University of Wollongong report suggests structural changes to funding model.
The Federal Minister for Aged Care, Ken Wyatt, released a report into the alternative approaches to aged care funding yesterday, two months after it was originally delivered.
The report, prepared by the Australian Health Services Research Institute at the University of Wollongong, outlines five suggestions for improving the Aged Care Funding Instrument (ACFI), which it states is “no longer fit for purpose”.
The report states that the current model doesn’t adequately categorise residents based on their care needs, with one third of all residents classified to just one ACFI payment class, with 63 classes rarely claimed.
One of the suggested options includes adopting the four funding levels currently in place for home care packages, but with pricing reflecting the higher cost of residential care. Another option suggests implementing an activity-based funding system similar to that used in hospitals.
A further option includes refining the current ACFI system, with ongoing monitoring to avoid cost blow-outs.
Mr Wyatt said the Government currently contributes $17.5 billion a year towards aged care, and that this figure was set to grow to just under $21 billion by 2020.
“It’s important that we review the way we fund aged care to ensure we create an aged care system that is affordable, sustainable, flexible and responsive to consumers,” Mr Wyatt said.
“In 2015–16, more than 1.3 million older people received some form of aged care and with more Australians living longer and healthier lives, those numbers will increase.
“To meet the level of demand for aged care services now and into the future the Australian Government needs to make sure its funding gives the best possible value for money.”
A separate review of the current Aged Care Funding Instrument is also being undertaken by Applied Aged Care Solutions.
“That review will focus on options to improve the current tool to make it less subjective, including the feasibility of external assessment,” Minister Wyatt said.
“These two separate but important pieces of work will help inform the Government’s deliberations over the future direction for funding reform.
“The aged care sector will continue to play a key role in this reform and there will be further consultation with the sector before any decisions are made on funding options.”
Read the full report.