Recommendations to Royal Commission miss the mark

Recommendations to the royal commission are focused on increasing control for providers rather than reforming the system for consumers.

Regulators and bureaucracies will be the winners if recommendations made to the aged care royal commission are adopted, writes Mark Sheldon-Stemm.

The 124 recommendations proposed to the Royal Commission into Aged Care Quality and Safety in late October can be classified into three strategic areas, or principles:

  • incentives
  • regulations and
  • new bureaucracies.

The following table summarises these key principles and whether they are focused on the consumer, aged care provider or both:

It is clear from this summary that the recommendations focus on:

  • regulations and new bureaucracies
  • further control of the provider to ensure they are doing the right thing
  • improving the existing system rather than designing a new system.

The emphasis on these areas is likely to have come from who the royal commission listened to and who they ignored. The inquiry relied heavily on experts who know about control systems and processes rather than the practical application of aged care services.

Mark Sheldon-Stemm

Therefore, the emphasis of these recommendations is on increasing control mechanisms for providers rather than reforming the system for consumers and providers alike.

It appears the regulators and bureaucracies are the winners of these proposed recommendations.

There are upsides for the consumer, but these rely heavily on the government applying more funds to aged care and in the current environment, which seems unlikely.

For the providers there are a series of opportunities and threats depending on their area of service. The royal commission has favoured home care over residential care with increased incentives for people to stay at home.

On the other hand, residential care providers also have some opportunities for a fairer system of funding through the new pricing authority. The only break on this is the level of funding the royal commission is seeking represents an increase of nearly 50 per cent of the current level of annual recurrent funding provided to aged care.

The likelihood of this can be measured by the efforts over the past 23 years to gain increased funding in aged care.

In taking up recommendations, it is always easy for governments to accept those where they increase their regulatory powers and penalties for noncompliance.

Possibly the biggest win for consumers and the biggest loss for providers are recommendations 109 and 110. These are about civil penalties and the right to compensation for breaches of duty of care.

It is important to recognise that aged care is and will increasingly become a high or very high-risk sector. This is because consumers only gain entry to the system when they have emerging or actual chronic health or complex health challenges or due to severe diseases, injuries or accidents, and thereafter pass away whilst in care.

As a  consequence of this situation, boards, chief executive officers and other executives of aged care organisations are likely to become even more risk averse and conservative. This is in direct conflict with the intent of the aged care standards and the Aged Care Act 1997.

The other likely consequence is a sharp increase in insurance premiums for professional indemnity and public liability.

Ultimately, it will be up to the Commonwealth Government who decides how it satisfies the various interest groups when selecting and enacting the final recommendations.

A missed opportunity

Our assessment of these recommendations finds that Counsel Assisting have in essence missed a real opportunity to provide a definitive and pragmatic strategic pathway to not just reform the existing and dysfunctional aged care system, but more importantly to design and implement a new system that:

  • first and foremost, puts the consumer at the centre of care providing true customer choice and control in the services they require, the providers they choose and in  service options and pathways
  • draws up the demonstrated and known capacities and capabilities of providers, and in particular leading and upper-mid  level providers, to exercise their creativity , innovation and entrepreneurship in ways that respond to consumer expectations and requirements, whilst also operating in a new, rather that just renewed, legislative and regulatory framework
  • becomes a vital and fully integrated part of the Australian health care system along with acute, allied health and primary care systems and service providers.

Mark Sheldon-Stemm is principal at Research Analytics. Michael Goldsworthy, managing director and principal consultant at Australian Strategic Services, contributed to this article.

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