Unspent funds highlight need for home care reform, says expert

Unspent home care funding totals $2.4 billion, the government’s first quarterly financial summary of the aged care sector shows.

Unspent home care funding totals $2.4 billion, the government’s first quarterly financial summary of the aged care sector shows.

Published by the Department of Health and Aged Care – and released in response to a call for transparency by the royal commission – the Quarterly Financial Snapshot of the Aged Care Sector shows $1.61 billion held by providers in the home care account balance and a further $800 million retained by Services Australia.

Source: Quarterly Financial Snapshot of the Aged Care Sector Quarter 1 2022-23 July to September 2022
Grant Corderoy

Senior partner at StewartBrown Grant Corderoy told Community Care Review the large amount of unspent funds exposes the flaws of the current home care funding model.

“As nearly 96 per cent of these unspent funds are never utilised by the existing care recipients, it highlights the need to change the funding model so that allocated subsidy funding for each care recipient is actually used on care services delivery,” he said.

Drawn from statistics collected from aged care providers through quarterly financial reports and data obtained through My Aged Care, the QFS is a point-in-time analysis of the financial performance of Australia’s aged care system.

The inaugural report – which covers the period July to September 2022 –­ also shows that 78.4 per cent of home care providers were in the black, collectively making a net profit before tax of $92.4 million, or $5.00 per client per day.

Source: Quarterly Financial Snapshot of the Aged Care Sector Quarter 1 2022-23 July to September 2022

Meanwhile, the median total staff minutes afforded to home care clients during the period was 53.65 minutes per care recipient per day. This includes RNs, all personal care staff, allied health, other direct care staff, care management, and administration and support.

Source: Quarterly Financial Snapshot of the Aged Care Sector Quarter 1 2022-23 July to September 2022

The median total staff cost was $44 per client per day.

The average hourly rate for an RN working in the home care sector was $49, enrolled nurses earned $37 and personal care staff $32.

Source: Quarterly Financial Snapshot of the Aged Care Sector Quarter 1 2022-23 July to September 2022

Crunching the EBITDA margin – earnings before interest, taxes, depreciation, and amortisation – the QFS shows providers recording a return of $8.86 for every $100 of revenue earned.

Anika Wells

Upon release of the QFS, Minister for Aged Care Anika Wells said in a statement: “You can’t improve what you can’t measure which is why the Albanese Government is committed to stronger reporting and oversight in aged care. The snapshot shows the strain a decade of inadequate funding from the Coalition has put on the aged care sector.”

Addressing the aged care reforms, Ms Wells added: “The new AN-ACC model has been implemented, funding for 24/7 registered nurses is rolling out and we have committed to funding the aged care workforce value case – these changes will support the future of Australia’s aged care service providers’ finances and operations for the long term.”

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8 thoughts on “Unspent funds highlight need for home care reform, says expert

  1. It would be good to see some data in these reports about the number of older people approved aged care packages and getting interim support from CHSP providers and the effect this has on capacity of CHSP providers to meet the demand for services such as domestic assistance and home maintenance

    1. Conversely, if needs can be met under CHSP why do they need a HCP? Are you talking about clients who have been/are currently CHSP clients and then gained approval for a HCP and waiting? Are they not then a CHSP client? Surely a CHSP provider wouldnt take on someone only approved for a HCP to provide “interm” support?

  2. The issue of so many HCP recipents being on a package when they could be supported via CHSP or being on a level higher than needed has been there since the changes in 2018. Wasnt really an issue before then. HCP need used to be based a lot on the need for Case management(and hence the client’s move from what was HACC to a HCP)-that went out with the changes. Now its all about spending and the CM role is really about policing the spending. Use the restrospective funding model to ascertain those HCP clients who need to go down a level. There’s a whole cultural shift needed in the community about hanging onto something “just in case”. You either need the services NOW or you dont. Automatic upgrades and an inability to move someone down a level has been a major problem. The criteria for approval for a HCP needed to be way more rigorous-when their name gets to the top of the waitlist their current needs for services(and not “things”) should be re-assessed before a HCP is assigned . Hand out a set number of coupons per year to use with private providers for lawn mowing, window washing & spring cleaning and many of the Level 2 HCP recipients wouldnt need a package. They dont need case management-just the money to pay for mowing. The guidlines talk about HCP not being an income source, and yet so much of it now is about purchasing “stuff” rather than support, or getting approvals to avoid paying CHSP co-contributions.

    1. When you look at NDIS this is the model that needs to be implemented for MAC. MAC lacks flexibility in what can be purchased such as community engagement in arts and culture course to pay for joining a group. Loneliness is know to be a major factor for older people. Many older people don’t own a home and pay rent from a pension. Women who do not have super and rely on pensions are very often isolated, depressed, and this effects their health and wellbeing. Let’s look at the culture engagement side of inclusion not just cleaning and gardening.

  3. It’s all very well looking at earnings before tax in this article, but state based payroll taxes, portable long service leave schemes, etc eat into any difference between actual direct service delivery and the true cost of operating a business in this sector.

  4. My Aged Care Providers are incompetent. Their care coordinators are lazy. One nurse to cover the northern suburbs of Perth is a joke.
    It took me seven months just to get a walking aid $200 dollars. I am on package 4 which is over 50 thousand dollars per annum. Therefore it is not a surprise that all the funds are in the bank earning interest for these…

  5. mr Styles is correct. I have used CHSP for 14 years and HCP for three and there is no comarison. HCP is far superior especially when self managing. With CHSP i could not get lawn or garden assistance and my house clening was once a fortnight and whatever day/hour suited the provider. during COVID lockdowns a different cleaner came each time. se;dom did the same cleaner attend my home despite my pleading to have a constant cleaner. Thus the number of strangers entering my home whohad to be shown what to do each time was unnerving. HCP. I engage my own cleaners. They come when I need them. I have regular yard car, i order my frozen dinners weekly, I have twice a week hydrotherapy, travel to a bigger town for specialist support etc, But I still have more money in my surplus funds than is in my bank account because I pay my people myself and ask for reimbursement. in a rural area your reputation depends on prompt payments and I have been embarassed when a massage therapist had to wait months to be paid. I can no longer receive art and craft funding and I am in debt over that as my provider changed that process without warning leaving me worse off financially and emotionally. Money left with providers is not because we receive too great amount of funding but because providers will not keep their word and will not fund requested items without an OT report which is a waste of funding. If case managers were better trained, then OT at a costof over a thousand dollers per report would be un neccessary. At 85 I am competant to decide on my own health plan and i do not need untrained bureaucrats telling me how to manage my life thankyou very much. Proudly Stella Perkins

    1. I agree with all these examples . The people with positions from admin to Case Managers making the clients decisions instead of listening to what the person needs and in some cases telling them they have insufficient funds or that’s not on the list or we have sent an email to the OT or the Department and are waiting a reply . ( try a phone call) . In the mean time you the client is left in limbo . However we can still manage to take 20% of your package

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