Home care providers are sitting on more than $1.2 billion in unspent funds, a key aged care report says.

Grant Corderoy

The latest StewartBrown financial performance report says the level of unspent funds has been rising with each quarter and now averages more than $9,000 per client.

“In aggregate, this represents in excess of $1.25 billion of funding that is not being utilised,” the report says.

It says unspent funds remain the biggest single issue for home care providers from both a service delivery and financial performance perspective.

Senior partner Grant Corderoy has welcomed changes to home care funding set to come into effect from next month, which he says are expected to ease the burden of unspent funds held by providers.

The changes will be phased in from February 1, with subsidies to be paid in arrears rather than in advance.

From September 1, payment will only be for actual services, with the government holding onto all unspent funds until they are needed by the recipient.

However Mr Corderoy says while the changes will keep a lid on accrual by providers, they won’t alleviate the overall level of unspent funds in the system.

“We’ll just be transferring the unspent funds liability from the provider to the government,” he told Community Care Review.

“One of the big issues in home care is that providers are overfunded … the current care recipients aren’t using all their funding and until that’s addressed we’re still going to have issues.”

Decline in financial performance

Stewart Brown’s survey found a decline in the financial performance of HCP providers for the three months to September 2020 compared to a year ago, with a slide in both revenue per client per day and average operating profit per client per day.

It also found a continued decline in revenue utilisation and a continued reduction in staff hours per client.

The report says home care providers have experienced an overall decrease of $2.67 per client per day in comparison to the September 19 three month period.

It says this is a slight improvement on the 2019 results but because the September quarter is usually the most profitable, “the results are less than what might be expected”.

Growth in unspent funds ‘unsustainable’

Average unspent funds per client increased to an average of $9,151, and this is having a direct effect on both the profitability and sustainability of providers, the report says.

“This continued growth in unspent funds, and many probable instances of their use for capital-related expenditure for care recipients (probably for a short-term benefit in many instances) is not sustainable,” the report says.

StewartBrown says the impact of the funding changes will have to be closely monitored, though it says indications that unspent funds can be returned to the government over a reasonable period, and the possibility of a limited grants scheme for vulnerable providers should help interim cash flow problems.

The StewartBrown September 2020 Aged Care Financial Performance Survey incorporated data from 52,534 home car packages for the three months to September.

Stewart brown notes that COVID-19 and bushfires have stretched the capacity of aged care providers to an unprecedented extent, however analysis for the current report discounts the effects of government support programs as well as any additional costs relating to the pandemic for more accurate benchmarking.

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14 Comments

  1. Consumers either don’t need the supports equivalent to the funding they are receiving or want to keep the money “just in case”. When they do decide on what they want to spend it on, it is generally for household items or improvements that do not align with their goals or do not meet the guidelines. Providers can only do so much to convince comsumers to accept services.

    1. I agree Jodie. Quite often requests for purchases or improvements don’t fit the guidelines and consumers get very frustrated when these requests are declined. A home care package cannot assume responsibility for things that would otherwise be paid out of general household income – this is part of the guidelines. Providers have a responsibility ensure that they are working to support the consumers needs within departmental guidelines and the inclusion and exclusion framework in the provider operational manual poses detailed considerations to assist with care planning – it’s not just a yes/no question and just because Mary got a certain thing though her package doesn’t mean it meets the care needs of Jim but sometimes people think because another recipient got a certain thing they should too. We weigh up all sorts of factors such as assessed need, whether there is capacity in the budget without effecting other services received by the consumer etc. Also, with some consumers, as Jodie said, we can offer all sorts of supports and services but we can’t make someone accept them, this has been especially true during the COVID pandemic when people are fearful about accepting care due to perceived risk of the disease.

      1. The reason supports aren’t accepted is that in many cases they are rubbish. The “carer “ who comes and sits on there phone, The number of different people’ who are sent and do bugger all. We need Aged Care Recipients to be bought in to management of services to inform service providers so that the funds aren’t wasted because providers don’t give a stuff about their clients needs they are so heavily weighted toward profit and building businesses. Sit as a recipient of these crap services and you will see why they money isn’t being spent. It’s not that recipients wont accept help but theat recipients are sick of the bullying, service centric attitude of service providers that treat package recipients need as a business opportunity .

        1. If you are not getting the support you need perhaps talk to the service manager and if they cannot assist you to resolve your issues then you can always change providers – there are plenty of services out there doing the right thing. Elder Rights Advocacy may be able to assist you 1800 700 600 and if you are still unhappy you can talk to the Aged Care Complaints Commissioner 1800 550 552. Any carers who are on their phone during a shift or are not completing agreed tasks are not doing their job and this should be fed back to the provider – they can’t help you if they don’t know what is/isn’t happening. The majority of providers and their carer workers are there to support the best outcomes for their consumers and their families so if you aren’t getting that experience have a look at what else is out there. Also, supports aren’t only offered in the form of carers coming into the home – there are many other ways Home Care Packages can support independence, preventative health initiatives, community access and a good quality of life and these options are not always taken up by consumers (this is their choice and their right to accept or not accept but options are available and a good Case Manager can assist people to explore and link into those options).

  2. Whilst I agree with Grant’s factual statements, I reject entirely the resignation and casual way he portrays the transition to the new funding arrangement without highlighting that this is a “lose, lose, lose” situation for the home care industry.

    Lose in that Consumers are receiving less care than their assessed needs require, lose in that approx. 50%, if not more, of the unspent funds would belong to the provider if services were delivered correctly [i.e. $650 million], and lose because it sends out the wrong message to government, that the industry is overfunded and that the level of understanding on how to manage the home care programme is less than adequate.

    These outcomes will lead to further intervention, potentially less funding and less viable care providers.

    David Powis MBA

  3. If Grant Corderoy did some qualitative research, he may be surprised to learn the reasons many recipients of home care packages are not spending their allocated funding.
    My research highlighted several providers (mostly large well known providers) that simply did not offer services that clients wanted.
    My research shows that the clients who are most happy with their home care package are those who self manage. They are able to determine the services/equipment they need to live well at home, provided these services are within the guidelines.
    Participants of my recent research said more people would self-manage if they knew about it and how easy it was to do. Although participants acknowledged that self-management might not be suitable for everyone, they said everyone should have the option to self-manage.
    Participant 13 hoped self-management would become the “norm” within a few years.
    I hope in a few years’ time, self-management will be the norm. And the heavy case management – which has been the norm for years – will be only for those are unable to look after their own affairs and don’t have someone who loves them to help them (e.g. those who need Public Guardians). Most of us have lived our lives being capable of doing quite complicated transactions – such as purchase a car, which is a large transaction that may involve a loan with a bank. We are competent to do those things but we are not trusted to supervise a cleaner in our own home. To me, this seems daft. (Participant 13)

    1. Dr Russell,

      Self management would be a fine model if:
      1. The provider is not ultimately responsible, indeed able to be sanctioned, despite not being able to ultimately control the services and delivery.
      2. Family members are excluded from the arrangement, where cases of abuse are observed. Also, they should meet the same criteria as ever other person involved in the delivery of services, skills, insurance cover, etc.
      3. Control mechanisms are in place to ensure the system is well managed and accountable.
      4. The consumer is well educated on what they are able to spend funds on.
      5. The consumer is required to sign an agreement that is enforceable and they take responsibility for any abuses to the system.
      6. There is an independent method of assessing if the consumers’ expenditure on goods and services is directly related to assessed needs as well as the appropriate care goals and objectives.
      If, as you say most people will self manage then the role of the provider becomes relegated to being an invoice processing center.

      Whilst I accept the current system is not perfect few are being fully honest about the issues, nor are they contributing to improving the model so the consumer gets the services they need to meet the basic principle of remaining at home and independent as long as possible.

      Unspent funds is a clear indicator that a large number of providers, and in particular their senior staff do not have a clear understanding of their role and accountability to ensure consumers are provided goods and services according to their independently assessed needs. In addition, the GP and allied health professionals are not involved enough, as part of the planning, monitoring and ongoing assessment of the programmes.

      New entrants, and even existing providers need to look closely at systems and in particular staff education to ensure they understand the full requirements of the programme and how to deliver on those requirements.

  4. Indeed this article is extremely biased in favour of the “poor victims”…the providers!
    It doesn’t matter that we the “hoarders of unspent funds” are constantly having to argue, beg, justify and grovel to get the appropriate goods and services we actually need to remain comfortable for as long as possible in our homes…which by the way is the whole purpose of home care packages!
    I’ve had to beg for an electrician to be paid out of my own HCP funds, to restore electricity due to some malfunction, that caused my insulin in the fridge along with other goods to perish, me being stuck in my recliner lift chair, my carer not even able to boil the kettle to make me a cuppa and calm me down.
    Not to mention all the other essential apparatus and equipment that’s been recommended by my health professionals team, or refusing to pay for my specialist dermatologist prescribed expensive ointment; which by the way is listed as a valid purchase to “preserve skin integrity”
    This article is so demeaning and insulting, I really don’t know where they got their information from, but to blame consumers is very wrong!
    Just ask us…not the “poor” providers feeding off us!

    1. Hi Mo,
      It is unfortunate that you were not able to get the support you needed, but please be aware that you can change provider, at your discretion. In my view, your request is cover by the following service inclusion and should have been met:

      Home maintenance, reasonably required to maintain the home and
      garden in a condition of functional safety and provide an adequate
      level of security

      There are benefits having a Provider involved that can coordinate and assist consumers administer, manage and deliver the services. If you, or a family member can access the Internet please go to the following site and you will find the manual that is provided to identify how the programme operates.

      https://www.health.gov.au/sites/default/files/documents/2020/03/home-care-packages-program-operational-manual-a-guide-for-home-care-providers.pdf

  5. The truth is the Provider doesn’t want you to spend as many think the funds belong to them. They don’t advise the person of what they can purchase to be comfortable, keeping them in the dark. Or they make you jump thru so many hoops to get what you are entitled to.

    This causes giant stress for an old person. It was years before I was told anything other than a bed or a scooter. I was not given a list of goods or advised to get a OT to assess my needs. I didn’t now what I didn’t know. I desperately needed nutrition vitamins as I was severely malnourished but no one advised me. The whole industry is anything but a care industry. The people they employ are not professionals.

    First and foremost it’s a business, with a bias toward so called care. All your sympathy seems to go to Providers as your analysis’s seems to be a numbers game.
    As my Doctor said yesterday, The government has thrown money at the age care industry without formulating a proper plan without any care in it whatsoever, that’s why there’s unspent money.

    1. Nia,
      The funds are provided for the delivery of goods and services for consumers. Of course some of the funding is also allocated to cover the cost of administering and delivering the services. The role of the provider is to coordinate, supervise, deliver or arrange to be delivered goods and services and the provider is accountable, directly to its consumer and also to the Department for quality outcomes, financial management and the professional delivery of the requirements of the home care programme. As I mentioned to Mo [above] if you or a family member can access the Internet I recommend that you go to:
      https://www.health.gov.au/sites/default/files/documents/2020/03/home-care-packages-program-operational-manual-a-guide-for-home-care-providers.pdf

      And improve your understanding and how you deal with your provider. As I also said to Mo you have every right to change your provider should you be unhappy with the programme but I do suggest that you first raise your concerns with the senior management of your current provider and see if you get the appropriate response.

  6. If package upgrades were not just allocated automatically and rather, were offered and had to be accepted in the same way as the initial package does we would not have so many people with large surplus’s. Then there would be more funds to spread amongst those who are waiting long periods for package allocation. Sometimes initial assessed needs are able to be maintained on the current package level and an upgrade is not necessary at the time of offer. Once allocated you can’t go back to a past level. Perhaps there should be a review of people with large balances and if no further current needs are found the package could revert to a lower level (with capacity to move up as needs change). Also, there needs to be more education at the initial stage of enquiry about applying for a home care package in relation to the purpose and function of the package – many people come on board requesting cleaning and gardening only – a home care package can, and should offer so much more than that. The aim of a package is to assist someone remain living independently at home and experience a good quality of life with access to supports and services which will help them achieve this. Another area of concern is for people to understand what is and isn’t appropriate to purchase through their home care package as this can cause frustration when not clearly defined.

    1. Lisa,
      I agree, the initial assessment and subsequent assessments need to be needs based. In some areas the programme is too loose and this leads to confusion. In some instances it has turned into a “shopping programme”, rather than being constantly referable to needs, goals and outcomes.

      Too often care plans are not upgraded with goals being reassessed to determine if they have been achieved or not and if not, why not, and then action taken to amend the care plan to address the deficiency.

      Since funds are tied to the level of independently identified needs of each consumer, logic says that there should not be any significant unspent funds, if goods and services are delivered correctly. Unspent funds indicated there is a failure in the system, most likely in the care planning and delivery area.

  7. One of the reasons there are so may millions of dollars in unspent funds is people are allocated higher level packages that they need. People receiving level 4 and only requiring a few hours housework and 3 hours shopping support. These same people then look to purchase things that providers refuse to provide without requiring Occupational Therapist reports for each item. Of course, the providers receive a kick back, even if it is just 10% for paying the invoice.
    Providers are pushing for these allocations, requesting high priority reassessments, and they are granted. Initially my ACAT assessment was approved for level 4 but I started at a 2. Then 3 and 907 days later I got a 4. I understand the wait. I understand the advance approval system. However, in many cases needs change or the requirement for level 3 or 4 is not needed when that level is approved.
    I do know a few people receiving level 4 and only using level 1-2 services. Then $40-$50,000 builds up. Providers are earning interest on that money. I know many people with more that $10,000 sitting in package. One lady is only on level one and has $7,000. She gets a cleaner once a fortnight. Makes me wonder why is she on a package at all and not just CHSP with so many people waiting for packages.
    I am in a rural area and it is definitely who you know not what you know situation. If you know the ACAT assessor or your provider personally you receive a lot more. Items are even suggested. I didn’t know a tilt kettle existed until I went to someone’s home for a meeting. Asking where she got it she informed me her providers manager just turned up with it one day. I now know they bought a few dozen at cost price and charged the package retail and kindly “gifted” them to clients. I really need an item like this. I asked my provider and I will need an OT assessment costing approximately $500 to get a kettle.
    I self manage my package and love the freedom to choose the hours I have workers in my home and choose whom I want working for me. I do, however, find it extremely frustrating that everything I request i need an Occupational Therapist report for. This keeps the funds moving for providers and the economy going around as the OT often has their own builder/handyman for home modifications etc and of course the provider gets their 10% on top.

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