Concern over financial gaslighting in aged care

The financialisation of the aged care sector has worsened, say researchers, with financial gaslighting becoming an increasingly common experience for older Australians in aged care settings.

Financialisation has impacted the aged care market significantly, say researchers Dr Erin Twyford of the University of Wollongong, Dr Jane Andrew of the University of Sydney and Dr Rachel Rowe of the University of New South Wales in their recently published critical accounting article Financial gaslighting: The financialisation of care in later life.

Published in the Critical Perspectives on Accounting Journal, the findings outline numerous sector-wide problems, including home assetisation, a shift in rhetoric of choice to be on individuals, and a demand for financial literacy that places an “undue burden on individuals, particularly those who may be vulnerable due to age or health conditions.”

Dr Twyford told Community Care Review that the desire to research the trend of financialisation in aged care came about organically while she was on a sabbatical and spending time at the Australian Health Services Research Institute.

“Financialisation itself is a bit of a research trend at the moment, but both financialisation studies and accounting studies have neglected the aged care context,” she told CCR.

Dr Erin Twyford (Erin Twyford)

“Given the unique vulnerabilities of people accessing aged care services, along with the fact that these are really services governments should provide but are now largely privatised, it was a really rich context to explore how we are impacted by financialisation across our lives.”

A key problem brought about by the financialisation of the aged care sector is assetisation, the paper argued. In particular, the treating of the home as a liquid asset to fund one’s access to aged care services, as it is reliant on the incorrect assumption that every person will be a homeowner.

Dr Twyford said she did not believe this trend would be challenged with the new Aged Care Act. Rather, she told CCR she believed providers would continue their preference of people paying via the lump sum refundable accommodation deposit known as a RAD.

However, she also raised her concern regarding the 10 per cent exit fee addition in the new Aged Care Act, which she is worried will exacerbate existing problems, given there is now a financial incentive in place.

“The system of negotiating payments is uneven and rests on information asymmetry – one that is often only alleviated by spending more money hiring brokers or advisors to assist with the complexity,” said Dr Twyford, a senior lecturer in UOW’s business school.

“While the introduction of the new rights is commendable, and I believe it is aimed to try and reduce this perverse outcome, my colleague Dr Kylie Kingston at QUT is already undertaking research that indicates the existence of rights still doesn’t translate to genuine acknowledgement, accountability and change if those rights are breached.

“I am eager to see how the new accountability provisions operate and whether they will provide the transparency stakeholders truly desire – or whether they will become similar to Corporate Social Responsibility reports that are so selective they are, by and large, exercises in PR. “

Dr Twyford said she would like to see independent financial advisors present during negotiation on pricing and entry into aged care facilities, rather than a continued push for individuals to become further burdened with the responsibility of becoming financially literate.

“I have seen friends with accounting and legal expertise needing outside specialist advice when accessing aged care services – it shouldn’t need this additional expertise, but it does,” she told CCR.

“Providing an independent advisor without a conflict of interest – that is, not necessarily provided by the provider – in my opinion is the best way to navigate this difficulty. Everyone should have access to independent expert advice regardless of means and circumstances.”

Whose choice?

Another concern raised in the research paper is how the rhetoric of choice has been shifted on to the individual.

Choices in the aged care sector can often be opaque, inconsistent in quality and difficult to assess, which Dr Twyford said can be overwhelming for those trying to navigate their options.

“I believe that this rhetoric of choice should be shifted back from the individual to the government, where the responsibility truly lies,” she told CCR.

“Market conditions for aged care are a fallacy, and the government’s absolution of this responsibility, like many other privatised social services, has clearly led to adverse outcomes for recipients. We need to stop treating citizens like consumers, as this only justifies reducing direct funding while shifting costs onto individuals.

“We also need to challenge the notion that everything can be marketised and reinstate government responsibility or, at the very least, oversight in a meaningful way. The implications of maintaining the status quo would be to have older Australians and their families continue to bear unsustainable costs, further reinforcing assetisation, the continued prioritisation of profit over care, and further devaluing of aged care workers.”

Dr Twyford said their research showed financial gaslighting has far-reaching implications. Namely, wealth that was accumulated over a lifetime is transferred to corporations and organisations while services are curtailed, and public funding is redirected to private service providers.

“Capital is also recirculated among new operators, such as brokers and advocates, who navigate this fraught system using government funding intended for individual care. The system’s gaslighting nature becomes fully apparent only when individuals can no longer meaningfully alter their circumstances,” she said.

“By the time you realise this, you are already embedded or too reliant on the services to genuinely push back against this gaslighting. Without meaningful change we will inherit the system we accept today – probably even worse, given that the ratio of working-age taxpayers to retirees continues to decline sharply, from 7.5 workers per retiree in 1970 to a projected 2.7 by 2049-50.”

Read the full research paper can be read here.

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Tags: aged-care, aged-care-research-and-policy-development, assetisation, Dr Erin Twyford, Dr Jane Andrew, Dr Rachel Rowe, financial gaslighting, financialisation, research,

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