Putting ‘care’ back at the heart of Australia’s aged care sector

Quality, conduct and regulation in the aged care sector

We live in an era of segmentation, personalisation and separation. Increasingly, people are defined by differences rather than commonalities. There are, however, some areas where standards are so fundamental, that there is almost universal agreement on the importance of getting them right. Aged care is one of these. Every person has parents, family or kinship connections and all of us have experienced the vulnerability of needing care.

For this reason, as failings in the aged care sector in Australia have been revealed, we know two things are true; most people who work in the sector are caring, committed people, who are being undermined by a small minority, and secondly, these failings need to be addressed now, and for good.

What are the challenges?

There are significant changes and challenges facing the aged care sector. Failings in care standards have damaged the reputation of the sector and regulators are trying to keep pace with social expectations. This has resulted in a Royal Commission; underpinned by the newly created Aged Care Quality and Safety Commission and widespread regulatory reform.

Financial sustainability is at risk. Independent analysis suggests that 43% of the sector is operating at a loss. Concerns about how financial pressures will impact on the future of provider organisations, the quality of care being delivered and the working conditions of a staff group already in short supply, are rising.

By 2050, the number of Australians over the age of 65 will have doubled. The ageing population creates both pressures and opportunities for the health and welfare sectors. In order to meet this demand and the increasing expectations of consumers, the way care and support are delivered will need to change dramatically. Ageing well will be seen as a priority – helping older Australian’s live well for longer at home will be key.

The perfect storm

Aged care is facing a perfect storm:

  • As in many other parts of the world, Australians are getting older and this will lead to increased demand for care. Older Australians will face other complications too around physical, social and mental wellbeing
  • Many providers are already unprofitable despite moves to reduce or rationalise costs
  • The Royal Commission into Aged Care Quality and Safety is unlikely to suggest changes that reduce costs
  • Staffing ratios are being challenged by trades unions, and others, and changes in this area could have a significant impact on costs – some estimate as much as $5bn pa
  • Fewer senior Australians are happy to invest in refundable accommodation deposits (RADs) preferring to pay annually – this has an impact on cash available to providers for investment in new property and assets
  • The Government is already spending approximately $17bn a year on aged care. It needs the provider sector to support elderly Australians – and against this backdrop, it will face pressure to spend more to meet both demand and cost increase pressures.
  • Finally, the vexed issue of consumers paying more for their care is becoming an ever increasing narrative
Quality and conduct

The Royal Commission into Aged Care Quality and Safety has (as the name suggests) a significant focus on quality and conduct. The Commission’s initial requests for information from providers focus on complaints and incidents of ‘sub-standard care’ and, critically, what providers have done in response to these. How providers secure quality and act in the right way is fundamental to the Commission’s purpose.

‘Consumer directed care’ or CDC will add to this focus, putting more power into senior Australians and their families’ hands to choose their care provider – a choice that will be heavily influenced by brand, trust and the quality of care provided.

The change prompted by these factors must be lasting and genuine. This is not just about ticking boxes. Quality and conduct are fundamental to the overall nature of care – only by getting them right will providers care for senior Australians as they deserve. Aged care providers need to implement a rigorous approach to understanding their current state and the maturity of their approach to securing, and achievement of, the right levels quality and conduct – and then knowing what to do next and acting accordingly. Providers’ responses to issues, both in the past and in the future, will be critical to the Commission and building trust and brand.

What is good quality and conduct?

Good quality and conduct is demonstrated when an organisation’s behaviours and practices deliver fair and suitable outcomes for customers, employees, suppliers, markets and communities – outcomes in terms of both care and experience . At its simplest, it is essentially about embedding the values and codes of conduct (or ways of working) into everyday practice – doing the right thing even when no one is watching.

What’s next?

The aged care sector is at a cross roads and the status quo is not an option for sector providers – they must change to remain successful, viable and sustainable.

To be sustainable, the sector must address the challenges of quality, regulation and conduct. Providers need to maintain a brand that stands for high quality, safe care and outcomes that matter most to consumers. The announcement of a Royal Commission into Aged Care Quality and Safety has been welcomed – it’s now a matter of building a sustainable, robust and high quality system of care and service for older Australians.


Read more about Deloitte’s approach to assessing and remediating poor quality and conduct in organisations: http://bit.ly/2L6uUUB

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