The future shock of aged care

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'Aged care' by Chris JohnstonThose younger than the Baby Boomer generation may have missed the release of a Productivity Commission aged care report. Pre-Baby Boomers may wrongly have thought it doesn't impact them.

Anyone who has had to find an aged care home for a loved one will tell you the system is a maze. It's hard to access, and hard to find a way through. It's not able to give everyone what they want.

The reason younger people should worry is that if they have family members, chances are they'll take a crash course in aged care navigation if, without warning, a family member needs care urgently.

Younger people should also know if we don't fix aged care today, the system they'll encounter when they get older may not be sufficient. They'll also be funding it in their working lives through higher taxes if we don't change the current financing system.

The last two years have been unique in aged care. Consumers, providers, and groupings of staff who work in aged care have been mostly unified in arguing what reform should involve. Most agree aged care should be provided to all older people who are assessed as being in need.

Most agree the aged care system should be easy to navigate, and give older people and their families genuine choice of service types. Also, that funding should meet the actual cost of services provided, to ensure that staff are better paid, and that quality standards are met.

These united calls for reform jump out from the 482 submissions the Productivity Commission.

The aged care community has not always been united. The Howard Government reforms in 1997 ensured that bonds are the prism through which many of our current elected representatives and senior journalists approach aged care matters.

Bonds, which are refundable deposits that are returned to a family when aged care accommodation is no longer needed, enable residential aged care services to have capital to build aged care homes.

Bonds have worked well in low care services for the last 13 years. Yet in response to the Commission report some have questioned, and many journalists have rehashed, misunderstandings about bonds; mainly, that the proposals might result in the forced sale of family homes to fund high care bonds.

The Commission has in fact put forward a method that will put an end to the forced sale of a person's family home to fund an aged care bond, through a number of options such as a government-backed equity access scheme. But you'll not have seen too much detail about this in the media. Discussion of equity access options hardly deliver engaging newspaper headlines.

In any case, the issue is not bonds themselves, but a bigger question of 'Who pays?'.

The Commission approaches this sensitive topic by separating aged care into its different types of costs: accommodation, daily living expenses, and attended care and nursing support. 

During a person's life, accommodation is self-funded. Governments support social housing for those unable to self-fund. This principle — self-funding, underpinned by a social safety net for those who are unable to self-fund — should apply in aged care as well. 

Daily living expenses are also something we typically self-fund, be it through income or superannuation, or through welfare or aged pensions. Again, entering aged care should not alter the way in which an individual pays for normal living costs.

Care is different. All Australians have public hospital access; additional private coverage is available to those who are able to pay for it. Similarly, aged care should be provided on an entitlement basis: all should have universal access, while those who can afford to make a contribution shall do so.

The Commission suggests the contribution, even for the most wealthy, should be capped at 25 per cent of the cost of care. It's hard to argue against the Commission's logic.

We need to come to terms with the fact that in order to have a sustainable aged care system to meet the demands of a retiring Baby Boomer population, those with capacity to contribute to the total cost of their aged care will have no choice but to do so. Government will similarly need to guarantee a robust safety net for those not able to meet the cost of their care.


Martin LavertyMartin Laverty is the CEO of Catholic Health Australia, a network of aged care services caring for one in ten of all older people in care.

Topic tags: martin laverty, aged care, productivity commission, bonds, pensioner

 

 

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Existing comments

As a Gen-Xer, I am all too aware of the implications of the ageing Baby Boomer population. At every turn, public policy has advantaged this dominant group. I am resigned to expect no different when it comes to aged care.

I feel a little frustrated that it has taken Boomers reaching retirement age to have a conversation about the future of services for people who need care - and frustrated that the expectations for the care of older people are so high when the expectations regarding care for people with disabilities is constantly put in the 'too hard' basket.

Unfortuantley, the difficulties facing care of ageing Boomers are likely to continue to take the oxygen of other unmet care needs.
Still, I hope that any discussion of attended care and nursing requirements are conducted with regard to all Australians who need supported care.

MBG | 07 February 2011


While we continue to live beyond our means and believe what the advertisers tell us that what we want is what we need we will become greedier rather than more sharing.

Ray O'Donoghue | 07 February 2011


The back-down of the Howard government in 1997 was a victory for middle-class welfare, which unfortunately Martin`s organisation supported. It was the `entitled` children of the resonably well-off (generation Xs?)with capital locked into the `family house` that made then back down , leading to a decade of financial pressure on the system.Gen X wanted their parents` money , thank you very much, and the taxpayer was left to pay the bill for those with the money easily to do so. That is not fair , or equitable, and is unsustainable.

It is about time we all grew up,and get real! The government should be providing a sefety-net for the truely poor, but should `buy in ` at a level of radical equality...we should not let aged care follow the deplorable two-tier systems in Health or Education, with Governemnt scandalously heavily subsidising middle-class advantage....the grossly hypocritical `Aussie way`?!
Eugene | 07 February 2011


It is clear that the current system will not provide a dignified end to the lives of many people. There seems to be an endless source of funds to provide for gold passes for ex politicians and countless number of seminars for public servants etc. There is never enough money available for important issues such as better care for our older people.

One of the best examples where the current system is worse then sheer stupidity is the “stamp duty rip-off”.

The high cost of selling and buying a home makes it very hard for young families to find an affordable home. It makes it also very difficult for older people to “down size” to a more suitable smaller dwelling.
It seems to be far easier to Governments to blame banks and to find new taxes instead of removing stamp duties. The removal of stamp duties would be a good incentive for older people to sell their large homes and provide younger people with more affordable housing.

The issue of poverty in old age is mainly due to an excessive high cost for housing in Australia. Whilst young, virtually all the savings have to be used to finance housing or to pay for rental. In Australia most people can only seriously save for their old age when their mortgages are paid off and when their own children are grown up.If the Government would be brave enough to reform the housing industry, it would solve the age care crises to a great extent.

Beat Odermatt | 07 February 2011


Well said, Martin
Clair | 08 February 2011


If the aged care sector is constantly running in the red. Why are nursing homes so expensive to purchase? There has to be a profit margin somewhere!

In my experience as a DON its made through reduced care to those most in need of care. I have observed the infiltration of developers into the aged care sector. Could be they smell easy dollars?


marcel campbell | 11 February 2011


I agree Marcel. Doubtless there is a lot of money in aged care. Having done health economics at uni, in my opinion, aged care institutions, low care, high care whatever ( I was a theatre sister moons ago ) should operate like the acute care sector: government owned and managed, or, privately. Too much wealth made in aged care here. I mean, some residents don't even get fed adequately. And certainly not staffed sufficiently either. Disgusting.
Lynne

Lynne | 12 February 2011


We are living in an overly complicated "kid's world". We have a Government that gives EVERYTHING to kids to equip them for a perfect social life through policies that would make both Adolf Hitler and Jo Stalin smile. Yet as soon as kids leave high school they are are given the proverbial "boot". They are told by both sides of politics that from that time forward they are a burden on society. And it seems the older, frailer, sicker, and poorer we become, the more of a "parasite" we are deemed in the eyes of our Government. Hitler blamed Germany's woes on Jews, gypsies and nefarious foreigners while upholding the new generation of Germans as pure and sacred. Now our Government has chosen to blame the elderly for all our woes, while conveniently forgetting their immense contribution..We are living in extremely nasty and fascist times, but surprisingly this appears to be the kind of world that Gen X/Y wants... or are they too self-absorbed and brainwashed to care?. They too will be old or infirm one day. Perhaps only then will they come to realize the truth about what is really ailing this country. But will it be too late?
Ian | 25 January 2015


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