THE HON KEN WYATT AM, MP
Assistant Minister for Health and Aged Care
Federal Member for Hasluck
SPEECH
COTA/Criterion aged care reform conference
6 December 2016
Sydney, NSW
Good morning.
Thank you for the opportunity to talk today about a very important topic to
Australians – aged care reform.
I respectfully acknowledge the traditional custodians of the land where we are
meeting and pay my respects to Elders past, present and future. I
acknowledge other Aboriginal and Torres Strait Islander people here this
morning.
I am very pleased to be here to speak on behalf of Minister Ley and the
Government, and as Assistant Minister responsible for implementing aged
care reforms. I can’t overstate the importance of these reforms, for Australia,
now and in the future.
It is an absolute honour for me to find myself in the position to be able to
guide and provide stewardship to a process of reforms that are both
necessary and will bring a great deal of benefit to our communities, across the
whole country in all its diversity.
I have always felt, throughout my life, that our older people deserve the
greatest respect, our time and our care. I learned this when I was a little
fellow, a barefoot kid from the bush. I had a happy, free life, and I learned a
great deal from my grandfathers, including how to solve problems, how to fix
things, and how to see the world through a lens of respect, of family, and of
taking time to do the right thing.
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Now I am almost as old as they were when I was little – not quite – and in a
position to make a contribution to building a system that is strong and based
on the respect and equality that our older Australians are owed and deserve.
And our reforms are built on the core principle that people are the centre of
the system – and individual consumers, now and in the future, must be able to
choose the kind of care and support they need, where and when they need it.
Aged Care in the broader health system
The Government is implementing an ambitious health reform agenda across
the whole system. Streamlining and integrating the system to preserve its
strength, ensuring it is sustainable, responsive and puts the needs of
individuals at the centre of care.
There are reforms across primary care – with our Health Care Homes
initiative and the management of chronic and complex conditions,
strengthening rural and remote health, the role of pharmacies, streamlining
PBS, devolving health service decision-making out to the regions with Primary
Health Networks, and mental health and suicide prevention trials, just to name
a few.
Aged care reform is a very important part of that broader reform process –
and reflects the principles that underpin the whole reform agenda – greater
choice, more flexibility, people-centred, sustainable.
And a driving factor in this reform process is that ageing is changing, and we
need to ensure the system can respond to that. The demographics are
changing markedly. People are healthy and active for longer and the aged
care system is adapting to that.
Residential care is only one part of the new picture. More people will stay at
home for longer, and be more active into their older age. So the system –
once based on a notion of ‘putting people into an aged care home’ – has to be
radically overhauled to offer more choice and be more flexible. It needs to
take into account the different and changing needs of diverse communities,
and allow people to move in and out of care as required.
We have more older people, and life expectancy is increasing. Life is from 0105, or even more, and getting older is just another step along the way – but
still busy, still active, still in charge of what you want from your life. But with a
system that will look after you when and if you become more frail.
Underlying drivers for change
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So the ageing population is increasing – over the next 40 years there will be
more older people, and less people in the workforce. It’s simply a matter of
numbers.
We need to adjust – and make sure the aged care system is sustainable into
the future. There is an important generational shift in attitudes. Baby boomers
bring different expectations of service delivery, of health systems and of aged
care – and remaining in control of their decisions is important. It is important
to all of us, in fact.
Regardless of our background, we all want to feel empowered to choose the
life we want, the conditions of our life, and the care that we access.
Consumer Centred Approach
The key to change is moving from ‘doing for’ to ‘doing with’. Aged care is a
partnership – the consumer, their carers, the providers, the policy makers,
and the government.
My Aged Care – is well on the way to functioning as a virtual marketplace –
giving people the information they need about aged care services. And giving
service providers the chance to let consumers know what they offer. For
assessors and providers, it is also equipped with tools to receive and manage
referrals.
This one-stop shop is designed to help put, the consumer, in charge – freely
accessing information and allowing consideration of the care options that will
suit best. From 27 February 2017 – we will take this even further. These
changes to Home Care packages mean that funding for a home care package
will follow the consumer, allowing them to direct funding to the provider of
their choice.
Home care packages will be portable for consumers, allowing them to change
providers if they wish. If they choose to change providers, any unspent funds
(less exit amount) within their package will follow them to their new home care
providers. This again is a simple, but transformative reform – that will give
consumers ownership of who and how their care is delivered. Providers will,
by necessity, be more focussed on the needs of clients.
Quality
Quality of course remains a key priority for government, but these days it
means so much more than safety and minimum standards. It means the most
robust information about services being available – so consumers can make
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informed decisions. It is an ongoing project to refine this new definition of
quality – to work out how to categorise, collect and communicate information
about quality – and how to make it work for the sector, and for consumers.
We welcome your ideas about what quality means for you – and how we can
integrate these ideas into our monitoring.
Choice
Choice is important but must be tempered – it does have limitations.
Disadvantaged people must have equality under the system to be able to
access the care they need.
Part of the reform agenda is improving sustainability and encouraging
innovation and bespoke service design so that resources and services can
address the needs of particular communities.
Applications for the next Aged Care Approval Round (ACAR) just closed.
Through the 2016-17 ACAR round we have created 10,000 additional
residential aged care places and will allocate 475 short term restorative care
places. Up to $64 million in capital grants under the Rural, Regional and Other
Special Needs Building Fund will form part of this ACAR – encouraging
greater investment in areas of high need.
I am very pleased by this provision – as I know how important it is for older
people in our rural and remote towns and communities to be able to create
aged care services that work for them – to have adequate, appropriate care
services in the communities where they belong.
The $64 million in capital grants includes $11.5 million that has been
earmarked for residential aged care for people from culturally and linguistically
diverse backgrounds. Allocation will try to achieve a balance between
metropolitan services, and regional, rural and remote areas. The allocation of
home care places is no longer conducted through the ACAR. From February
2017, home care funding will follow the consumer.
Aged care Roadmap
The Aged Care Sector Committee has developed the Roadmap to provide
advice about the sector’s shared view of the future vision for aged care and
directions for reforms. It is intended to generate discussion across the aged
care sector, and Government, regarding future reforms.
By setting out the sector’s considered view of short, medium and long term
reforms, it provides a platform for Government to work with the sector on
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difficult and complex reforms. Aged care reform has been a model – for
consultation and collaboration in designing – more accurately, co-designing –
and developing policy.
As with any complex issue, we don’t always have the same perspective on
the challenges we’re seeking to address. Providers have their own
challenges, and some more than others, yet the sector has always been
prepared to be genuinely collaborative when taking a seat at the policy table –
sharing expertise, sharing learnings, sharing objectives – conscious of its
pressures, but also conscious of ours in Government.
Further changes to the system will also be informed by the recommendations
from the Aged Care Legislated Review, being led by David Tune, which will
consider the impact of the aged care reforms announced after the Productivity
Commission’s Report of 2011 Caring for Older Australians.
Aged Care Funding Instrument
Many people across the sector have had a lot of questions recently about
changes to the Aged Care Funding Instrument – and measures the
Government announced to seek to mitigate higher than anticipated growth in
expenditure in residential care.
In terms of aged care funding, I think it is important to start with a discussion
of the facts. The Government will provide estimated funding of $17.5 billion in
2016-17 to support aged care consumers and the sector. This funding is
growing, not reducing, and expected to reach over $21 billion by 2019-20.
Aged care funding is in fact growing at a faster rate than the rest of the health
sector.
Due to much higher than expected growth in funding claims, at the last
Budget and MYEFO the Government actually increased its estimated outlays
on residential care by a combined total of $3.8 billion to 2019-20. As a
responsible fiscal manager the Government did have to take action to mitigate
the impact of this much higher than anticipated growth, and we announced a
range of measures to bring funding back to more sustainable levels.
The net impact was that Government still increased its estimates by $1.8
billion in net terms to 2019-20. That is a $1.8 billion increase over and above
the growth in Government spending previously planned. Even after the
MYEFO and Budget changes, funding to the residential care sector continues
to grow - and will grow in aggregate by 5.1 per cent per annum on average to
2019-2020.
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The Government is committed to an aged care system that supports older
people while ensuring aged care expenditure is affordable and sustainable for
taxpayers.
I have met with many representatives from the sector about the ACFI changes
and the Department has held discussions with key stakeholders (through the
Aged Care Sector Committee and the ACFI Expenditure Working Group) on
the changes.
Going forward, both the Government and the sector are keen for a system
which provides stable funding arrangements. Accordingly, work is underway
to investigate other approaches to determining residential care funding. The
Government is engaging with the sector on the development of this longer
term reform.
As part of this work the Department has engaged the University of
Wollongong to undertake an international review of alternative long-term aged
care (or similar) assessment, classification and funding models and provide
options for consideration for future use in Australia. It is anticipated the
University of Wollongong will provide the Department with a report on this
work in early 2017.
Innovation and Reform
I’m keen to hear your ideas, your innovation. I’m interested in looking at
beyond the challenge of the immediate.
We have profound demographic changes driving us. I want to focus on
listening to the concerns of providers, consumers and carers and looking at
how we can do things differently. I’m interested in what’s happening overseas
– in Japan, and the Netherlands. About dementia in the community. If there
are good models, share them with us.
Some examples that have caught my ear lately:

In the Netherlands, Dutch university students are given free
accommodation in an aged care facility – and then the young and old
spend time together, enjoy activities and benefit greatly from the
combination of security and company with great health and mental
health outcomes, and a great sense of growing social capital.

Right here at home, Indigenous communities establishing innovative
care approaches such as Kapululangu Aboriginal Women Law and
Culture Centre, in Balgo on the Northern Edge of the Great Sandy
Desert in Western Australia – where volunteers and carers run an aged
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care facility for female Elders along ancient cultural lines. More
information can be found on the Kapululangu Aborginal Women Law
and Culture Centre website

Combining child care and aged care, such as ‘The Mount’ in West
Seattle where elderly residents suffering from dementia and
Alzheimer's disease are experiencing emotional and mental
'transformations' at a nursing home which has been combined with a
childcare centre. More information can be found on the Channel 7’s
Sunday Night website

There are pockets where this is happening in Australia - Playgroup
Victoria is running playgroups in aged care facilities, and there is a
small state initiative where students can live at an aged care service
and help with and spend time with the old people – to great mutual
benefit.

Even something simple and innovative like pet friendly facilities are
making a difference, such as in northern NSW where three pet friendly
facilities are offered by Feros Care – in Byron Bay, Bangalow and
Wommin Bay. More information can be found on the Feros Care
website
Again these ideas aren’t complicated, they are simple, and logical in many
cases – and can make an incredible difference to the lives of older
Australians. I want to see all the ideas.
The Roadmap provides a very positive vision for aged care in Australia. It
provides a framework for us to consider our future reform – providing us with
the basis for effective policy discussions as we move toward a system, less
regulated, more consumer-focussed with a stronger presence in the
community. It sets out – in one coherent framework – the Sector Committee’s
views on short, medium and long-term goals and needs for the sector.
I can assure you that I will be actively engaging with the vision as we consider
the next tranche of reforms for aged care. Continuous improvement is
important. That we are learning, developing the strengths in the system,
making adjustments, and being accountable and I look forward to working
with all of you on this.
Government doesn’t ‘own’ or ‘control’ the system – we are in partnership with
you, and with the community – to deliver the right conditions for a strong aged
care sector. And to look after our old people, and give them respect. A better
community and a better, kinder, and more cohesive society will be the result.
As I mentioned at the Aged Care Sector Committee last week the
Government is close to announcing a revised package of aged care funding
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measures. We have heard the sector’s concerns on the impact of the Budget
measures on the Complex Health Care domain of the ACFI and have made
some adjustments accordingly.
The revised package retains those elements of the Budget measures with
strong clinical justification, such as addressing perverse incentives to take
longer to deliver medication and reducing the scoring for some less complex
procedures. The additional requirement to meet a timing requirement to
receive maximum funding for complex pain management will continue but the
time has been adjusted down to 80 minutes per week from 120 minutes,
recognising concerns that 120 minutes may be too long for certain residents.
Other changes that had been proposed to complex pain management
(reducing scoring from 6 to 4 points and from 3 to 2 points for certain
procedures such as complex physio treatment) will not proceed. Instead those
proposed changes will be replaced with a one year indexation pause for all
domains of the ACFI in 2017-18 and an additional 50 per cent indexation
pause for the Complex Health Care domain in
2018-19.
Overall the revised package provides the same quantum of saving for
Government while recognising concerns raised by the sector and distributing
the impacts more broadly across the sector.
Providers in eligible rural and regional areas will receive a further increase in
the viability supplement (over and above that announced in the Budget) to
address concerns about the impact on such services of an indexation pause.
I appreciate your open involvement in the consultation process that has been
undertaken and recognise this has been challenging for you. I am keen
though to now see Government and the sector move forward.
I would like to see the debate move now to the longer term work to reform
ACFI so we can develop, together with the sector, a better funding model
going forward. One that provides what both the Government and the sector
desire – a more stable and sustainable funding model. I hope we can work
together to develop a better system that delivers the greater certainty that we
both seek.
From the Government’s perspective it will be important in the interim period,
while the longer term reform work is underway, that funding growth stays
within the current envelope (which allows for funding growth of 2.5 per cent
per person per year). It would not be in anyone’s interests, and counterproductive, to see funding claims increase significantly again and Government
forced to take further action.
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I am interested in your thoughts as to how we best now move forward,
including ensuring that your members understand the need for Government to
take the measures, the need for stable funding growth while we work on the
longer term changes and the best way to engage the sector in the longer term
reform work.
In particular, I am interested in your views on how the government could best
present this revised package of measures to set us up for a positive dialogue
with the sector over the coming months on longer term reform.
ENDS
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