Graham Croft refers to the slump in share price of aged care companies. This followed analysts downgrading aged care stocks after the government issued new guidelines.
The budget announced changes to the age care funding instrument, causing providers concern about profits. Some privately owned age care homes responded by charging additional service fees, including ‘capital refurbishment fees’ and ‘asset replacement contributions’. These fees improved profits but did not provide any benefit to residents. The Department of Health has announced that these types of fees contravened the legislation.
So while I agree with Croft that the industry needs serious reform, I don’t agree with his conclusion. The care of vulnerable older people is too important to be left to the free market. In an unregulated environment, these extra charges – up to $18 a day – would have gone unnoticed.
Croft also refers to the high standards set by the government. On the contrary, legislation falls remarkably short of demanding high standards. Unlike childcare centres, there is no requirement for aged care homes to have mandated staff-to-resident ratios. The accreditation and outcome standards also remain woefully inadequate. ‘Consumers’ of age care are often frail. They do not have the capacity to ‘drive’ the residential age care sector.
First published as a letter in The Age on 8 September 2016