Age Care

The recent scandal at the Riverside Nursing Home is everybody's nightmare.

Aged and helpless loved-one being first subjected to kero baths and then being threatened with evacuation to an unknown -- and probably far away -- place with little warning and virtually no choice.

Contrary to popular opinion the problem does not arise from lack of adequate standards or the failure of government supervision or inadequate government funding.

Rather the problem lies with too much control and responsibility being placed in governments and not enough on the nursing home owners and the consumers.

The Nursing home industry is one of the most tightly regulated industries in the country.  Through its control over licensing and funding, the Commonwealth has imposed detailed regulations governing every aspect of the industry including minimal level of services, staffing ratios, medical procedures and conditions facilities.

The Howard Government has mandated a new, more rigorous set of standards which all homes must meet by the end of this year.  The process includes regular audits and supervision by the government.

The Commonwealth outlays on nursing homes are high and growing.  The average government subsidy stood at $32,167 per nursing home place in 1997-98 and grew by 20 per cent over the previous three years.  Government spending on all aged care services grew by 8 per cent a year after adjusting for inflations over the 1990s.

However, the governments micro-management the industry is having perverse effect.

In effort to ensure standard are meet, control use and avoid disruptions, the government tightly controls the number of nursing homes.  This has the perverse effect of dulling the incentive to consumers and owners to maintain standards.  Because entry is restricted, rooms in nursing home are as scare-as-hens-teeth with waiting list in access on averaging of more than a month.  Residents or their carer are, therefore, willing to overlook poor standards to ensure that at least they have a room.  Some owners are willing to maintain low standards, in the knowledge that they will not be closed because of the absence of alternative facilities.

In an effort to insure equity, the Commonwealth tightly controls what the nursing home can charge so that the charges bear no relationship to costs.  As a result the Commonwealth meets 78 per cent of nursing home costs.  The Government also limits the provision of "above standard services" to ensure that all have access to the same standard of care.  These restrictions greatly limit the amount of money available to the industry.  They also has the perverse effect of removing the incentive to providers to do more and limit the ability of the customers or their carers to determine the pattern and mix of services.

The funding constraint will become acute over the next decade.  Demand for services is set to grow rapidly and the cost associated with adopting the new standard is estimated at be around $1 billion.

Although the ability of nursing home residents to affect choice is limited as most are frail and incapacitated, most have active carers who can act on their behalf.  Although most nursing home residents are pensioners and therefore have limited income, many have assets or families that can and should contribute more financially to the cost aged care.

In short, we are going to have to be given and to take more responsibility if avoid the nightmare of poor aged care.

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