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Rudd’s aged care reforms revealed

Mixed reaction from providers and peak bodies to government announcement.

The wait is over.

The federal government has announced its long-awaited plans for improving aged care, as part of its wider hospitals and health care reform agenda.

Prime Minister Kevin Rudd today said the government will spend $739 million on aged care, supporting 5000 new places.

Under the plan, the federal government will take full responsibility for aged care – including home and community care (HACC) – from July 2012.

Some 2500 new places are to be created through $143 million in zero real interest loans, while the government will provide $120 million to multi-purpose services, which provide aged care and step-down services in small rural communities, to create 296 new sub-acute beds.

The government will release more land for the sector by identifying aged care as a priority in state planning systems. Relaxed approval requirements also intend to fast track development of new facilities.

The government will provide $280 million to the states and territories to fund 2000 flexible places for older Australians currently stuck in public hospitals.

GP services to aged care will be bolstered through $96 million over four years, expected to support 105,000 additional services.

$10 million will be provided to improve the viability of community care services in rural and remote areas, while some 1200 consumer directed care packages will be made available.

With a focus on improving the consumer focus of aged care, the government said it will spend $32 million creating ‘one stop shops’ across Australia to help older Australians more easily access information and assessment for services.

$25 million will be spent better equipping the Aged Care Complaints Investigation Scheme to improve complaints handling and mediation and strengthening the regulation of provides who hold accommodation bonds.

Mixed reaction to the plan

Responding to the announcement, the Campaign for the Care of Older Australians welcomed the federal government’s plan to assume control of HACC.

“A single streamlined service to support older Australians at home, in their own communities, is a critical step in the reform of aged care,” said the group, which comprises 11 national organisations providing community and residential aged care and housing.

The group also welcomed the announcement of more aged care places, the increased funding to bolster GP services for older people and the attempts to improve transition care for seniors leaving hospital.

Elsewhere, Aged Care Association Australia WA CEO Anne-Marie Archer said there were many good initiatives in the announcement.

Proposals such as the acceleration of planning approval processes, the one-stop-shop for consumers and additional funding to support GPs visiting aged care facilities are all to be welcomed.

“The zero real interest loans may be of assistance. However, as we need 17,000 beds in the next two years the $300 million will not go far. Given it costs approximately $200,000 per bed to build it will only equate to loans for 1500 beds for the whole country. We need more beds than that in WA alone just for this year.”

Catholic Health Australia (CHA) welcomed the plans to simplify access to aged care.

However, CEO Martin Laverty cautioned that without fundamental regulatory reform there will be a growing shortfall in the number of beds available.

“Even with new beds, the underlying issues that prevent aged care operators from growing remain in place,” said Laverty.

“Zero-interest loans are not the solution: unless there is fundamental regulatory reform, any new facilities built with those loans will start losing money the minute the new bed is occupied by a resident.”

Rod Young, CEO of the Aged Care Association of Australia, welcomed the increased federal responsibility but said the investment in capital funding did not adequately address the sector’s supply needs.

“We welcome the zero real interest loan money, but it is unlikely to address the real capital needs of the industry. We estimate that to avoid a supply crisis the sector needs a $21 billion investment over the next 10 to 12 years in building stock.

Young expressed support for the greater incentives to attract GPs but said the investment should be extended to nurse practitioners and to improved technology use between health professionals.

Rudd’s announcement today followed growing calls from state premiers for the federal government to include aged care in its health reforms.

In an ABC radio interview this morning, Minister for Ageing Justine Elliot could not be drawn on whether the aged care reforms announced today were conditional on COAG agreeing to Rudd’s national health funding plan.

COAG will decide on the plans at its meeting next Monday.

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