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New funding model proposed for aged care a ‘game changer’

The government has praised a new funding model proposed for residential aged care.

Called the Australian National Aged Care Classification system (AN-ACC), its authors say it explicitly focuses on improving quality of care, rather than paying providers.

Professor Kathy Eagar, director of the Australian Health Services Research Institute at the University of Wollongong (UOW), said the model zeroes in on improvements in care and rids the “perverse quality incentives of the current model”.

Under AN-ACC, homes would not be able to select residents based on their payment class.

“If the AN-ACC class assessment is undertaken prior to entry, the facility is not advised of the resident’s payment class until after the person is in care,” but would still get Aged Care
Assessment Team (ACAT) and referral information, the UOW team wrote.

The government has been examining options for a new funding tool and system to replace the Aged Care Funding Instrument (ACFI) since 2017.

Minister for Aged Care Ken Wyatt called the proposed funding model “new and improved”, saying he was “very excited” by the results of the study.

He said: “The university’s comprehensive research could be a game changer for aged care because the proposed new system is a completely different way of allocating funding for residential aged care.

“The proposal includes the removal of identified flaws in the ACFI, including the complex and time-consuming assessment process as well as eliminating incentives not always found to be in the best interests of consumers.”

The UOW team, which was commissioned by the government, said consumers, providers and the government will, for the first time, be able to make meaningful judgements about the quality and outcomes of residential aged care and fairly compare the quality of care provided at different facilities.

“This is the ultimate measure by which the aged care sector should be judged,” they wrote.

The government last week held a stakeholder reference group to look over the model and it heard strong endorsement of its ideas.

Eagar said the key message from the sector at that meeting was that they want to move on a replacement now.

The funding model is based on six key design elements:

  1. Resident assessment for funding to be separate from resident assessment for care planning purposes
  2. Assessment for funding purposes to be undertaken by external assessors capturing the information necessary to assign a resident to a payment class
  3. Assessment related to care planning to be undertaken by the residential aged care facility based on resident needs and underpinned by consumer directed care principles
  4. Provision of a one-off adjustment payment for each new resident that recognises additional, but time-limited, resource requirements when someone initially enters residential care
  5. A fixed price per day for the costs of care that are shared equally by all residents. This may vary by location and other factors, and
  6. A variable price per day for the costs of individualised care for each resident based on their AN-ACC casemix class.

AN-ACC is made up of a fixed payment for shared costs, a variable payment for individual resident costs and an adjustment payment for entry costs.

An attached discussion paper from the Department of Health read: “Under the AN-ACC the subsidy paid to the provider would consist of a fixed component and a variable component for each resident. Providers would also be paid an adjustment payment on a time-limited basis when a new resident enters the facility.

“The staff time data collected in the RUCS indicated that close to 50 per cent of staff time was spent delivering care tailored to the specific needs of the resident, while the remaining 50 per cent was spent delivering shared care across all residents. This supports a payment model that includes a fixed per diem price for the costs of shared care and a variable price per day for the costs of individual resident care.”

Eagar said the UOW team’s key message to the government was that the model should be adopted as a package of reform and not seen as a smorgasbord to pick and choose from.

Wyatt said both the aged care sector and the government still have a lot of hard work to do before the AN-ACC can be implemented.

But, he added: “There is no doubt in my mind that implementing the AN-ACC would better identify the needs of individuals in residential aged care and better allocate resources to meet their needs.”

The Government said it is now seeking sector and community feedback to help inform decisions around funding reform and the design elements of the proposed new funding model. Consultation is open until 31 May 2019.

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One comment

  1. Is this the new ACFI model that is currently being trialed at a cost of $4.2 million dollar or is it something else that will cost more money to trial and implement???