Catholic Health warns on quality of aged care

Sydney
8 June 2003

Catholic Health warns on quality of aged care

By Chris Lindsay

The rising costs of nursing homes and hostels for the aged mean the quality of care will inevitably suffer unless there is an accurate indexation method for calculating increases to the Commonwealth subsidy, says the chief executive officer of Catholic Health Australia Francis Sullivan.

And people need to be encouraged and supported to save for their aged care in a world of user pays and private insurance

This is the case Mr Sullivan will present this month in Catholic Health Australia’s eagerly awaited submission to the House of Representatives Committee on Ageing.

The Catholic Church is the biggest non-government provider of aged care services in Australia.

“Our submission has been keenly sought after and the Government wants to talk to us about it,” Mr Sullivan said.

“The problem with the current aged care funding situation is that it is not calculated on real costs, but just on a ‘guesstimate’.

“With the Consumer Price index at over three per cent, health inflation close to six per cent and wage increases projected to be more than 10 per cent, the Commonwealth subsidy has only grown by just on two per cent,” he said.

“So, over time, the real costs outstrip the subsidies and the gap keeps widening.

“At the end a ‘squeeze’ on the quality of care is inevitable.

“The two problems following from this are that the nursing homes and hostels find it hard to make ends meet and the community expectation of quality of care is not met by political reality.

“Then it is all too easy for the ‘bad news’ about the quality of care to be revealed - the kerosene baths and the ill people not receiving medical care - and everyone is tarred with the same brush.

“I am pleased to say that so far no Catholic nursing home or hostel has been sanctioned over inadequate care, but Catholic Health Australia is warning in its submission that there are problems ahead if these facilities cannot meet their costs.

“What we need is an accurate formula for establishing the subsidy levels that reflects the reality of the situation.”

Mr Sullivan says that currently there is a daily subsidy from the Commonwealth based on an assessment of what the care needs are for the individual.

This subsidy goes to the nursing home or hostel.

Also, subject to a means test, the individual pays a daily fee.

As well, again subject to a means test, the individual pays an up front fee of, say, $200,000. The nursing home gets to keep $5000 a year of this, plus the interest on the capital.

The remainder returns to the individual or to his or her estate when the person leaves the nursing home (perhaps to go to hospital) or dies.

If the individual does not have the $200,000 (which is subject to an assets test that does not include the family home), the Government pays about $13 a day to the nursing home to offset this.

(This arrangement came about over controversy in the late 1990s that people would have to sell their homes to go into aged accommodation.)

Mr Sullivan says the second major problem facing the aged care area is that of encouraging and supporting people to save for their aged care in the future.

“There needs to be some sort of savings vehicle where people can save specifically for their health and aged care needs,” he said.

“This Government is moving strongly towards user pays and private insurance in the health area, and if they are going to go in that direction it is incumbent on them to give people a mechanism to save for these costs.

“Some kind of tax break will need to be introduced. There are many models that have been suggested and we look forward to discussing them with the Government, but however it is done the money will need to be quarantined for these health care needs.”