Guest post: Ryman welcomes the Aged Care Task Force’s report

Ryman Healthcare Australia CEO Cameron Holland.

While there’s lots of detail still to work out, the Report’s recommendations strike a good balance between meeting the immediate needs of operators experiencing serious financial stress and implementing a funding model that’ll help secure the sector’s long-term financial sustainability.

The Task Force has quite rightly identified greater consumer contributions as having a key role to play in tackling the country’s aged care crisis.

We’ve long advocated for a co-contributions model to help alleviate government cost burdens, improve operator feasibility and provide aging Australians with a greater choice of care and accommodation options.

While direct aged care services should always be publicly funded, the accommodation and daily service costs aged care residents currently contribute to on top of that in the form of refundable accommodation deposits and daily accommodation payments and basic daily fees] need to be deregulated.

Consumers, especially cashed-up Baby Boomers who are entering aged care in their droves want the kind of accommodation and services they’ve enjoyed their entire lives, aged care operators want to provide these but aren’t allowed to under the current model.

Through a co-contribution model, government funding would cover care costs, while residents with the means to contribute towards accommodation and daily hotel services that suit their tastes and requirements. Appropriate safety nets for those without means are already part of the current legislative environment and should be protected and strengthened.

At the same time, the co-contribution model will lessen the financial burden on the government and free up funding to meet the care needs of all older Australians.

The report’s recommendation that providers be allowed to retain a small proportion of a resident’s refundable accommodation deposit (RAD) will provide much-needed financial stability to providers, the majority of whom are currently operating at a loss.

The Task Force’s range of recommendations aimed at improving residential care accommodation pricing and funding are directionally very welcome. Specifically, re-indexing the maximum RAD room price, adjusting the indexation of DAP payments, and in the long-term assessing the best way to fund accommodation with a view to phasing out RADs by 2035 if it makes sense, are all practical and well-considered recommendations.

The acknowledgement that the sector requires easy access to alternative forms of capital to fund the development and refurbishment of aged care beds Australia desperately needs is both sensible and welcome.

The aged care challenge we’re facing as a nation is big and complex, and the Task Force’s report is a positive first step towards the underlying structural change we need.

Ryman looks forward to working closely with government as it considers the Report’s
recommendations and develops a policy response.


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