and care finders
Myagedcare: In our opinion a central web based data resource is useful for care finders, researchers and some families. It does not always reflect real life but is a useful adjunct.
International studies and local experience shows that most families prefer to rely on local face to face advice when making choices. To be reliable that advice should be based on actual experience and knowledge of local services.
Care finders: We support a local care finder service but consider that COTA’s model duplicates the sort of service many local community governments already provide. This should be extended and built on instead.
COTA is likely to have some difficulty working within a community-led aged care system, because it has strongly identified with the philosophy and policies underpinning the present failed aged care system. Commissioner Pagone understood the difficulties in abandoning deeply held beliefs and the cultural implications of their persistence. We have the same difficulty with COTA.
COTA has played a central role in advocating for, participating in designing, supporting and unsuccessfully reforming the present failed aged care system. It has been too influential and as an organiser, it may be more of an impediment than a help. It would be better if it did not have an organising role until a community-led system is well established, when it would be able to play a larger part.
We realise that it already supplies many important social services and these should continue to be a part of a new system. It should be welcomed and included, but not be in a position to control the development of the new system.
We support an empowered local visitors scheme in which visitors are empowered to examine records and investigate incidents. They would provide oversight of care and be involved in complaints handling and investigation of all incidents. They would assist in collecting and verifying the accuracy of data.
Well structured and organised community organisations would ensure that case finders and assessment teams have an accurate picture of what is happening in local communities and nursing homes. Regional and central regulators would have an often onsite presence to verify and collect accurate data.
Care finders, advocates and visitors would be drawn from the same communities and work together. Communities would know exactly what was happening and would be able to act on that.
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.
Comment on Staffing
Tardy and still well behind international standards: Staffing reform is the most urgent reform needed and the response unbelievably tardy when we consider the extent and urgency of the problem and the long delay in responding to this.
Data contrasting Australia’s average nursing staff care of only 2.8 hrs (168min) per resident per day with the 4.1 hrs minimum safe and 4 hrs actual average in the USA was supplied by Aged Care Crisis to the 2016 Senate Workforce Inquiry (almost five years ago), to the chair of the Aged Care Workforce Taskforce set up to address the issue in 2017, and to the Royal Commission in January 2019, two years ago. We had to wait until mid 2022, a total of six years, for any action. On average, USA residents are getting twice as much care from trained nurses and a third (about an hour) more care each day.
This will be a total of six years after this easily verifiable information should have set alarm bells ringing wildly. As we warned the Royal Commission in January 2019 the 2.8 hours fell well below levels that those advising US citizens in the USA described to be ‘dangerously low’. They refused to accept this.
The agenda of 200 minutes (3.33 hrs) average per day by mid 2022 and 215 minutes (3.58 hrs) after 3 years in mid 2024 is still well below well researched and established international safe levels of 4.1 hours. We will still be laggards.
Cultural and role conflicts: These changes are welcomed and will make a big difference. They do not however fully address the conflicts that arise when professionals driven by humanitarian motives are employed and managed by those whose primary objective are commercial.
This can result in cultural and role conflicts and even toxic cultures, which all impact on care and destroy motivation. The staffing problem will not be readily resolved and the sector would still not attract the right sort of staff while it remains industry-led and driven by commercial competition.
A Community and profession led aged care system would go a long way to address this problem.
The VET system: The Commissioners do not address the major problems in the privatised VET (Vocational Education and Training) system where most staff are now trained. They have exploited the vulnerability of students and provided substandard courses. Hundreds of degrees had to be withdrawn and students including those in aged care retrained. This too is an ideological failure.
These VET training services are poor role models for a profession whose success will depend on their adoption of professional values and motives. Training and greater exposure to good role models in geriatric units and selected aged care facilities would be desirable. The Commissioners do recommend more placements.
A reach down and support health system: We support a reach down mentor and support health service including geriatric hospitals and departments, and academically focussed residential services which would maintain oversight and support training across all sections. They would provide better role models.
Centralised expertise would provide ongoing health, allied health, nursing services, advocacy and much more, reaching down into community and residential care to provide expert opinions, mentoring, support and driving ongoing education.
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.
Comment on Structure
These are important changes but we consider that local communities should be involved in planning and oversight.
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.
Comment on suitable accommodation
In the community led system we advocate the community would be supported to design and build the sort of facilities that their members require. They would seek expert advice. Those providing the services would be contracted to provide what the community and their expert advisers consider is required. They would not need to be enticed.
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.
Comment on Data collection and research
Data collection: Quality indicators (QI) and star ratings are not without problems, particularly when they rely on self-reported data in a competitive market. QI’s were first recommended 35 years ago by Giles in her 1985 report and we are still waiting.
In June 2004 the Victorian ‘Public sector residential aged care quality of care performance indicator project report’ warned that “a punitive approach will only result in low compliance and inaccurate recording”. In a competitive market, using Quality Indicators as public indicators of standards is punitive. It impacts on profitability. Self-reporting by providers is unreliable and this allowed Quality Indicators to be extensively gamed in the USA.
As 2015 and 2016 reports indicated, this sort of data collection can encourage cherry-picking of residents and also distort care by directing attention to matters that are measured at the expense of unmeasured or difficult to measure care items, like relationship building.
Accurate data: The empowered visitors scheme that was first advised in 1989 and again over the last few years would provide oversight and assist in data collection preventing these problems. They would see what was happening and prevent unmeasured care from being neglected.
Research: Commercial operators are very sensitive to the fact that research might expose problems in their facilities. They have sometimes obstructed that research. Those who spoke out about adverse findings have been attacked and attempts made to discredit their work.
In a community-led system, the community would work with the researchers and ensure that their agents, the providers, complied. They would be interested in translating research into practice even when it did not increase profitability. They would see that providers complied.
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.
Comment on Funding
Ensuring money goes to care: The last time the industry was given a large boost in income, it was spent on competitive consolidation to build corporate empires. It was used to borrow funds to do this so increasing debt. This additional funding will have to be protected from this.
Opposition members of the senate are acutely aware of the risks that money will be diverted away from care. Their attempt to pass a Financial Transparency Bill in 2020 was voted down by the government but they are going to bring it back. The bill would require providers to disclose where the money they get is spent and so ensure that it goes where it is needed. The Royal Commissioners have not required these details. We strongly support the bill.
Casemix funding: We are aware that the similar DRG (Diagnostic Related Group) funding has been rorted on many occasions in the USA. The Grattan institute has recommended that funding be based on care plans at the time that care plans are made or revised. We do not have the experience to comment.
Block funding: We agree that funding requirements for residents and for each region should be based on need, but prefer the provision of fully accounted for locally managed block funding because of the flexibility it provides.
While funding based on need is ideal, in the real world, there are often delays, societal crises and other priorities that limit funding for care and services. Block funding managed by local communities allows available money to be prioritised flexibly, and enables the community to respond and exert pressure on government when funding is insufficient and care is compromised.
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”.
Comment on Competition
The approach revealed here shows that the system is still conceptualized as a free market driven by self-interest in providing services.
It is not seen as a community service driven by community and professional altruistic values to which the market contributes.
Our preference: However the funding is assessed and raised, our preference is for fully accountable block funding for care. This is precisely because it allows cross subsidisation and so flexible local management. This should be protected from profit taking,
It is not possible to accurately specify every care eventuality and what is proposed reduces flexibility. People fall through the cracks as has been happening in residential and home care with the current funding system. (eg. physiotherapy).
The system needs to be managed locally precisely because it allows this flexibility and attention to individual need,
In a community-led aged care system, perverse incentives exploiting cross-subsidisation would be largely eliminated. Providers would (unlike the 1990s) be rewarded by paying them a suitable fee for managing this care. Those who attempted to manipulate the system would be replaced. Those who provided good services would prosper.
A market-led system dependant on competitive commercial pressures creates ongoing problems in a vulnerable sector like this.
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.
Comment on an aged care levy
Generational inequity: That there would be a growing number of seniors who would need care at the same time as the number of working young paying for the previous generation's care declined has been obvious for years. This developing generational inequity was recognised by economist Bob Gregory in the early 1990s. He recommended a hypothecated contribution added to superannuation contributions so that each generation paid for its own care.
This was ideologically unpalatable to both Prime ministers Keating and Howard and the opportunity was lost.
Pagone's prposal compounds the problem by making the current generation of workers pay twice - once for the previous generation, then for themselves. Briggs does not address it.
Our proposal: In its submission Aged Care Crisis supported Gregory’s original proposal (similar to Pagone’s) for a hypothecated levy linked to superannuation.
It proposed addressing the large generational inequity problem that now exists equitably by introducing a temporary estate tax gradually reducing it over a 20 year period.
The present generation would pay for its own care but that payment would be reduced for subsequent generations as the hypothecated funds increased. This seemed the fairest way of undoing the harm done by Keating and Howard’s failure to act on the evidence.
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.
Comment on blame
While Commissioner Pagone is correct his explanation was a gross oversimplification. What the government did in 1997 and subsequently was based on advice from credible international and local industry corporate leaders who were advising on policy.
Government was told that too much money was unnecessarily being spent on care and they tried to stop this. Industry have been close advisers to government ever since. They are as culpable.
Background: In the USA in the 1990s there was a crack-down on fraud and misconduct with increased regulation first in health and then in aged care. This stimulated a strong interest in global expansion to countries where there was less regulation.
‘Expert’ advisers on international expansion indicated that success lay in ‘playing on politician’s pain’, which in most cases was the cost to government.
A very successful US Aged Care Company Sun Healthcare was welcomed into Australia in 1997. Its charismatic founder and ‘credible’ chairman’s message was that there was plenty of fat in the system and that you did not need expensive highly trained nurses in the sector. Government should butt out and the market would soon fix this costly system.
This was strongly supported by industry and their leader, Doug Moran, even claimed that the 1997 legislation enshrining rationing was his.
The self-serving myth that aged care is not a disease and that nursing homes were not hospitals so you did not need the expensive trained nurses has given credence to these policies.
Companies like Ansell Strategic who advise aged care businesses, other prominent leaders and even board members of Leading Aged Care Services (LASA) have perpetuated this misinformation. Ansell Strategic even made this claim to the Royal Commission.
The senate inquiry into regulatory failure after Oakden October 2018 clearly identified this myth as a central problem but nothing was done to address it.
The government was being advised by an industry that was ‘playing on their pain’ that they were paying too much for care and they responded accordingly.
Briggs is also correct in that perverse competitive financial pressures in the system dominated and the myth about ageing not being a disease provided a useful justification for turning a blind eye to knowledge and doing what competition required. The evidence was clearly there if the industry had looked. It is another example of belief being defended from challenge by wilful blindness and strategic ignorance.
Understanding this: In the 18th century Adam Smith explained that it was good people who did the most harm in the world – people who believed. Their gut response is to deny and ours is to blame. But while we need to hold them responsible, we should all try to understand how and why people who believe behave like this. We should build social systems that insulate us against irrational belief, recognise it when it occurs and respond promptly when it does. That is what Aged Care Crisis is pressing for.