Introduction
A confluence of factors is exerting pressure on an evolving aged care sector. A complex operating environment, rising demand for services due to an ageing population and slim profit margins will continue to weigh on a sector undergoing much-needed regulatory reform. 
In addition, the October 2019 Interim Report of The Royal Commission into Aged Care Quality and Safety highlighted systemic quality of care and workforce issues. The Commission’s Final Report is due in November 2020 and is expected to recommend comprehensive reform and major transformation of the sector, noting that “multitudes of inquiries and reviews into the aged care sector since 1997 have had little impact, as successive governments have failed to act on most of their recommendations”.
Background
Regulation and policy oversight of aged care services primarily rests with the Australian Government. The Aged Care Act 1997 (Cwlth) and the accompanying Aged Care Principles are the main regulatory instruments establishing the framework for aged care services. Effective January 2020, the Department of Health’s aged care regulatory functions were transferred to the Aged Care Quality and Safety Commissioner.
The role of the Aged Care Quality and Safety Commission (Commission) is to protect and enhance the safety, health, well-being and quality of life of people receiving aged care. The Commission is the national end-to-end regulator of aged care services and the primary point of contact for consumers and providers.
Total government expenditure reported on aged care services in 2018-19 was $20.1 billion, with residential care services accounting for 66% of the total. The balance was directed to home care, support services and assessments. Most services are delivered by non-government providers, such as private, religious and charitable organisations.
Since 2013, serious risk findings and sanctions have been rare. However, after the Oakden scandal in 2017, which was the catalyst for the Royal Commission, there were 61 serious risk findings and 12 accreditations were revoked in 2017/18. In the last financial year, 9 accreditations were revoked and 168 serious risk findings recorded. Approved aged care service providers receive government funding to provide these services and are required to meet minimum standards as well as demonstrate commitment to continuous improvement in quality of care. As of December 2019, there were 2,728 approved residential care facilities across Australia.
It is therefore important to note that while the incidence of serious risk findings and accreditation infringements is unacceptable for residents who have received poor quality care, the vast majority of aged care residential service providers are achieving accreditation.
Demographic trends indicate there will be ongoing demand for residential aged care facilities, the stability and sustainability of the $20bn+ aged care sector will continue to be strongly correlated with government policy and/or budgetary changes.
With anticipated reform post the release of the Royal Commission’s Final Report and amid the changing regulatory environment, including whistle-blower protection laws, the question for residential aged care service providers is what can they do now to maintain high quality care for their residents while also remaining financially viable? Optimal management of the current coronavirus outbreak adds another layer of complexity for aged care service providers.
Boards of aged care providers are already subject to increasing scrutiny. A holistic risk management framework should provide boards and executive management with the confidence to make informed and effective decisions. Agilient recommends conducting regular operational audits, culture and risk reviews to ensure compliance with the revised Aged Care Quality Standards (Standards).
The revised Standards (effective June 2019) are:
Standard 1 – Consumer dignity and choice
Standard 2 – Ongoing assessment and planning with consumers
Standard 3 – Personal care and clinical care
Standard 4 – Services and supports for daily living
Standard 5 – Organisation’s service environment
Standard 6 – Feedback and complaints
Standard 8 – Organisational governance
Conclusion
For the foreseeable future, there will be heightened focus on enforcing the new Standards. Boards and management teams of aged care facilities will be sensitive to ensuring good governance practices and transparency of performance metrics to ensure these Standards are attained.
Agilient’s highly experienced consultants are available to leadership teams with their organisation-wide risk management strategy. We will partner with you to ensure that appropriately robust frameworks and processes are in place to meet accreditation requirements as you navigate imminent industry reform.
Author: Phillipa Lee, Agilient Consultant
Please also contact us today to discuss ways we can assist you in ensuring your organisation is appropriately prepared for the coronavirus pandemic.