The Department of Health has released the University of Wollongong’s report into alternate options for the ACFI model, and while momentum builds for fast change, the Government says nothing will be determined until after the legislative review is complete.

The report outlines five possibilities which include refining the current model, a simplified model with four funding levels and another that would include supplement levels, activity based funding with a branching classification and a blended payment model.

In the report, the UoW researchers, led by Jenny McNamee, have offered recommendations that strongly encourage moving away from the existing funding model.

“The ACFI is no longer fit for purpose. It does not adequately focus on what drives the need for care among this frail population and it no longer satisfactorily discriminates between residents based on their care needs,” the report says.

“One third of all residents are now classified to just one ACFI payment class, with most of the remaining 63 classes being rarely claimed.”

“The structural problem is that the ACFI is additive in design. It contains three scales and multiple questions and sub-questions, with the score from each item being added to give a total score. The higher the total score, the more ACFI funding.”

“This design assumes that each item stands alone and that care needs are met item by item rather than in combination. This is not clinically plausible.”

“We propose a move from the ACFI’s additive model to a branching classification that considers a person’s needs in combination.”

“This branching structure will focus on those resident needs that best predict the level of resources they require.”

“The other structural change we propose is to recognise that a substantial proportion of a facility’s care costs are fixed (at least in the short term) and determined by the number (and not the complexity) of residents in care. The remaining costs are variable based on the needs (complexity) of each individual.

“We therefore propose a new payment model with two elements. Standard per diem (‘fixed’) care payments cover the costs of ensuring capacity and providing the care that all residents receive equally.”

“The variable payment covers the costs of individualised care for residents. This covers the care that some residents receive but not others. Activity Based Funding (ABF) will be the model used to fund this variable component.”

The researchers said that lessons must be drawn from health and other human service sectors in Australia and internationally, including ABF models in the health sector but that aged care does not have a good understanding of how it works.

“While hospital acute and sub-acute care ABF models are not relevant, residential aged care is akin to non-acute health care and this evidence can be used to inform the design of a tailor-made model for the Australian residential aged care sector.”

The Minister for Aged Care, Ken Wyatt AM, has previously indicated that an activity based model is likely to be the most suitable option though he has stressed that industry consultation taking a co-design approach will occur before any final decisions are made.

“If you codesign with people you have a better chance of putting in to place reforms that are sustainable and that people feel as though they have been part of and own,” he told Inside Ageing.

He said the report will go to NACA and the Aged Care Sector Committee for consideration and he will hold roundtables with providers to discuss particular aspects to get a full range of views.

However, the big question remains in what timeframe will the changes occur?

The UoW researchers have put forward a four-staged approach to implementing a new model, which would include refinements to the existing model.

Based on this timeframe, implementation would likely take years given the first two to three stages would require 18-24 months but the Government has indicated it wants things to move faster and has already sourced reviews from at least two financial consultancies that specialise in aged care.

“I think there’s an appetite for it [change] from the sector as well. Because we’ve indexed the instrument, people want certainty,” Minister Wyatt said.

“If we’ve got a report that gives us very strong viable options that gives certainty to the sector and givens certainty in terms of funding to plan long term, then I’d rather us move that forward.”

“Frequently I’ve had aged care providers say don’t take so longif you’re going to do it, do it with us but lets do it in a shorter time frame.”

“In terms of how long it will take will depend on the conversations I have with the aged care sector and the way in which we agree on a codesign process to take this forward.

“I want to do that as soon as we can, but I’m also mindful of the legislative review David Tune is doing. I want to see both of them of complementary because he may come back with some issues that are particular to the fees.”

“There is nothing worse than having a report, you implement it then suddenly a legislative review says we should do this and this.”

“I’d rather see the merging of both activities and then the sector and government to agree to a position that will meet the needs in the future that we can again say that we both own,” he said.

 View the full report here