The much lauded handover of home and community care services to the Commonwealth appears to have stalled. Where did it all go wrong? And what does it mean for the reform agenda?

Many are reading it as an ominous sign for the more ambitious health reforms. The government has put the transfer of home and community care services (HACC) from states and territories to the Commonwealth – announced in August 2008 – into the too hard basket.

It appeared to be a done deal at the Council of Australian Governments (COAG) meeting on 2 October 2008, (INsite, October/November 2008). The states would hand over community aged care funding responsibilities (primarily HACC) in return for accepting responsibility for disability and community-based mental services from the Commonwealth.

Sadly, there has been nothing but deafening silence from all sides ever since.

Details were to have been finalised at an officers’ meeting in December 2008 to ensure the handover became operational from 1 July 2009. However, the official line from Minister for Health and Ageing Nicola Roxon now is that: “Reforms to Commonwealth and state-territory roles and responsibilities in aged care and mental health are being considered by the government as part of the broader health reform process and will be discussed with states and territories through COAG in due course.”

So what went wrong?

When the plan was announced it was assumed that state treasuries had agreed to the transfer, believing that the costs of disability and mental health did not have the growth and cost potential as that of an ageing population. It was promoted as a cost - neutral transfer.

Aged care groups were concerned at the capacity of the Commonwealth to actually administer the multiplicity of HACC’s varied service programs, and that fragmentation or duplication may occur.

Many will remember that duplication and paperwork, especially for federal funded programs, had already been the focus of debate and planned reform under ‘The way forward’ review of community care. Ironically, this review also seems to have fallen into the too hard basket.

Nonetheless, all seemed well until the Victorian HACC services and policy-makers, including the powerful local government lobby – itself part of the COAG process as the third tier of government – considered the implications of their historically higher rate of HACC funding and the role of local government as providers and funders.

How would this be recognised under the transfer? Would Victoria receive a higher compensation for state and local government extra funding over and above the 60/40 funding ratio, or would other states benefit at the same rate even though they had provided a lower rate of care? Why should they ride on Victoria’s coat tails or why should Victoria be penalised for being better?

And how would local government be reimbursed for their services and funding?

The Municipal Association of Victoria conducted a media campaign about their concerns, accusing the Federal Government of attempting to “hack up” elderly care. State officials also had second thoughts about the transfer. In Victoria there is a close relationship between aged services and the acute sector – in physical service delivery, liaison over transition, rehabilitation and convalescent services, as well as with the primary sector. The breaking down of silos between primary, acute and aged care was well underway. Aged care had stayed with health and primary care when the human services department was split.

These concerns were enough for the COAG meeting on 2 October to establish a “working group to propose future roles and responsibilities for aged care”. This has gone the way of many such working groups – into the ether of inaction, and well away from the front page of the general media.

Which brings us back to the present. HACC now awaits the outcome of the “broader health reform process” and “in due course” COAG will make a decision.

Unsurprisingly, industry leaders and providers aren’t impressed.

“It is disappointing the momentum for reform in community care seems to have stalled,” says Paul Sadler, CEO, Presbyterian Aged Care NSW and ACT. “While I can understand, and to an extent share, the concerns of individual states and providers looking to care for people at the margins of the aged care and disability systems, it really is time for putting aside parochial interests and coming up with a streamlined national community care system.

“To cut a deal, Canberra must recognise a single, one-size-fits-all model is not what’s needed. A national community care system must not be inflexible and unresponsive to regional differences.

Equally, the states and local government must not stand in the way of reform out of pigheadedness,” Sadler says.

“Our health and aged care structures are bedevilled by the historical compromises of our federated system,” says Ian Hardy, CEO, Helping Hand. “There is no greater urgency in public policy in Australia than to rationalise the dysfunctional relationships between these vital services – the human and financial costs can no longer be ignored.

“The present disconnect between HACC and Commonwealth policies results in such absurdities as a woman in Adelaide’s northern suburbs no longer being permitted to use the local council’s HACC-funded bus to go to her Senior Citizens’ Club – because she became a client of a CACP service,” Hardy says.

“It is high time governments demonstrated the courage it takes to act in the best interests of service users rather than on what works best for government departments,” says Gillian McFee, director, UnitingCare Ageing NSW and ACT.

“Consumers in aged care constantly say their biggest challenge in getting access to services is navigating their way through the myriad of services provided by so many different organisations. Having one level of government responsible will overcome this problem and it will also enable greater flexibility and innovation around using the funds available to achieve better outcomes,” McFee says.

Greg Mundy, CEO, ACSA, says 2010 will be the year to test the government’s determination to reform aged care.

“If the streamlining of community care has simply been delayed pending the resolution of related issues in the broader health sector, that’s something we could live with – it makes sense to consider related services together. However, if it signifies the government will shy away from needed reform that would be a concern. When ACSA has discussed such concerns with the government they have been adamant that their resolve will not falter. This year will provide the test of that resolve,” Mundy says.

 “The industry unanimously endorsed the proposed rationalisation of the HACC program and the reorganisation of services into unique commonwealth and state-territory responsibilities,” says Rod Young, CEO ACAA.  

“It appeared like an eminently sensible solution to the current program fragmentation and service delivery silos that tends to hinder a continuum of care and service model within the current settings. 

“In the current scheme, providers are attempting to align service offerings in such a way that will ensure that the client becomes the focus of the service offering. This objective, which is highly laudable, becomes extremely difficult for many providers to achieve where various funding streams, funding accountabilities and co-contribution arrangements apply to clients depending upon the setting from which they are receiving service,” Young says.

However, not everyone is unhappy with the delay.

“Aged care and HACC providers welcome the caution through the delay. It is more appropriate that the recommendation of a transfer is considered within the broader policy debate raised by the recommendations in the NHHRC report,” says Jill Pretty, CEO, ACS NSW and ACT.

“There was a mixed reaction to the COAG suggestion. The benefits were that it would improve the continuum of care for older people and for providers it would allow a seamless transition between all levels of services. Concerns were raised about the simplistic view that all older people 65 plus would be funded by the Commonwealth and those people 64 years and under would be funded by the state. Older people, their health and aged care needs are not defined by age. For some providers it would add another level of complexity as most HACC providers operate services across an age spectrum so it would increase the reporting requirements of these providers as they would be receiving funds from both levels of government,” Pretty says.  

Meanwhile, we are left to wonder. If the government can seemingly go to water so easily on what appeared to be a cost neutral, win-win simple transfer of program responsibilities and funding between it and the states, then how will it cope with big health reform decisions affecting many more Australians?

And all this in an election year.