All care, no responsibility.

Two articles in Friday’s AFR, John Hewson’s “Reaping the whirlwind” and Laura Tingle’s “Full of promise but short on substance” (only available online to those prepared to pay) make interesting reading, partly because they are about the same subject, looked at from different perspectives, but mostly because they both point out that the increasingly important aged care dilemma is not being addressed.

My parents are only a year or so away from reaching their ninth decade, fortunately, in the short term, they remain capable of looking after themselves but Dad has some cardiovascular problems that mean he’ll be looking for long term care sooner than later.

We’ve discussed the financial arrangements for getting him into care and have some money set aside for the ‘accommodation’ bond that is required upfront by aged care providers.

Residents may be asked to pay an accommodation payment as a contribution towards the cost of their accommodation. These are some of your contributions towards the costs of providing residential aged care. They represent the fact that your accommodation is now being provided by the aged care provider.

The government expects your aged care home to use these payments to develop and maintain your accommodation, by spending them on furnishings, gardens, building renovations and so on. Only aged care homes that are certified by the Commonwealth government as meeting required standards of accommodation can charge accommodation payments.

Accommodation bonds are like an interest free loan to the aged care home, and the aged care home may also deduct monthly amounts (called retention amounts) for up to five years. This monthly amount is agreed with you when you enter the aged care home.

We’ve looked up the preliminaries, checked out the assessment procedures, noted the necessity for having an ACAT, and have a general understanding of the procedures. Then I read the stuff John Hewson writes about;

“Present prudential arrangements, while monitored, are essentially self regulatory, whereby providers are required to offer a contractual guarantee of repayment to residents, plus submit certified annual statements confirming timely repayment of bonds, capacity to meet refund liabilities and adequate ‘insurance’. However two big risks remain – homes can fail and go into liquidation, therefore being unable to fully meet their bond repayment commitments, or shysters can make off with the cash.”

Now what we’re talking about here is not chicken feed. If you add the Federal Government funding;

“The Federal Government’s total expenditure on ageing and aged care in 2002-03 is estimated to be some $5.5 billion, of which $4.3 billion relates to residential care subsidies.

to the accommodation bonds (user contributions), I see an opportunity for a market failure the size of HIH in the making. Why should we be concerned about the potential for fraud and malfeasance ? It’s the term ‘self regulatory’, which IMO is simply another way of saying ‘she’ll be right Jack’ it’s only taxpayers (and old geezers) money, when the shit hits the fan we’ll organise a $600 million Royal commission to determine we don’t know where the money’s gone’.

As Hewson points out;

“The recently released annual report on the operation of the Aged Care Act 1997 noted that notices of non-compliance were issued against 24 services in 2002-03 for failure to meet their prudential reporting obligations.”

How has the Government addressed the issue ? In the time honoured way of course, change ministers,

“”Now Julie Bishop has become John Howard’s fifth minister responsible for aged care since 1996 …”

And as Laura Tingle writes,

“The only problem is, Julie, those of us who have covered the age care debate in the past recognise the script as bearing a compellingly familiar resemblance to the one delivered ad nauseum by one of your predecessors, Bronwyn Bishop.”

As if the opposition didn’t have enough ammunition arising from the Government’s lamentable management of the health system, it appears that their ‘cup runneth over’ when it come to aged care.

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