Ageing, Disability and Mental Health Collaborative Panel. Consumer Perspective Project Supply Sides Observation Paper
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1 Ageing, Disability and Mental Health Collaborative Panel Consumer Perspective Project Supply Sides Observation Paper
2 The Consumer Perspectives Project (CPP) is being undertaken by the Council of the Ageing (COTA) Victoria in collaboration with the Municipal Association of Victoria (MAV) with funding support from the State Trustees Australia Foundation (STAF). The CPP forms part of a portfolio of projects developed by the Aging, Disability and Mental Health Collaborative Panel. The Panel was established in 2014 to support collaboration across the aging, disability and mental health sectors as they work though the range of policy and funding reforms taking place within those areas, in particular the introduction of the National Disability Insurance Scheme (NDIS) and the National Aged Care Reforms.
3 Introduction.1 Key market design and supply side observations 6 Eight key challenges / opportunities...10 Conclusions...16 Attachment 1: Implementation pathway for aged care and NDIS reforms...17
4 INTRODUCTION Australia has an aging population. As at 30 June 2015, 15 percent of Australia s population were aged 65 years and over (3.6 million people) and 2 percent were aged 85 years and over (473,000 people). By , it is estimated that over 20 percent of the population will be aged 65 years and over (8.9 million people). In million people aged 65 years or over (36% of that age group) accessed aged care services at some point. 1 In order to have a sustainable aged care service system, demand for aged care must be effectively and efficiently matched to the supply of aged care services, it needs to be affordable to both government and consumers and it needs to provide reliable, quality care that is responsive to consumer needs. Ensuring that Australia has a sustainable aged care system is an ongoing challenge and has been an area of focus for successive Commonwealth and State Governments. 2 Figure 1 - Balancing Australia s ageing population profile, supply, affordability and quality in the aged care sector 3 1 Australian Government Aged Care Financing Authority., Fourth Report of the Funding and Financing of the Aged Care Sector., Canberra., July 2016., P.7. (AGFA 2016) 2 AGFA 2016., P AGFA 2016., P.10. 1
5 The above focus has led to a series of key reforms. As a result the provision of aged care services in Australia is currently going through a period of transition associated with the recent introduction of: National Aged Care Reforms, involving the reconfiguration of how aged care services are funded, managed and regulated at a Commonwealth and State level and The National Disability Insurance Scheme (NDIS), involving the transition from a block funded disability service system to an insurance-based, individually funded system. The above reforms seek to increase contestability and improve access to services and service quality by promoting the delivery of consumer-centred services and increasing consumer choice and control in the supply and delivery of both aged care and disability services. While similar in intent, the Aged Care and NDIS reforms are being structured differently. In the case of the NDIS, consumers are assessed through a specialist assessment function which is responsible for determining their eligibility for government funded support and approving a funding allocation and plan. Eligible consumers are then able to purchase services in accordance with that plan from any registered service provider. They may purchase ongoing case management services as part of that plan, as well as direct services. Prices for services are currently being set based on a regulated schedule of prices. The intention in doing that is to protect consumer buying power and provide market stability during the transition phase. It is planned that the market will move away from a regulated pricing system over time. The National Disability Insurance Authority (NDIA) has overarching accountability for monitoring the effectiveness of the system and supporting the market transition. In the case of aged care, consumers are also assessed to determine their eligibility for support. Initial eligibility is assessed through the centralised, National My Aged Care Gateway (MACG). Consumers deemed to be eligible for services are then referred in Victoria to one of two main funding streams: to the Commonwealth Home Support Program (CHSP) or for Home Care Packages and Residential Aged Care. Eligibility for home care and support provided through the CHSP is assessed through a coordinated Regional Assessment Services (RAS). The RAS identifies the local service providers to provide the supports for which the consumer is eligible. Service planning and delivery are then provided through the selected service provider. 2
6 Eligibility for Home Care Packages and Residential Aged Care are assessed through Aged Care Assessment Teams (ACAT). 4 For Home Care Packages consumers are assessed as being eligible for one of four levels of support. Packages incorporate case management and administration and an allocation of funds to purchase CHSP and other services (the four levels of support have increasing funds attached). 5 The packaged care provider, as part of their case management role, identifies local service providers able to provide the supports for which the consumer is eligible. These services usually include CHSP services but may include other services as well. Consumers can purchase services from any registered service provider based on the package of funding that they have been allocated. The case manager develops a contract with the consumer and then sub-contracts service providers for the delivery of the services on behalf of the client or directly refers the consumer to the alternative service provider. The policy and funding changes associated with the above reforms have had, and will continue to have, a particular impact in Victoria in relation to the provision of aged care and disability services, especially in how community care and package services for older people are funded and regulated. (See Attachment 1 for an overview of the transition pathway for implementation of the My Aged Care and NDIS Reforms.) Local Government has traditionally played a significant role in the planning, coordination, funding and delivery of aged care and disability services in Victoria, particularly social support, home and community care and some involvement in packaged care services. (Local Government has been less involved in the delivery of packaged care which has primarily been provided through local not for profit and some for profit service providers.) Most Local Governments have historically been funded to be the prime provider of both assessment and direct home and community care (now CHSP) service delivery in their region. Only limited funding has been provided to non-government providers, so the number of non- Council service providers delivering home-based community care services such as domestic assistance, personal care and respite services in Victoria has generally been more limited than in other States and Territories. As such, Local Government has played a key role in Victoria both in contributing to the cost of aged care service delivery and in supporting the coordination of community and home-based supports with tertiary and community health services as well as more intensive support services. 4 Aged Care Assessment Services (ACAS) in the case of Victoria. 5 Case management is only available for consumers allocated packages. 3
7 The recent Aged Care Reforms are changing how aged services are funded and also how they are delivered. Access to services is now being coordinated through a central online My Aged Care Gateway. The Gateway is intended to help consumers access and navigate the service system. From a service provision perspective the funding and commissioning of consumer assessment and service delivery functions are also being split, so that those services will be delivered under separate contracts and, it is anticipated, usually through separate service providers. The split between assessment and service delivery functions is intended to support the development and operation of a more open, market-based model. The changes associated with the shift to a more contestable market-based system present both opportunities and challenges for service providers and consumers in terms of ensuring that: An appropriate mix of services continues to be provided at a quality level across all markets and consumer groups Consumers are well informed and positioned to influence service provision and exercise genuine choice and control in relation to the type and provision of services that they access and The transition to the revised funding and service delivery model is implemented smoothly and does not adversely affect consumers or result in market failure. Considerable work has, and is, being undertaken across all levels of Government to support the market transition associated with the My Aged Care Reforms. Government and the aged care sector more generally have recognised that it is important that service providers and consumers are supported to help make the revised service system work effectively to meet the needs of older community members. The Consumer Perspectives Project (CPP) has been funded by the State Trustees Australia Foundation (STAF) to provide a starting point for a consumer-informed, cross-sector dialogue about how best to support the emerging market-based service system to respond to the needs of older community members. The Project is seeking to help ensure that consumer interests and considerations continue to inform and influence the ongoing development of the service system at both a policy and service delivery level. 4
8 The CPP is being delivered in two parts: Part 1: Supply Side Market Transition Snapshot: has focused on the market design and supply side of the service system. It has involved consultations with Federal, State and Local Government representatives, peak bodies and service providers to understand how the changes in aged care policy and funding are impacting the design and delivery of aged care services and the potential opportunities and challenges associated with those changes in being able to respond to the interests and needs of older Victorian consumers. This Paper summarises the outcomes of that work. It will be used as an input into the second part of the Project. Part 2: Consumer Co-design: will use a co-design process involving suppliers and consumers 6 to explore and support the identification and development of opportunities to aid the development of market-based solutions that respond to the needs of, and enhance liveability for, older Victorians. The co-design process will consider not only those supports that fall within traditional government subsidised or funded support models, but also other services and supports that older community members are prepared to pay for or otherwise contribute to in order to live fully and well. The intention of the CPP is to link supply and demand side research to identify options to strengthen the ability of the service system to understand and respond to consumer interests, preferences and needs. The intention of the CPP is to link supply and demand side research to identify options to strengthen the ability of the service system to understand and respond to consumer interests, preferences and needs. 6 The intention is to focus on engaging with consumer groups to explore what limits people from doing the things they need to do in everyday life; what stops them from doing things for pleasure; what services they use, want to use and want to pay for that will enable them to live a full life. 5
9 KEY MARKET DESIGN AND SUPPLY SIDE OBSERVATIONS Quality market attributes Effective market systems 7 rely on good information. Suppliers need to understand what consumers need and want, and what they are willing and able to pay for services. Consumers need to know to whom and where they can go to find services, how to assess and access them and what financial support (if any) they can draw on to cover the cost of services. Having a choice of service providers and service options is critical both to ensuing that the service system is grounded on consumer choice and control and that there is an element of competition. In the absence of diversity at least in service offering if not supplier, consumers lose their practical ability to exercise choice and become service takers rather than proactive consumers. In the context of social services such as aged care that are primarily funded by Government, establishing a sustainable market price that covers the cost of service provision is critical in order to ensure service quality and maintain market sustainability and stability. Having an appropriate level of market oversight and stewardship to ensure that more vulnerable or higher need consumers are not effectively locked out of the market because they are not as well positioned to engage with the service system or because they are less financially attractive clients and so are not able to access the support that they need is also critical. As a largely government funded market, there is also a need to ensure that there are appropriate quality assurance or regulatory mechanisms in place to ensure that service providers meet minimum standards of care. Emerging market dynamics, opportunities and challenges We have conducted a series of conversations with government, sector and supply side representatives to understand how they see the aged care market developing in Victoria and what opportunities and challenges they see ahead as the service system works through and responds to the recent aged care and disability sector reforms. A number of themes and potential areas for focus have emerged through those consultations that go to the effective development and operation of the market. 8 7 Journal of Australian Political Economy: Special Issue: Contesting Markets., No.68., Summer 2011/12., ISSN We note that the themes identified in this paper are ones raised in the consultations; they have not been independently verified. 6
10 7 Figure 2 Key themes and emerging opportunities for action
11 They include: Information A perceived lack of awareness on the part of older consumers about how they can maintain their health and wellbeing as they age in order to live well and maintain their independence and the opportunity to improve public health awareness to help address that and defer the need for community members to access more intensive aged care supports The challenges faced by older consumers in accessing market information and the need for them to be better supported to access, understand and navigate the My Aged Care platform and service system The need for suppliers to strengthen their understanding of consumer preferences and needs in order to better inform service development and delivery and for suppliers to develop mechanisms to continue to gather and respond to consumer research Choice The limited breadth and depth of the supply side market and associated service offerings in thin or niche markets and the implications that has on consumer choice The entry of new suppliers, including an increasing number of for profit suppliers, into the government subsidised market Concerns about the propensity of larger or (more) well-resourced market entrants cherry picking demand or bidding down prices on a short terms basis in order to win market share, with adverse knock on impacts to established local suppliers and potential power imbalances between smaller (often niche services providers catering for specific cultural or demographic groups) and larger services providers Which is counterbalanced by a view that there are increased opportunities available to medium and small scale service providers in the more contestable environment to access funding previously captured by Local Government and larger scale service providers The potential to broaden out the supply market further (particularly in thin and niche markets) by facilitating the involvement of smaller and sole traders and the potential to better leverage technology to support that The emerging tendency of a number of service providers to focus on the more financial attractive services based on volume and margin considerations and not to invest as strongly in prevention and early intervention or (re)enablement services, raising concerns that the focus on prevention and early intervention services will decline over time Observations that there is not dedicated funding to support prevention and early intervention services to offset that The emerging tendency of a number of service providers to adopt standardised, transactional service offerings rather than provide more customised, wrap around style support services in order to manage funding constraints 8
12 Price The inadequacy of some CSHP and NDIS government funding schedule items to cover service costs The (ongoing) failure to adequately cover travel costs, particularly in regional and remote areas The potential for service providers to better leverage technology to improve operational efficiency and reduce costs The often high (and constraining) costs associated with implementing revised IT systems and application platforms Stewardship Concerns that the shift by government away from a more actively managed service system may reduce the ability of the system to meet the needs of particularly vulnerable or regional and remote consumer cohorts and / or compromise the level and quality of care provided to consumers The potential risk that service provision will become more siloed or fragmented if Local Government involvement in aged care assessment and service delivery, planning and coordination is reduced The importance of making sure that market data is captured, quality assured, analysed and shared appropriately to inform appropriate service system development and funding at a national, regional and local level The risk that more vulnerable consumers will not be able to access the services that they need because they lack the ability to access and / or navigate the service system The risk posed by the decision to no longer allocate specific packaged care provisions to designated equity groups The need to continue to support suppliers to transition into a more contestable market Quality assurance The need to maintain a focus on quality assurance and extend existing regulatory frameworks to include smaller scale service providers and sole traders 9
13 EIGHT KEY CHALLENGES / OPPORTUNITIES Eight key challenges or opportunities that came through strongly as areas warranting particular focus are outlined below. 1. Improve public health awareness and maintain investment in prevention and early intervention services In recent years focus has been placed on making sure that older community members have access to a continuum of care that can help them to live and age well, covering primary and tertiary health services, community based prevention and social support, early intervention and (re)enablement services, as well as more intensive home and residential care services. Figure 3 Continuum of care helping older community members maintain independence Primary and tertiary health services Community based services and social support Home based support Community health services Packaged care and intensive support services Residential care Prevention Early intervention (Re)enablement More intensive support Some of the stakeholders that we spoke with noted that there appears to be a lack of awareness on the part of many older community members of steps that they can take across their life to best positon them to live and age well, as well as a tendency on the part of some service providers to shift away from prevention and early intervention services and invest more in the provision of more financially attractive intensive support, packaged care and home and residential care based services. Some service providers highlighted that they thought that there was a need to invest more in promoting public health awareness, as a means of supporting the overall health and wellbeing of the community and deferring the need for community members to access more intensive support services and also as a means of encouraging the service system to provide services across the full continuum of care from prevention to intensive home and out of home based care. 10
14 2. Support consumers to better understand, access and navigate the service system The establishment of the My Aged Care Gateway and the adoption of it as a common online and telephone service entry point to the aged care service system was also identified as raising a number of concerns. The My Aged Care Gateway is seen as putting up a barrier to entry for many consumers. Where consumers do make it through the Gateway, consumers do not appear to be being supported to navigate the service system effectively. Peak bodies and service providers noted that for many older Victorians the use of an online system is foreign and difficult to navigate. Many older consumers do not have the information, confidence or capability to access and navigate the online system and so either do not access the system or are reliant on others for support to do so. While it was noted that this may change over time because younger generations are more technically savvy, reliance on the online Gateway is seen as posing real and serious issues for many consumers. For culturally diverse people language was also identified as often being a particular barrier. Examples were given of circumstances where, having registered to be assessed through the online Gateway, consumers were not engaging with assessment staff when they called to follow up with them because the consumers misunderstood the process and thought that the callers were telemarketers. Stakeholders noted that consumers often appear to have a poor understanding of what service options are available to them. They also noted that there appeared to be a tendency on the part of many older community members to understate their support needs, influencing the way that they are directed through the assessment system. Some stakeholders also noted that once assessed, consumers do not appear to have ready access to information or a supporting mechanism to help them to access, assess and choose between different service providers and so from a practical perspective they often lack the ability to exercise genuine choice when selecting a service provider or service offering. Indeed, some of the suppliers that we spoke with noted that they thought that some suppliers were nominating to support clients who, having been assessed had been registered on the My Aged Care system for support, in cases where the supplier was not necessarily optimally located or positioned to provide support to that client. 11
15 They observed that suppliers were not required by the system to demonstrate that they were well suited to meet the needs of the client and that the lack of information available to clients meant that they were not always well positioned to determine this and seek alternative support. They also noted that the above factors could (and potentially were) leading some service providers to nominate to support clients with a view to capturing as broad a client base as possible without taking into account fully their capacity to service those clients appropriately. Stakeholders observed that what impacts vulnerable consumers also has an impact on their carers (where they have one) and that the increased complexity associated with navigating the service system was often putting more pressure on family and friend carers to provide assistance. A number of the stakeholders that we spoke with highlighted the need to better support consumers and their carers, particularly more vulnerable consumers, to enter and navigate the service system. Some noted the potential benefit in supporting the emergence of independent information and intermediary services to support that. Some stakeholders also noted that attention should be paid to the role that is able to be played by consumer advocacy services in order to make sure that consumers are able to access individual advocacy support when they need it. Some stakeholders also highlighted the difference between the support that consumers can potentially get under the disability versus aged care systems and noted that there was a need to better explain the difference to consumers so that they could make informed choices about which service system to access in order to best address their needs. 3. Ensure more vulnerable consumers are not practically excluded from access to services Significant concerns were raised about the risk that more vulnerable consumers would be disadvantaged and may not be able to access services because they lacked the capacity to engage with the My Aged Care system. The move away from having a proportion of care package funding reserved for particular equity groups was raised as being a particular source of concern. A number of stakeholders noted that they feared that more vulnerable consumers in those groups could miss out on accessing services because of the challenges they face in entering and navigating the service system. 12
16 4. Strengthen consumer voice Stakeholders indicated that there was an imperative to better understand consumer preferences and needs both in terms of how the service system should be tailored to support consumers to enter and navigate the market but also in terms of how services are designed and delivered. Many stakeholders observed that significant investment had not been allocated through the transition to help develop systems to strengthen consumer voice. A number of stakeholders noted that they thought that there was a need to make sure that there were organisations or groups that could advocate for consumers to ensure that their needs were met. They also noted that there was a need to support organisations to develop better skills and capabilities to undertake market research to better understand and respond to consumer needs and preferences. 5. Ensure appropriate service coverage in thin and niche markets that are potentially not as accessible or financially attractive as mainstream and growth markets There is significant diversity across the aged care market, across different geographies, demographics and consumer segments. The supply and demand dynamics across those different markets vary, as do some of the perceived opportunities and challenges associated with them. Figure 4 Examples of different market types: THIN NICHE MAINSTREAM GROWTH Where consumer numbers are low and / or particularly geographically dispersed Where consumers have particular support needs, often linked to their capacity or cultural and / or non- English speaking background Where population levels are higher and tend to be relatively stable or growing more slowly Where population growth is higher and is driving more rapid increases in demand for services In the case of thin markets, such as those in some regional areas and remote areas where consumer numbers are low and / or geographically dispersed, and niche markets, where consumers have particular support needs often linked to their capacity or cultural and / or non- English speaking background, peak bodies and suppliers raised concerns about the depth and diversity of the supply market and the ability to meet demand and allow consumers to exercise choice when sourcing a service provider or service offering. 13
17 There was also concern that future increases in government funding were likely to be directed more towards growth markets and not address potential gaps in service delivery in other lower population or growth areas. Some stakeholders identified that there was an opportunity to explore options to diversify and expand the range of suppliers in the market by encouraging the setup of smaller suppliers and sole traders, particularly in areas such as the provision of basic home and personal care services. The use of technology and applications to help match suppliers to consumers was identified as a potential area for innovation that could support this. 6. Provide adequate market monitoring and stewardship Stakeholders noted that it was important to make sure that appropriate market monitoring mechanisms were in place to identify and respond to key gaps in service delivery in order to mitigate against market failure. While the revised My Aged Care Gateway system has the potential to support the collection of data so that government can monitor both demand and supply, a number of stakeholders have questioned how data will be collected, quality assured, analysed and shared. It is not yet clear to many service providers how data will be used to project local market demand and ensure that funding is allocated in a fair and equitable manner, particularly in relation to more vulnerable groups. Particular concerns were raised as to how the social planning and service coordination role that has traditionally been undertaken by Local Government will be covered under the new system at the end of the current transitional funding period. A number of stakeholders noted that they thought there was a risk that at the end of the current transition period some Local Governments may choose to exit or reduce their involvement in the market or not be competitive in open tenders with other providers because of their cost structures. There were also concerns that coordination funding and service-based pricing levels would be lower and that local governments would end up needing to subsidise service delivery more substantially in order to be able to maintain their current service delivery model. This was counterbalanced by an alertness to the potential reputational risk associated with exiting the market, particularly if that led to transitional or ongoing gaps in service delivery. There was concern that this could lead to a loss of coordination, particularly between health and home and community based support services. Stakeholders also questioned who within the service system would be positioned to advocate at a local market or service system level if Local Government moved away from playing a central planning and coordination role in the service system. 14
18 7. Look for options to improve financial sustainability and continue to support suppliers to transition to a more contestable market Suppliers raised concerns that some of the cost items being used to allocate government funding do not take into account the actual cost of delivering services and are not sustainable. Particular concern continues to exist in regard to the coverage of travel costs, particularly in regional and remote areas. A number of peak bodies and suppliers noted that these costs do not appear to be being fully funded and have observed that is likely to have an impact on the nature of the services that are able to be provided and accessed by consumers in those areas. It was noted that a number of organisations still need to undertake considerable work to (re)positon themselves to operate in a more market-based manner. There is an opportunity to leverage the sorts of support that have been provided to the disability sector to assist organisations in the aged care sector to make that transition. 8. Leverage technology A number of stakeholders noted the need to better leverage technology to help manage down supplier costs, support service delivery and allow consumers to access and assess service options and make informed choices when purchasing services. A number of stakeholder noted that they thought that the adoption of improved IT systems and modern technology platforms and application s would play a key role in the evolution of a more efficient and effective market system. Having said that, many also noted that the high cost often associated with implementing new IT systems and technology platforms was a factor that constrained their ability to best leverage technology. 15
19 CONCLUSIONS Overall the stakeholders that we spoke with were generally positive about the policy objectives transition to a more contestable, market-based service system and the potential that has to improve how aged care services are provided; they see significant potential to better target and deliver services. Having said that, supply side stakeholders clearly have questions about: How to best support consumers to engage with the service system What sorts of supports consumers are looking for as they age and how they want those services to be delivered How to structure their service offering to best respond to consumer preferences and needs and make sure that services are provided in an equitable, accessible and financially sustainable way and How to make sure that, particularly more vulnerable consumers, are not left unsupported. In order to answer those questions there is a need for suppliers to better understand what consumers need and want, which is the focus of Part 2 of this Project. 16
20 17 ATTACHMENT 1: IMPLEMENTATION PATHWAY FOR AGED CARE AND NDIS REFORMS
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