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Wednesday, 13 May 1987
Page: 3115


Mr PORTER(5.17) —The provision of services to care for the aged is a matter of real concern to not only the aged but also the families of aged people. I am sure that most if not all of us appreciate the need to ensure the provision of both care and accommodation for aged people in the community when they are no longer in a position to look after themselves. The real worry that elderly people have is not only that aged care and accommodation is provided but that it will be available when required. It is important that they know that it will be available. Elderly people want the security of knowing that they will be looked after and that when necessary they will be able to afford the care that can be provided. As we become older, minor decisions become major ones; minor problems become major problems, and the ability to cope with everyday decisions and needs diminishes more and more. It is therefore important that the aged in our population be provided with the security of knowing that they will have access to health services and aged care facilities and services when required.

Regrettably, as a result of the Hawke Labor Government's health policies, aged people who rely on the Medicare system can no longer be guaranteed the provision of the health services that they require. The people most seriously affected by Medicare are those on low incomes, especially the elderly on low incomes, who cannot afford private health insurance. They are the people who are on the enormously long waiting lists for public hospital beds. At the moment some 100,000 people around Australia are in need of hospital treatment but are unable to get it under Medicare because they cannot obtain a public hospital bed. The only way that pensioners and other aged people in our community can be guaranteed access to health services is for them to take out private health insurances, to ensure that they can be provided with a hospital bed when they need it.

The Government has argued that Medicare is the most fair and equitable system that we have ever had in this country. Yet, people are being hurt by Medicare, and those most affected are those who cannot afford to purchase private health insurance. One of the reasons why the Opposition is determined to provide the opportunity and indeed encouragement for people to opt out of Medicare and return to the private sector for health insurance is that by doing so we will reduce the demand for public hospital treatment, because more people will have access to empty private hospital beds. The result of that will be that those who rely totally on our public hospital system, such as age pensioners, will be able to get a bed when they need it.

The Hawke Labor Government which purports to be interested in the aged, the poor, the sick and the needy has forsaken them. It has introduced a health system which treats the needy like second class lepers. In chasing votes in the middle ground, Labor has forgotten its roots. It has been blinded by its ideology, and middle and low income families are having to pay the price.

The problem with Medicare is that the Commonwealth Government has endeavoured to control totally the provision of health services. As in the case in so many other areas, government control has resulted in a more expensive, more inefficient service which no longer delivers the goods to those who need them most. Regrettably, undue and inappropriate Commonwealth Government intervention in the provision of health services is matched by the disaster that has followed similar inappropriate Commonwealth Government intervention in the provision of services for the aged. How often do we hear people complaining that they are unable to get into nursing home or hostel aged accommodation? How often have we heard of people having to leave their own home, their friends and their family in order to get into appropriate aged care accommodation which may be available perhaps in another area, if they are lucky?

As a member representing a country elector- ate, too often I am faced with the concerns of families who have had to take their aged parents away from the local town or area to some distant regional centre, or indeed to the city, to find appropriate aged accommodation and services. I should add a rider to that and explain that, under the previous Government, a substantial number of aged care facilities were built throughout my electorate, and no doubt other country electorates, and as a result of the building of those facilities the number of complaints is fewer now than I used to receive. Nevertheless, finding such accommodation is still a problem.

A substantial number of parliamentary and other inquiries have highlighted the failure of our aged care policies. The rot really set in in 1973 when the then Minister for Social Security and present Minister for Foreign Affairs (Mr Hayden) introduced increased government control over nursing home accommodation. In the Fraser years there was a change of direction and, in areas such as mine, a country electorate, not only was funding provided for nursing homes but also there was a move towards providing less expensive and more appropriate hostel care. Even so, at the end of that 12 year period, from 1973 to 1985, reviews undertaken by the Auditor-General and the Standing Committee on Expenditure of this Parliament, and subsequently by a Senate select committee, all concluded that changes needed to be made to the policies of the Commonwealth Government in the provision of nursing home, hostel and home care for the aged.

This legislation significantly changes the funding arrangements for nursing homes. Before coming to the detail of the legislation, I want to consider the overall picture. At present nursing homes are totally controlled and regulated by the Commonwealth Government. Commonwealth approval is required before anyone can build a nursing home and provide nursing home care. Commonwealth approval is also required before anyone can enter a nursing home. Under this legislation, Commonwealth approval is required for people to continue to stay in a nursing home, the Commonwealth sets the level of fees to be charged by the owner of the nursing home and, finally, the Commonwealth sets the level of benefit it pays for nursing home accommodation.

Given this total Commonwealth control over the provision of nursing home beds, it is hardly surprising that it is hard to find anyone who is satisfied with the current arrangements. Those who own and run nursing homes are continually dissatisfied with the level of fees and Commonwealth benefits. Those who are trying to get into a nursing home say that there are not enough beds and that the beds are not where they are needed. Even less surprising is the fact that the cost to the Commonwealth of per bed day expenditure for nursing home care has risen by 606 per cent in the 12 years to 1985, while the consumer price index rose by 233 per cent and average weekly earnings rose by 308 per cent. In other words, the cost of the Commonwealth controls of nursing home beds is far outrunning the CPI and average weekly earning figures.

Given the general discontent with the existing arrangements, the Government's response has been to change the funding arrangements but to keep overall control. I have been asking a more fundamental question: Instead of re-arranging the deck chairs on the Titanic, why does the Commonwealth not consider its role in maintaining such intimate involvement in the provision of aged care? Could it not be better provided with less Commonwealth Government intervention? In my previous role as Opposition spokesman on health, before I became spokesman on family and community services, I visited a number of hospital and aged care facilities. The States have provided for their aged population a range of care that varies according to the needs of particular regions. For example, I recall visiting two towns in Victoria. One had a nursing home of substantial size, whilst a town about 100 miles away relied almost exclusively on domiciliary care for its aged population. That domiciliary care was provided from the local hospital. The range of services provided included transport, laundry, day care facilities, and some meals. That was an extended care service operating out of the local regional hospital.

A great variety of services is provided for the aged between the States and within States. No doubt several factors have influenced the various types of aged care arrangements made, including, of course, the provision of Commonwealth funding in specific limited areas such as capital and recurrent funding for nursing homes and, more recently, hostel care. Given that we rely on the States to provide health care throughout an individual's life, why does the Commonwealth suddenly want to become involved with aged care? Indeed, we could ask why the Commonwealth interferes so significantly in child care. We seem to be concentrating on two ends of the health delivery system, yet we are quite happy to let the States deliver health care for the rest of the majority of people's lives.

Why could not the Commonwealth funds currently provided be provided to the States or to organisations within the States so they could get on with the job themselves, without Commonwealth Government interference and control, thereby better meeting the diverse needs of the local community, as I referred to earlier? I was interested to read that the House of Representatives Expenditure Committee which reported in 1982 recommended the progressive transfer to the States of responsibility for both residential and community care. Although it has taken this government four years to do so, it is now starting to pick up some of the recommendations of that report but it has failed to act in relation to the particular recommendation regarding the transfer of responsibility.

As so often happens, the Australian Labor Party is big on promises but short on action. Its policy speech in February 1983 embraced the Expenditure Committee report saying that fundamental rather than incremental changes were needed. In fact, the Minister for Health said at the time that sweeping reform rather than piecemeal tinkering was required. Four years later we are seeing some changes made to the funding mechanism of nursing homes, but there is to be an increase in the controls, not a relaxation, and, in direct conflict with the recommendation of the House of Representatives Expenditure Committee report, there is to be no transfer to the States.

On behalf of the Opposition, I make it clear that I do not accept that the existing, or indeed the proposed, arrangements will result in the most efficient and appropriate delivery of aged care services in this country. It is time that we looked at whether some radical changes are needed, including a transfer of some of these programs to the States, the deregulation of strict controls that have been placed on the provision of aged care services and the targeting of available funds to those most in need. The Opposition does not accept that the current or proposed arrangements are the answer to the aged care needs of the Australian people. I will look at a range of alternative proposals to ensure that aged care and accommodation is available when it is needed and at an affordable cost.

Under our health policy we will encourage people to opt out of Medicare and take out private health insurance. Under this Government's current aged care policy it would not be possible for a health insurer to offer a new whole of life insurance package. For example, at present it is not possible for a private entrepreneur to build a nursing home and offer beds in that home to those who are prepared to pay the total cost of care in that home. At present Commonwealth approval is required to build the home, a Commonwealth subsidy would be paid for the beds available in the home and the Commonwealth would set the fee.


Mr Hurford —That is just not true. That is absolutely wrong.


Mr PORTER —The Minister for Community Services will have his opportunity. Commonwealth approval is required for the building of a home.


Mr Hurford —Only if it wants to be subsidised. You ought to do your homework.


Mr PORTER —If the Minister talks to his Department he will find out that what I am saying is true. In other words, there is no opportunity for people to provide for their own aged care needs, even if they want to do so, without a Commonwealth subsidy. As I have said, this is an issue that I will be addressing in the weeks ahead.

This Bill provides the mechanism for establishing the standards of nursing home care. It tightens the controls on approvals required both to enter and stay in a nursing home. It totally changes the Commonwealth funding arrangements and the means of setting the Commonwealth approved fees to be charged by nursing home proprietors. It is an extremely complicated and detailed Bill. Regrettably, the demands that the Government has placed on the processing of this legislation highlight the gross administrative incompetence of the Labor Party. Despite the fact that Dr Blewett said in 1983 that if the Labor Party got into government it would make radical changes to the delivery of aged care services in this country, some four years later we had detailed and complicated legislation presented to the Parliament last Thursday night and the Government has indicated to us that it is determined to push it through the House of Representatives today or tomorrow.

In other words, the Opposition, and more importantly the industry, has had only the weekend to look at what are perhaps the most significant changes ever to be made to the funding arrangements of the nursing home industry in this country. The industry has been given a weekend to analyse the technical aspects of the legislation and advise the Government and the Opposition of any concerns it may have. Needless to say I and industry representatives have sought from the Government an extension of time to consider the legislation, but that has not been granted. I know that industry associations have referred the legislation to their lawyers for detailed analysis. It is only when they have a response from their advisers that they will be in a position to address adequately the issues in this legislation.

Whilst I have been briefed by the Minister's office, in particular the Minister's Department, on this legislation, and I sincerely thank the Minister for his co-operation in providing that briefing, in the Government's obscene rush to push this legislation through the House it has not been possible for me over the last weekend to sit down with industry representatives and legal specialists in this field to analyse the detailed formula and other provisions involved in the new funding arrangements. I therefore indicate that we will continue to review this legislation in the next week or so before it is debated in the Senate. If there are amendments that we believe ought to be made, we will move them during the Senate debate.

The Bill introduces new funding arrangements for the nursing home industry. Between 1 July 1987 and 1 July 1991 the cost reimbursement arrangement will be replaced with the phased introduction of standard fees and benefits for nursing homes catering predominantly for the aged. As from 1 July 1987 nursing home fees will be split into two parts. The first part is what is called the standard aggregate module and consists of infrastructure costs-that is, laundry, cleaning costs, food and so on-plus an element for return on investment, or profit. This component is about 45 per cent of the total average nursing home cost. The other component of nursing home fees will be the direct nursing and personal care costs, together with payroll tax and workmen's compensation costs.

For the time being nursing homes will continue to be reimbursed for actual nursing and personal care costs because a new national uniform staffing standard is still to be agreed. But as far as nursing home infrastructure costs are concerned-that is, cleaning, foods and other costs-these will no longer be reimbursed on the basis of costs incurred but, rather, the Commonwealth will pay a fixed benefit of $27.65 per occupied bed day as from 1 July. This figure is what is called the SAM and it represents the average infrastructure costs for all participating homes in 1984-85 and it has been indexed by a weighted average of actual and projected movements in averaged weekly earnings and the consumer price index to give a figure for 1987-88. The $27.65 figure will continue to be indexed on that basis. There is a phasing in arrangement so that nursing homes will have the SAM component of their fees adjusted to the SAM level over a four-year period. The Government claims that the net result of this change is that 65 per cent of participating and deficit funded or non-government nursing homes will benefit and 35 per cent will be disadvantaged. Most of those disadvantaged are likely to be in Victoria, with some in South Australia.

In summary, instead of the Government reimbursing nursing homes on the basis of the actual infrastructure costs incurred by each nursing home, the Commonwealth is moving to provide a set fee for all participating and deficit funded nursing homes across Australia based on the current average cost of providing such services. However, the Bill is not a total package. It covers only the infrastructure costs of nursing homes; the nursing and personal care component is still to be established. In fact, what will occur is that the Government will establish a standard level of care to be provided to each nursing home patient depending on the patient's classification. In other words, a certain number of hours of care will be approved depending on the classification of the nursing home patient, and then the cost of this level of care will be reimbursed to the nursing home on the basis of the State wage awards applicable for that number of hours of nursing and personal care. But, as I have said, that nursing and personal care component is yet to be finalised. Therefore, we are being asked to approve a Bill that is really only part of the total package. I am sure that honourable members listening will now appreciate the point I was making a short time ago when I said that this is extremely complicated and detailed legislation that the Government is rushing through the Parliament.

While the Government has totally failed to confront the most significant issue-that is, why it continues to exercise this total control over nursing homes-it has however offered some explanation why it wants to change the method of funding. It has argued that the current arrangements provide little incentive for nursing home proprietors or managers to contain nursing home costs. In other words, the Government says that the existing reimbursement system, which provides for fee and benefit increases on the basis of cost increases, does not provide any inducement for greater efficiency. In fact, as I understand it, if a nursing home proprietor actually reduces running costs by moving, for example, to a more efficient means of operation, the Commonwealth will reduce the level of Commonwealth benefit and the fees which can be charged in that nursing home. So there is actually a disincentive to improve efficiency-a situation which is not surprising given the general inability of governments efficiently to regulate this sort of private sector activity.

Nevertheless, the Government argues that reimbursing nursing homes on the basis of average cost across the country will provide an inducement for nursing home proprietors to keep their costs under that average level and, in so doing, earn a larger profit. In that respect, this new proposal is a step in the right direction. The Minister has also argued that the changed funding arrangements will reduce the current excessive regulation of nursing homes whereby proprietors have to seek fee increases for virtually every variation in cost and the Commonwealth Department is forever reviewing the books of participating nursing homes. Whilst there is an element of truth in the Minister's argument, his proposal really only replaces one set of regulations with another set. The reduction in the level of regulation is very limited. Just as important is the increase in the level of control.

Another reason for the change, the Government argues, is the inequity in the current Commonwealth per capita benefit among States. For example, the Government says that currently it is paying, on average, $54.60 per nursing home patient per day in Victoria and $35.25 per nursing home patient per day in Queensland. It argues that the costs being reimbursed in Victoria are much higher than in other States and it gives the reasons. According to the Department, the big ticket item resulting in higher costs for Victoria is the use of contracted services. For example, it says that cleaning costs in Victoria are $1.88 per patient per day, whereas across Australia they are 75c. Laundry costs in Victoria are $1.83 and across Australia they are 95c; catering costs in Victoria are $5.02 and across Australia they are $3.17. Return on investment, or profit, in Victoria is $5.75 and, across Australia, the average is $4.03.

There is great debate as to why costs in some nursing homes in Australia are higher than in others. The explanation may be that some nursing homes are contracted services to a greater extent than others or that some nursing homes have higher dependency levels than others. Regardless of the reasons, the Federal Government is saying: `We will reimburse you only on the basis of Australia-wide average costs. Those who are paying more will have to reduce their costs to the average level over the next four years'.

We will be closely monitoring the impact of the Government's proposal on nursing homes. The changes being introduced by the Government in such a highly regulated and tightly controlled market could have a significant impact on existing legal arrangements which were entered into on a bona fide basis under the old Commonwealth rules. For example, an operator of a nursing home might have signed a lease agreement with the owner of the nursing home working on the basis of the existing reimbursement arrangement and now the Government has changed the rules. That could significantly affect the pre-existing legal obligations. The fact that the Government is rushing the Bill through the Parliament without providing an opportunity for adequate consultation with the industry on the actual legislation makes one suspicious that there could be some unintended or, worse, some intended dire consequences of this legislation which the Government is seeking to conceal. Therefore, as I have indicated, we will be closely monitoring the impact of the legislation.

A number of other significant changes are made in the Bill which I shall deal with briefly. In addition to establishing a new uniform national staffing standard, the Government intends to introduce new quality of care and quality of life standards for residents. Once these standards have been gazetted, the Commonwealth, in co-operation with the States, intends to seek to ensure that nursing home proprietors comply with those new standards. The new standards can be enforced by the Minister refusing to provide funding for new residents to a nursing home which fails to comply with the new standards. Alternatively, if a home has infrastructure costs below the new SAM level of $27.65 a day, it will not be paid the higher benefit, under the phasing in arrangements, until the new standards have been met.

In addition, a new nursing homes standards review panel will be established in each State. I understand that the job of that panel is to assist in reviewing departmental decisions to enforce the new standards and, as such, it will be a pseudo-appellant tribunal, or peer review group, for nursing home operators who are dissatisfied with the Department's decision in relation to the enforcement of the new uniform standards. The Government has provided no explanation as to why it should be the enforcing agency of these new standards and why enforcement could not be left to local authorities.

New and additional mechanisms will be established for the approval of applications by people for admission to nursing homes and benefits will be payable only in respect of people who have been approved as requiring nursing home care. In addition, the Minister will have power to determine, in the case of a person who has been admitted to a nursing home, whether that person continues to be in need of nursing home care. If he determines that a person does not need that care and is satisfied that alternative appropriate accommodation is available, he can require that person to leave the nursing home, or at least determine that a benefit be no longer payable.

There are a number of other technical amendments including the transfer of nursing homes catering, principally for aged people, which were covered by the Nursing Homes Assistance Act but which will now be dealt with under the National Health Act. The Bill also amends the Aged or Disabled Persons Homes Act to enable the value of donated land to be counted as part of the matching funds required by an organisation to be eligible for a Commonwealth grant for a home under that Act. The Bill also amends the 1986 legislation to remedy a problem raised by the Opposition last year. (Extension of time granted) Whilst the Opposition will not oppose the Bill, we may well propose amendments in the Senate when we have had the benefit of legal advice on some of the complicated and detailed provisions. In addition, we will be closely monitoring the impact of the legislation.

In conclusion, I want to make some general comments about the provision of aged care services. There is no doubt that the trend in the delivery of such services should concentrate, first, on supporting aged people in their own homes, in their own communities, for as long as it is practicable, given the health and the ability of the aged person to cope in the circumstances. We ought to do everything possible to maintain and enhance the personal freedom and independent functioning of all aged people in their own environment. Assistance should be provided only for those who are in real need. There is, of course, always a danger that those who are called upon to give assistance to those at home will be asked to undertake all manner of tasks around the home which are outside their area of responsibility. For example, I have no doubt that the visiting nurse or people from Meals on Wheels could well be asked to do other jobs around the house, such as fixing leaking taps, cleaning out gutters and so on. Therefore, it is very important to maintain controls on such home and community program, to control costs and to ensure that the Government does not start becoming responsible for household chores which should be undertaken by others. Nevertheless, the Opposition supports the general need to provide a range of aged care services, including home and community care as well as hostel and nursing home care.

The concentration in recent times has been on the upgrading of the provision of home and community care and hostel care rather than nursing home care. That concentration, or redirection, started in the latter years of the Fraser Government and has been continued under the Labor Government. The inevitable result of this change in emphasis is that people will tend to stay longer in hostels and, over time, are likely to require more intensive care. This is likely to lead to further increases in the cost of hostel care. When one considers that the cost per person per week in a hostel is, say, under $80 and the cost per person per week in a nursing home is around $350, it is quite clear that currently there is a significant increase in cost for what may not be a significant increase in care, depending on the level of care provided in the nursing home and the level of care provided in the hostel. These and a number of other issues are clearly in need of attention and will be addressed by the Opposition in reviewing the current arrangements. The time has come to reassess the Commonwealth Government's involvement in the delivery of aged care services. In undertaking that review, I should make it clear that the Opposition has a firm commitment to encouraging and supporting the provision of such services by voluntary organisations, which we believe have a central and vital role to play in the care for the aged.

This legislation constitutes another step down the path of Commonwealth intervention and regulation of nursing home care in this country. In addition to the total control the Commonwealth has over the building of beds, the occupants of beds, the charges to be raised for beds and the benefit to be paid for beds, Labor is now establishing and will enforce new national uniform staffing standards, new quality of care and quality of life standards, a new nursing home standards review panel and new evaluation procedures regarding who can enter and who can stay in a nursing home. All this extra regulation and control is expected to cost $3m next year and $14m in 1988-89. I am not convinced of the need for this total control of nursing homes by the Commonwealth, nor am I convinced of the need for Commonwealth control over the enforcement of standards. I will be looking at a whole new approach to the important issue of the provision of aged care services and facilities which better reflects local community needs, priorities and practices.