Up to 15 per cent of home care package funding remains unspent and could be removed from future funding allocations, analysts at StewartBrown are warning consumers and aged care providers.
In the biggest review of aged care package data to date, the analysts found the level of unspent funds remained consistently around 10-15 per cent from December 2015 to June 2016.
“Our view is that government will be looking at the chronic underspend in home care with a view to recouping that difference back into its coffers,” Patrick Reid, Director of Aged Care, Community and Disability for StewartBrown, said.
“A chronic underspend suggests an over estimation of funding need. A 10 per cent wholesale reduction in home care packages nationally is not in anyone’s interests, least that of consumers.”
From 27 February 2017 unspent funds will either go with consumers to another provider or be returned proportionately to the consumer (or their estate) and the government. A bulk of this underspend is government subsidy, Mr Reid said.
“The government still provides the lion’s share of care funding, so changes to the rules should motivate providers to encourage care recipients to fully utilise the funds within their package to address their care needs,” Mr Reid said.
“Strategic and timely spending by consumers on their care will benefit the care recipient with a consequent benefit to providers, as this will make a greater contribution to the recovery of fixed overheads.”
Providers are being encouraged to work proactively with clients to increase the provision of packaged services and reduce the current levels of under-utilisation by being clear with clients what remains in their package.
One approach is to show on clients’ monthly statements the amount of unspent funds, separating out funding to be returned to the client and funding to be returned to the government so people know where they stand, Mr Reid said.