Wednesday, 9 November 2016
That the Classification Amendment (CHC Domain Scores) Principles 2016, made under the Aged Care Act 1997, be disallowed.
Thirteen sitting days remain, including today, to resolve the motion or the instrument will be deemed to have been disallowed.
I move this disallowance motion on the Classification Amendment (CHC Domain Scores) Principles 2016. This is an instrument that has implemented changes to certain scores in the scoring matrix. I am sorry this is so complicated, but for those who are not necessarily au fait with such intricacies this is about aged-care funding. It is about the complex healthcare domain within the aged-care funding instrument; henceforth, I will call that ACFI. This tool is used to fund residential aged care. The changes to the scoring matrix affect the level of funding for the complex healthcare domain for new appraisals or reappraisals of existing residents. The ACFI tool is about how much funding—that is the bottom line—residents in aged care get. It is a tool that looks at all the different issues that need to be addressed while someone is in residential care. The instrument that I am seeking to disallow is around the funding that is available for the complex healthcare domain for a resident in aged care.
The changes to the matrix downgrade two of the categories in the matrix. Ansell Strategic has produced modelling on the ACFI changes for UnitingCare Australia, Catholic Health Australia, and Aged and Community Services Australia. The summary findings provide that the July 2016 ACFI changes will result in facilities receiving $1,890.70 less per annum per resident. I must admit that it is quite complicated, because there are a series of changes that either have been made or are proposed to be made to the ACFI instrument; hence, the referral to the time when some of these change will come into effect. Some of the other changes will into effect in January and at other times. This one came into effect in July 2016. The instrument was registered on 17 May this year, and the changes came into effect on 1 July this year. The changes contained in this instrument will apply until 31 December this year, at which time the new complex healthcare matrix—just when you thought it could not get any more complicated, it has—is set to come into effect.
The changes to the scoring matrix are one of a number of changes, as I said, to the ACFI that were included in the 2015-16 MYEFO changes and also in the 2016-17 budget. Collectively, the changes to the ACFI will cut $1.6 billion in funding from aged care. The modelling by Ansell Strategic shows that these cuts will in reality reduce funding to the sector by more than $2.5 billion or by $6,655 per resident per annum. Many providers and aged-care residents across the country have raised concerns with me about the impact that these cuts through the ACFI will have. Changes to the complex healthcare domain will impact on people suffering from chronic pain, degenerative diseases, severe arthritis and complex wounds. UnitingCare Australia has said of the cuts:
The changes will put increased pressure on the public hospital system if the viability of residential aged care service providers is threatened …
They were also very concerned about the disproportionate impact on services in regional and rural Australia.
The Senate is also conducting an inquiry through its Community Affairs References Committee into the aged-care workforce. When we talk about the aged-care workforce the ACFI cuts come up, because they have direct implications for the workforce. Again, I am not seeking to pre-empt any of the findings or anything like that from the workforce inquiry that I am chairing and that Senator Polley, who will be speaking shortly, has been very active on. Some issues in that inquiry have crossed over, as I said, to ACFI, because workforce issues relate in part to funding. While we have been holding that inquiry, this issue has come up. I would like to read what some of the witnesses have said in that inquiry. Just last week in Tasmania—
Yes, we were in Launceston. Ms Murray, an aged-care worker, was a witness at the inquiry. She told us of her experience:
At my facility, when those cuts came we lost three hours a day of nursing hours . For the 98 residents that we are required to oversee on every shift—one RN per 98 residents, every shift—we now have 15 minutes to hand over—
This is when shifts change and they have a period of time to talk about each patient to the new shift coming on. That was explained to us during the process—
we used to have additional time—for two RNs to get together for complex problem solving. I am not aware of the exact figures on how many hours for enrolled nurses were lost but there were a few as well as the ECA. The whole roster has recently been restructured so that the care workers' hours have gone down quite a lot. At the end of the day, this impacts on the time that the registered nurses have for doing wound care and, as mentioned previously, residents waiting for the bells to be answered and things like that from the ECAs.
I could spend the whole of my time talking about the evidence that we received from people during the inquiry about the impact of the funding cuts.
When Ansell Strategic was doing their survey and analysis, some of the quotes that they received regarding people's concerns about these cuts included: 'As we approach person-centred care, we would like to be able to continue to provide holistic care for our residents and continue to do what we have always done. However, we are required to strategically think and structure our facility to remain viable in the future. The funding changes are likely to cut care hours.' In fact, we just heard that they have and, of course, future cuts are likely to cut them even more. Another comment that was made was: 'We'll be sending more residents to hospital and not providing complex treatment in their own environment. We will reconsider admitting potential residents with complex needs.' Another was—and this came up during our most recent inquiry as well: 'Our physiotherapy program is the core of our Living Longer Living Better initiative for our residents. To cancel this program would be catastrophic for our residents, impacting pain management, mobility, independence, continence—to name just a few unacceptable outcomes.' Another was: 'My major concern is the viability of our small rural residual care facility in the future with these ongoing cuts. We are not a large care provider and, if we are forced to close, our small rural community would have to send their elderly away from the district, community support and family.' You get the picture. People are deeply concerned about the impact of these cuts.
Ad hoc tightening of ACFI is about government saving money and not genuine reform. These cuts will hurt some of the most vulnerable older Australians in care. The sector has also raised concerns about the lack of consultation and transparency in the cuts that the coalition plans to make to aged care. These concerns highlight the need for a full cost-of-care study, which the sector has been calling for for a long time. Such a study needs to be fully consultative and engage with the sector. At Senate estimates there was evidence given regarding the government's recent consultation through the sector, notably after the cuts had been made. They are more about the cuts that were in the 2016-17 budget. Also, they talk about the need to start sharing some of the modelling that relate to the ACFI cuts. This is welcome news. However, given the quantum of the savings that is not up for discussion, the quality of care and the availability of care into the future will still be compromised because, as I said, what is being discussed is not all of the cuts that are being made to ACFI.
At this point I would like to put on record my disappointment that, in fact, we have not been able to have an inquiry into the ACFI funding instrument and the cuts that are proposed. I think that is a particularly important thing that we should be doing. One of the 2016-17 budget measures—specifically the halving of indexation for the complex healthcare component of ACFI—has been implemented through the Aged Care (Subsidy, Fees and Payments) Amendment (July Indexation) Determination 2016. That is a separate instrument that we could have tried to disallow. We purposely have not as that instrument included indexation to the activities of daily living and the behaviour domains of ACFI, and we did not wish to disallow that particular instrument, although part of it has had a negative impact.
One of the related MYEFO changes—specifically the strengthening of compliance for residential care funding at a saving of $61.9 million over four years—was passed with a tranche of other measures in the Budget Savings (Omnibus) Bill 2016. However, today senators in this place have an opportunity to disallow the changes to the scoring matrix for the complex healthcare domain within the aged-care funding instrument, ACFI. I would encourage you to please consider doing this. Australia's population is ageing and we need to make sure that we are providing quality care for older Australians. We need to develop innovative and creative solutions to the challenges but ensure that we are providing proper funding and enough funding to meet the needs of older Australians into the future. We do not want to see the level of care being provided to residents with complex healthcare needs suffering due to the government's changes to the scoring matrix. The government's cuts are going to hit the sector hard and are hitting the sector. We have evidence around that from the Senate inquiry that is looking into the workforce, as I mentioned earlier. This adds further uncertainty to the sector. These cuts have not been properly scrutinised and they are going to have an effect.
Rather than taking a swing at the aged-care funding instrument, the government should undertake a full cost-of-care study and proper review of ACFI. Nobody is denying that ACFI should not be reviewed. It is a complex instrument. It has been in place for quite a long time and it is due for a review, but do not do that on an ad hoc basis. This would inform funding decisions into the future. The government are currently talking to the sector. That is too late. They should have been doing it beforehand. They still have not handed over all the documentation and the modelling upon which they have made their funding decisions—in particular, the cuts that were going to be made through the 2016-17 budget. Although the government are prepared to look at other measures instead of further cutting and further changing the complex healthcare domain, there is still the same quantum of cuts, so that funding still has to come out of aged care. There are a number of alternative approaches they could have taken. They chose not to. This instrument does affect patient care. We do not think it should go ahead. We think the government should be taking a different approach. They should be more consultative and develop a process that will see the sector viable and sustainable into the future, not suffering cuts every couple of years when the government decide they want to make some funding available for something else. We do agree with the government that we do need to make sure that we are spending money wisely. There is no doubt about that. We do agree that ACFI has probably outlived its usefulness and needs reform. We think we also need a cost-of-care study to understand what the true costs of care are.
We urge the Senate to support this disallowance motion and to continue to work with government to find a way forward for the reform that is agreed across the board we still need to see. Even though we have seen changes to Living Longer Living Better, which have made significant progress, there is still more reform that needs to be done, and that includes looking at the ACFI instrument and how that can be reformed. I urge you to support this disallowance motion.
Labor remains concerned about the ongoing predictability and sustainability of the funding of residential aged care in Australia. We believe that older Australians, having worked hard and contributed to our nation for decades, deserve dignity and security in their older years. We believe that all older Australians deserve access to the high-quality care and services that we would wish for our own loved ones. It is because of this belief that, when last in government, Labor delivered the biggest reforms to aged care and ageing policy in a generation.
Through the Living Longer Living Better aged-care package Labor provided a ten-year plan to build a better, fairer, more sustainable and nationally consistent aged-care system. Labor laid a strong framework to build the aged-care services that Australians deserve, and progress was being made. Progress was being made at delivering choice, easier access and better care for older Australians, their families and carers. Progress was being made in conjunction with the aged-care service industry to grow a highly trained workforce that could respond to the dramatic growth in our ageing population.
Labor's commitment to delivering sustainable care and services that provide quality of life for older Australians is enduring and on the record. Unfortunately the instability and inaction of the Turnbull Liberal government—more focused on its own internal divisions than the needs of older and vulnerable Australians—is threatening the continued progress of these critical reforms and the ongoing sustainability and predictability of funding to provide these services. It is no wonder the government cannot seem to get its act together when it comes to providing for older Australians.
This government cannot seem to even get through 24 hours without stuffing something up. Malcolm Turnbull's government is in complete disarray—mired in dysfunction, chaos and distraction. From the plebiscite bill to the backpacker tax and Mr Turnbull's suite of anti-worker laws, everything he touches he stuffs up. As with the instability of residential aged-care funding, it is ordinary Australians who will be left to pay the price.
The Classification Amendment (CHC Domain Scores) Principles 2016, to which this motion relates, is one of the instruments delivering the Turnbull government's 2015 Mid-year Economic and Fiscal Outlook measures. These measures were allegedly designed to restore predictability to the aged-care funding instrument to bring funding into line with expected growth in expenditure over the forward estimates.
However, less than six months later in its 2016 budget the Turnbull Liberal government cut a further $1.2 billion from the aged-care funding instrument after expenditure again exceeded the government's predictions. It is this lack of predictability that is now causing significant concern for the future of residential aged-care funding and the delivery of high-quality care. This instability within residential aged-care funding means the community simply cannot have confidence that older Australians will have access to the care they need.
This instability also means that aged-care providers have no security, predictability or confidence to invest in the residential aged-care beds we will need to provide for our rapidly ageing population. It is for this reason that Labor committed to an independent review of ACFI, as part of the legislated review of the Living Longer Living Better reforms during the recent federal election. We have followed through with our commitment and introduced the Aged Care (Living Longer Living Better) Amendment (Review) Bill 2016 into parliament to deliver an independent review of residential aged-care funding.
Unfortunately the Turnbull Liberal government has continued to shut out consumers and providers and refused a proper review. Instead of reforming residential aged-care funding in an open and transparent manner, it has hidden the long-term financial modelling for these measures. Instead of talking to consumers, medical professionals, aged-care providers and experts to review and reform the residential aged-care funding, the Turnbull Liberal government has shut out stakeholders and engaged consultants to look at just a small part of the way residential aged-care funding is determined.
The government has been secretive and failed to genuinely consult with the people who are affected by these measures and has shown no concern about their impact. The Minister for Health and Aged Care, Sussan Ley, admitted in May 2016 that she is 'concerned the current Aged Care Funding Instrument (ACFI) model is too complex and not always clear about what can be claimed.' A recent judgment of the full Federal Court found aged-care funding instrument documents are 'riddled with ambiguous, uncertain and inconsistent language' and that they should be reviewed. The aged-care sector has said that a review of ACFI, in the context of growing demand for aged-care services, is long overdue. The Commonwealth Department of Health itself says ACFI is failing. In estimates in October 2016 departmental officials stated that under the Turnbull government ACFI 'does not deliver the stability needed for the sector.' The case for a proper review and reform is clear.
But what we also know is that disallowing the Classification Amendment (CHC Domain Scores) Principles 2016 today will not immediately resolve the instability and uncertainty facing the sector and will not resolve the funding issues created by the government's failure to review and reform ACFI. Rather, this disallowance motion will only further compound these issues by creating even greater uncertainty in future funding.
It must be noted that many providers and peak organisations in the sector, including Aged and Community Services Australia, while expressing disappointment at the government's 2015-16 Mid-Year Economic and Fiscal Outlook measures, accepted these measures at the time because they were targeted and were to deliver predictability. But the sector cannot accept the ongoing instability and unpredictability that the Turnbull Liberal government's mismanagement and lack of action is creating. It is a lack of predictability that inevitably will impact the care outcomes of older Australians and hurt vulnerable people.
Labor has consistently supported the sector in its calls for an immediate independent review and reform of ACFI. This remains our commitment as the only path to a sustainable, transparent and predictable residential aged-care funding model. We stand with the aged-care sector and older Australians in imploring the government to do the right thing and commit to a genuine review and reform to deliver a better funding model now.
We again call on the government to agree to the review of ACFI. It could commence immediately as part of the Living Longer Living Better legislative review that has only just commenced. If senators in this place are concerned and serious about the sustainability of the sector, as Labor is, they would support Labor's moves for a review, not this disallowance motion that will only further compound the instability and uncertainty that this government has created.
The government does not support this disallowance motion. Funding for the residential aged-care sector continues to grow over the forward estimates. The government increased estimated expenditure on residential care by $3.8 billion over the forward estimates in light of higher than expected funding claims. As a responsible fiscal manager, the government announced measures at MYEFO 2015, and in the recent budget, to mitigate, in part, the impact of this growth. Even after these measures, funding for residential care will continue to grow at around five per cent per annum on average over the forward estimates.
This disallowance motion would disallow the MYEFO measures, which took effect on 1 July 2016 and are estimated to save around $800 million over the forward estimates. This would not be responsible fiscal management. Sustainable and stable funding arrangements are in the interests of both government and the sector. The government has announced it is considering longer term reform options to ACFI to ensure sustainable and more stable funding arrangements going forward, and it will consult with the sector in undertaking this work. The department has commissioned the University of Wollongong to assist with this work.
I am disappointed to hear that we will not be getting support from the ALP. I have said in this place before, in relation to the mechanism of legislative review of the bills that they are talking about, that there is no chance of getting that up. It puts it off into the never-never, and we need to be dealing with this issue now. The sector, I understand, has been making a number of proposals to government in order to be able to provide some opportunity and time for longer term measures to be put in place that do address the issue around sustainable funding and develop a sustainable funding strategy for aged care. I think there is agreement around the chamber that that is needed. Where we disagree is the ad hoc changes that are being made and the taking out of so much money from the aged-care sector—in particular out of the complex behaviour care matrix, because of the impact that will have on frail patients.
I am aware that we need to be addressing this issue, because we know people who are going into residential care are much frailer. That means that straightaway when they are going in they need much higher level care. I am not confusing that with the high care and low care that we are moving to get rid of; I mean in terms of the level of nursing care and personal care that is required. That is why the complex healthcare part of the ACFI is so important.
Earlier on, I was quoting from and talking about the Ansell strategic report. That also acknowledges the challenges. It says:
These challenges to providers and Government reflect the change in the physical demands of residents in residential aged care settings and the advancement of home care services in Australia. It is also a reflection of the maturity of ACFI which was introduced over 8 years ago. In combination, the aged care sector is managing an unsustainable system in which:
1. The ACFI mechanism does not accurately allocate resources based on contemporary resident need. This may result in core activities not being funded and creates potential wastage of resources directed towards lower priority activities that do attract funding; and
2. Increasing frailty among the resident population is creating an escalating burden on the taxpayer because of the funding regime which is heavily subsidised by Government.
It goes on to say:
The Living Longer, Living Better legislation has provided some scope to address inequities within the system and facilitate greater levels of contributions from consumers toward their care. However, the increasing resident dependency levels makes it difficult to achieve balance under the current system.
It then says:
The result is that the 2016 Budget cuts will fall directly upon providers of the care, with no avenues to recover the losses from residents, other than cutting their services.
Obviously, decreasing clinical support for residents with escalating complex care needs in not going to be sustainable. The funding instrument and the wider system must now change.
That is what should have been done before they made these ad hoc cuts.
As I understand it, the sector is providing some alternative approaches that involve the government not proceeding with the ACFI changes from 1 January next year. They are making a range of other suggestions. I do not know how the government is receiving them, but, as I said, the upshot of that would be to allow time to develop a sustainable funding strategy where we are not seeing these ad hoc cuts. I would add to that that these cuts should not go ahead, because they are already having an impact, and that the government should start a process that looks at whether they reform ACFI or come up with a whole new instrument. That is obviously going to take some time. Let us not proceed with these cuts that are already having an impact. Let us take some time and develop a sustainable funding strategy for the way forward that actually takes on board the issues I have just been raising, that the sector has raised and that consumers have been raising.
I urge senators to support this disallowance, because we should not be making on the run, every couple of years, ad hoc funding decisions that are not consultative, that cut care and that are going to have an increasing effect because of the acuity of the people who are going into residential aged care and the residents who are in home care, when we start seeing the impact of cuts for other services. It is time that we recognised that these cuts do cause uncertainty. I urge senators to support this disallowance, which will allow time for us to have a much better informed and consultative approach to sustainable funding into the future.