“No easy options”: Whiddon chief responds to taskforce report

Last week, the long-awaited Aged Care Taskforce report was released, with recommendations including a wealth-based funding approach to ensure financial longevity in the sector.

A total of $23.6bn was spent on aged care in 2020-21, which increased to $24.8bn in 2021-22 and $27.1bn in 2022-23.

With the older population expected to triple in the next 40 years, aged care expenditure is expected to reach $42bn.

Currently, the federal government funds 75 per cent of residential aged care and 95 per cent of home care, which the taskforce report characterising as "not an optimal or fair mix".

However, there is still work to do – with Whiddon's chief Chris Mamarelis signalling that regional Australia may be left behind.

"While we welcome a review of the current framework, the block funding referenced in the report is not something that has flowed through equitably to all services," Mr Mamarelis said.

Aged Care Insite spoke with Mr Mamarelis about the taskforce report, and what it means for providers like Whiddon.

Aged Care Insite: What are your thoughts on the report, and were there any recommendations you were surprised by or surprised they didn't cover?

Chris Mamarelis: Essentially, we have had a diverse range of quality stakeholders on this Taskforce, and they have delivered a suite of solid recommendations aimed at creating a sustainable sector once and for all. At the heart of this were two critical options; increase taxes or ask wealthier care recipients to make a greater contribution.

The taskforce chose the latter, and while this is a difficult decision to make, one of these choices was necessary to ensure aged care grows and evolves at a standard our elders and communities deserve. 

From our perspective as a not-for-profit provider, with a strong commitment to regional Australia, there is still work to do.

While we welcome a review of the current framework that governs the funding of regional aged care services, the block funding referenced in the report is not something that has flowed through equitably to all services, and the capital grants program must be expanded to support the growth of our services in these regions.

Do you think these recommendations will work for the future of aged care? Especially as older people right now are wealthier than previous and future generations.

Demand projections are growing disproportionately to funding, hence the dire financial profile of the sector today. With data now indicating that Australians over the age of 80 will triple in the next 40 years, alongside an additional 44,000 people accessing home care annually, an intervention was long overdue.

If implemented in full, these task force recommendations act as the circuit breaker, [they're] the intervention that’s required. With this said, there is obviously a level of detail still required to fully understand the impact of the recommendations. We must also understand the federal government’s position as well. 

There was never going to be a popular decision on funding, whether that be increased taxes or additional co-contributions. However, what’s important is that we don’t lose sight of the fact that this has to be about providing the best possible aged care services for our elders and communities long into the future.

Essentially, this is what these recommendations are aimed at achieving. If implemented in full, it will allow the sector to achieve these goals. 

A Medicare-style levy has been rejected despite experts and the Royal Commission recommending it. What do you think of this decision?

There is no easy option when it comes to funding aged care and there are basically only two levers that can be pulled – increase taxes and levies or additional consumer payments.

Given the cost-of-living challenges we are experiencing, it’s understandable that the Government is reluctant to impact the entire populace when it comes to funding aged care.

With this said, the means test formula, that will eventually determine who is “wealthy” enough to make additional contributions, will be the real test.

A balance needs to be achieved that draws a reasonable contribution from people with adequate wealth, while ensuring a safety net for [the] almost half of Australians [in aged care] who currently access aged care using their pension alone. 

The Taskforce instead says the government should fund the care itself, but those with financial means should pay for their own basic living and accommodation costs. Could this create a sort of class division or problems in aged care homes?

Currently, around 50 per cent of residents are non-supported – they do not receive support from the government – and are already making contributions towards their aged care.

This same group of people have had to make significant contributions through RAD [refundable accommodation deposit] or DAP [daily accommodation payments], so the foundations are already there.

Given the way aged care is funded, the distinction between care funding, daily living, and accommodation, its logical that the Task Force chose to expand on these pillars. However, the devil will be in the detail, we haven’t seen class divisions within the current funding parameters, and I don’t believe this will occur in the future. 

Care is separated from services such as personal care, which has been deemed 'middle tier' so would attract some co-payment. These services are often necessary to maintain independence, so do you believe it is fair to be charging residents this?

This is a challenging middle ground, and obviously, a level of compromise is required to find a balance within the funding model. As such you can understand why these services have been tiered with a view to applying varying funding methodologies.

With this said, the details will be critical.

It is imperative that care recipients remain incentivised and encouraged to participate in services that maintain their independence as we know that if this is neglected then, ultimately, their wellbeing and general health can be compromised. As such, a great deal of care is required when finalising this particular recommendation. 

Abuse and neglect are unfortunately prevalent in aged care. How will these new recommendations, specifically, with the user-pays system, affect this?

Aged care has been under the microscope for many years, and while there have been shortfalls, l would disagree that abuse and neglect are prevalent in aged care. What we are seeing is a system that is working hard to address these failures and provide the quality care our elders deserve. 

For every shortfall there is also much to celebrate. Every day l see the beautiful and positive outcomes that can be delivered through relationship-based care, and l believe these new recommendations and funding will continue to shift the dial toward higher standards of care. 

At Whiddon, we offer equitable access to aged care services to all Australians, regardless of economic or social profile, and our model of care and quality standards have truly shifted towards a person-centred approach. I believe that a viable aged care sector will result in better-paid employees, more investment, more innovation, and ultimately superior care services.  

We are absolutely committed to high-quality, relationship-based care. Our belief is that everyone should be entitled to high-quality care, regardless of their personal or financial circumstances - this is non-negotiable. That’s why we need action now from the government, to ensure we have the funding and safeguards in place to ensure there is no excuse for poor quality care, for anyone.

The Aged Care Act is expected to be implemented July 1. Do you think there is enough time for the Albanese Government to look through the recommendations, put them into the Act, publicly consult, and then release it?

At this stage, I don’t think the Aged Care Act can be implemented effectively by July 1^st.

Think of the training, education and implementation processes required alone, to achieve this effectively at every home across the country. If common sense prevails then the implementation of the Aged Care Act will be deferred to allow for an effective strategy to see it given the best chance to succeed.

With this said, there appear to be some measures within the task force recommendations that can be implemented by amending the current Act.

We have seen minor amendments to the Act made in the past, and as an interim approach the industry still requires immediate measures to address the current viability challenges.

Many aged care consultants and experts believe the Taskforce did not go far enough. What do you think?

As mentioned previously, aged care funding operates using two gears; government funding and consumer contributions.

The Task Force recommendations simply build on these with a level of balance and fairness in order to meet the growing needs of the country. The difficulty is not so much the development of the recommendations made, rather its being brave enough as a government to implement them in order to effect positive change. 

I think the real question is – what will be government do about this now? There are certainly enough substantial recommendations in the report for real change to be made – we just need the government to act upon it now and start shifting the discussion now to world-class, quality care for our elders. 

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