complex health care needs lost in aged care funding debate

Complex Care Needs Lost in Aged Care Funding Debate

17 Aug. 2016

by Ken Ridgwell, Outcomes Plus Founding Partner

Chronic diseases are the leading cause of illness, disability and death in Australia. According to the Australian Institute of Health and Welfare (AIHW), chronic diseases account for 90 percent of all deaths.

When we talk about chronic disease we often think of those conditions that are generally understood to be life-threatening such as:

– Cardiovascular conditions (heart disease and stroke)

– Cancers

– Pulmonary disease; and

– Diabetes

These four groups account for 75 percent of all chronic disease deaths.

What is generally not appreciated is that chronic diseases are much wider than these four groups and they often coexist with others to impact the overall health of the individual.

These diseases range from mild conditions such as sight impairment, dental decay and hearing loss, through to mental health issues (particularly depression), arthritis, back pain, respiratory, kidney and musculoskeletal diseases.

The more recent explosion in chronic illness is a result of many lifestyle factors including smoking, physical inactivity, poor nutrition and harmful use of alcohol. Others are simply a product of living longer.

The incidence of chronic disease is a major issue for aged care providers. According to one AIHW study, 78 percent of people aged over 65 had at least one chronic disease, while 50 percent of those who were aged 65-74 had at least five chronic diseases. When we get to over 85 the latter statistic jumps to 70 percent.

The only good news appears to be that death rates for cardiovascular disease and some cancers are actually in decline, thanks to medical advancements.

Impact on aged care providers


One of the factors that seems to be lost on Government in the ACFI funding debate is that every aged care provider is faced with an ever-growing number of care recipients with more complex health care needs. Recently announced cuts to funding for the complex health care domain flies directly in the face of this trend.

In reality, an aged care environment is a far more cost-effective and appropriate setting for people inflicted with multiple chronic illnesses compared to the acute/sub-acute alternative.

The Commonwealth implicitly recognises this logic with the trialling of Health Care Homes announced in the 2016 Budget, yet conveniently ignores the reality as it puts a scythe through the ACFI.

The future


Hopefully, sense may prevail in the future with the most likely outcomes being a reversal of some funding cuts or a change to the funding instrument. In time, it’s probably a safe bet that there will be a combination of both.

The ACSA brokered agreement with Nick Xenophon and the Greens to launch a Senate Inquiry into aged care funding is a great opportunity to explore these questions.

However, for the result to be meaningful, it is essential that the Inquiry not merely address the inequity of the last two rounds of funding cuts.

What is required is also a pragmatic and forward-looking assessment of the real cost of providing care to the increasing, and increasingly complex cohort of aged residents and consumers.  Unless the Department of Health’s long-term funding model is critically assessed, we will simply see round after round of Departmental cuts to ACFI as they seek to contain spending within an unrealistic global budget framework.

About Ken Ridgwell: Ken Ridgwell is a founding partner and principal of aged care management consultancy firm, Outcomes Plus. He is a chartered accountant with significant experience in senior management roles within the non-profit aged care sector. You can view his full list of credentials here.


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