Opinion: time to act on unspent home care funds

At a time when demand for aged care exceeds supply, an estimated $200 to $350 million of taxpayer dollars is going unspent in home care. It’s time for the government to take action on unspent funds, write Sandra Hills and Dr Catherine Joyce.

The amount of unspent funds held by recipients of Home Care Packages (HCPs) has been estimated to total up to $350 million nationally.  A survey of aged care providers in late 2017 conducted by LASA indicated that almost half (47.3 per cent) of packages had unspent funds. Of those, 15.9 per cent had unspent funds exceeding $10,000.

Likewise, a recent survey conducted by Stewart Brown found that average unspent funds per client has increased by $1,607 per client to $5,862, up from $4,255 in June 2017.

A Department of Health fact sheet identifies several possible contributing factors to unspent funds, including clients taking periods of temporary leave, automatic package upgrades, and holding funds for future needs.

It also suggests providers work actively with clients to reduce unspent funds. Suggested strategies include timely review of needs and services following automatic upgrades, encouraging clients to opt out of the waiting list for a higher level package if they do not need more supports, and encouraging clients to use the care they are funded for.

The recommended strategies do not acknowledge the genuine uncertainty that clients face about their future care – which is exacerbated by the current long waiting list. And they represent only a fraction of the full range of potential causes and contributing factors to unspent funds.

Unintended consequences of consumer directed care

The Commonwealth and providers have been working together to increase transparency of home care pricing. However, an unexpected consequence of pricing transparency has been a rise in underspend.

Following the introduction of Consumer Directed Care (CDC) in July 2015, consumers had visibility of their funding for the first time. On one hand, this is a very positive outcome. Conversely, the extent of underspend has increased post-July 2015.  Without initiatives to address underspend in parallel to pricing transparency, underspend may continue to grow.

For Government, the problem of unspent HCP funds is twofold. First, they represent inefficient allocation of public funds. Second, they appear as a potential source of funding to invest in additional packages for the more than 100,000 people on the home care waiting list.

Better use of home care funds is clearly in the interest of consumers. It is important for older people to get the care they need at home for their quality of life and also to avoid and/or defer a move to costlier permanent care.

Aged care providers exist to deliver much-needed services to older people. They do this by working with clients to develop care plans and talking about package funds and how to spend them. However, providers are hamstrung if a service recipient chooses not to utilise the full value of their package. The flexibility providers had prior to the introduction of Consumer Directed Care (CDC) to pool unspent funds for the benefit of groups of clients is no longer an option.

There have been a small number of published studies investigating consumers’ experiences of home care packages based on data collected in 2015 and 2016 where researchers concluded that package recipients needed time, support and information to understand packages and to develop the confidence to be able to effectively exercise choice and control.

The NDIS experience

A Productivity Commission review of the early, transitional stages of the National Disability Insurance Scheme (NDIS)  found that in 2016-17, an estimated 30 -41 per cent of committed funds were unspent. The Productivity Commission identified that contributing factors to this included: insufficient supply of appropriate services; ineffective planning and NDIS participants experiencing difficulties in both accessing information about their allocated funding, and in navigating the system to access supports.

This raises some interesting questions for the aged care sector. How important are factors such as supply of the right types of services, in the right locations? Are there problems with needs assessment processes? Do package recipients have sufficient transparency, as well as sufficient skills and supports to navigate the home care market? What level of underspend is acceptable?

The matter requires further exploration including a better understanding of the views and interests of all key stakeholders. Minister Wyatt has asked the Department of Health to investigate this complex issue and identify the drivers of accumulating unspent funds in home care packages.  The sector hopes this research will provide a firm foundation for action by Government to ensure public money is utilised to its fullest extent and the care needs of older Australians who want to stay at home are addressed.

Sandra Hills is the Chief Executive Officer of Benetas and Dr Catherine Joyce is manager of research and innovation. 

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