Home | News | ‘Financial viability is a means to an end in aged care; it is not an end in itself’: Royal commission

‘Financial viability is a means to an end in aged care; it is not an end in itself’: Royal commission

The royal commission finished its Hobart hearing with some ideas as to how better governance can go some way to fixing the poor practices currently seen across the sector.

In his concluding remarks counsel assisting Peter Rozen alluded to the two case studies heard in the week, and the tales of staff and cost cutting, when he said that: “It must be remembered that financial viability is a means to an end in aged care; it is not an end in itself.”

There have been serious deficiencies in care caused by “insufficient care time, deficient organisational culture, insufficient attention to quality and safe clinical care, poor communications from facilities and a lack of responsiveness to complaints,” he said.

He outlined four themes from the week that need attention. First, providing quality care should be the core of any aged care business.

“Financial viability must be a central consideration of proper business management in both profit and not-for-profit entities,” Rozen said. But evidence heard throughout the week has raised serious questions as to whether the right balance is being struck between safety and care, and making profit.

The commission raised the idea of introducing statutory duties for those responsible for governing aged care providers to inform themselves as of quality of care. They also said that boards should be under a duty of care and duty to inform themselves of “quality of care issues”, as is the case when it comes to a duty of care related to staff under OHS laws.

The second theme pertains to the organisational structure of governance as well as clinical governance.

The commission stressed the importance of boards and execs when it comes to setting “the priorities of an organisation noting that good governance requires transparency, accountability, stewardship, integrity and risk management”.

Witnesses told the commission that the findings of the banking royal commission should be a guideline for how the sector can approach good practice in the future. An ethical framework was suggested by that commission in the final report. It said: “Obey the law, do not mislead or deceive, be fair, provide services that are fit for purpose, deliver services with reasonable care and skill, and when acting for another, act in the best interests of that other.”

Thirdly, the commission discussed how organisational culture can be improved. Increased accountability and more engagement from management is key, as lack of oversight can lead to poor organisational culture. Someone who works in aged care at any level needs to visit aged care homes regularly, Rozen said, and quoted a witness who said: “A leader who sits behind a desk trying to lead a care home from there will inevitably have a culture that isn’t accountable out on the floor.”

Finally, Rozen asked how a funding environment can be created that does not draw resources away from direct care.

The ACFI funding model was identified as a key reason for poor care in the case studies of the week. But Rozen did concede that “changes that were made at both Bupa and Southern Cross Care Tasmania were driven by legitimate financial concerns and centred on maximising income and reducing costs”.

Further attention will be paid to the funding models of in aged care as the royal commission goes into 2020, he said.

The next leg of the royal commission starts December 9 in Canberra.

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One comment

  1. I think the Royal Commission and a good portion of the public are missing the point… deliberately perhaps, but what is going on in residential care is not about profit.
    The I’ll advised still want to think that profits are actually being made and there has been plenty of long overdue attention to this of late.
    What is happening is not getting enough funding to pay the bills!
    The government has been slashing funding for years, they have the carrot and the stick. Staff costs traditionally are about 66% of total funding but with the cuts it’s closer to 90%!!
    Doesn’t leave even enough to pay the basics, so thank you liberals. This is on your head.

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