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Wednesday, 16 August 1972
Page: 58

Senator Sir KENNETH ANDERSON (New South Wales) (Minister for Health) - by leave - Honourable senators will recall that on 5th October 1971, in announcing an interim increase of $10.50 a week in Commonwealth nursing home benefits, I informed the Senate that the Government had for some time past been examining the role of nursing homes in caring for the sick aged, their financial position and the extent of Commonwealth financial assistance for all nursing home patients. I also stated at that time that it was the intention of the Government as announced by the Prime Minister (Mr McMahon) to introduce new long term arrangements for nursing home patients as soon as it was practicable to do so. The Government has now finalised its consideration of a comprehensive study of the existing nursing home arrangements, and, as announced by the Treasurer (Mr Snedden) in his Budget Speech, it has decided to introduce some new forms of assistance for patients who require nursing care on a continuous basis. The purpose of this statement is to inform honourable senators of the details of these new forms of assistance and of the conditions which will apply to them.

In order that the Government's proposals may be seen in their proper setting, I will first of all refer to the main issues to which the examination carried out by the Government was directed. Over the past 2 decades, institutional care has undergone important evolutionary changes. At an earlier stage of development, chronically ill aged persons who could not be cared for at home were generally admitted to public hospitals. This practice still occurs to some extent, but with the rapid development of nursing homes, this type of institution has come to be recognised as the avenue for caring for the chronically ill and sick aged who do not need treatment for an acute condition in a general hospital.

Since 1959, the number of nursing home beds in Australia has grown from 16,500 to over 51,000. Whilst this steep growth has not been without its problems, it must be borne in mind that, without an expansion of this kind in the availability of nursing home accommodation, chronically ill aged persons would either have not been adequately cared for or would have represented a considerable and perhaps an impossible strain on the State public hospitals system. It is largely because of the widespread development of nursing homes that the adequacy and standard of hospital and nursing home care of aged persons achieved in Australia compares more than favourably with that of many other countries. However, the provision of nursing home care is not a static activity, and never can be. There are differentials in charges, and services and indeed in facilities provided for patients both within and between States which make the task of ensuring that nursing homes achieve their prime purpose of maximum patient care a continuing challenge.

The aspects which have concerned the Government in its approach to this problem are 4 in number. Firstly, the fact that some old people are admitted to nursing homes when there is no real medical need for them to go into a home. If such persons were cared for in their own homes or other residential accommodation, their peace of mind, and consequently their overall medical condition, would be far better. Professional advice made available to the Government, both departmentally and from independent sources, is almost unanimous that elderly people should be encouraged to remain in their domestic environment, as long as they are able to do so. Secondly, the financial hardship being experienced by some patients and relatives in meeting the fees charged by nursing homes. Allied to this are the financial difficulties faced by many religious and charitable nursing homes which have recognised the inadequate financial resources of many of their patients and have charged them fees below the cost of the service. Thirdly, the fact that nursing home patients are accommodated in homes varying considerably in size, services provided, standard of accommodation and cost. Of the 51,000 nursing home beds at present available, 19 per cent are in homes conducted by State governments, 27 per cent are in homes conducted by religious and charitable bodies, and 54 per cent are in homes run by private proprietors. Fourthly, the need to incorporate conditions into the nursing home arrangements so as to ensure that benefits which are intended to provide financial protection for patients do, in fact, achieve that objective.

These matters have been thoroughly examined by the Government. I assure honourable senators that this review has been motivated by our determination to find the very best means of providing the chronically ill aged members of our community with the nursing care and other facilities they need, coupled with the financial protection that we all wish them to have. The new comprehensive plan now being introduced involves a series of essential points which are directed to providing encourage? ment for aged persons to remain in . their own homes as long as they are able - to secure the nursing and other care they need in their homes. At the same time, the plan is designed to ensure the continuance of nursing homes as a recognised form of institutional care, particularly for chronically ill aged persons who can no longer be adequately cared for in a domestic environment.


The first part of the plan provides for the introduction of a new domiciliary nursing care benefit to be paid to a person who accepts responsibility for the provision iti his own home of professional nursing care and supportive services required by an aged relative on a regular and continuing basis. This benefit will be at the rate of $14 a week. In general terms it will be payable to persons who are willing and able to care, in their own homes, for aged parents or immediate relatives who would otherwise qualify for nursing home benefits. This benefit will not be subject to a means test. It will be payable under the National Health Act and it will be paid in addition to any entitlements that persons may have under the Social Services Act for pensions or other supplementary allowances under that Act. There has been a significant increase in the pension rate and there are supplementary allowances which will be known to honourable senators.

The basic criteria for payment of the domiciliary nursing care benefit will be that the aged person's own doctor certifies and a departmental medical officer approves that the aged person is in need of professional nursing care equivalent to that which he would receive in a nursing home; that the domestic situation is such that this nursing care can be and is being satisfactorily arranged; that the person receiving the care is aged 65 years or over; and that the medical condition requiring the care is of a continuing nature. The introduction of this new benefit is a tremendous step forward in the Government's health and welfare programme. Besides being of inestimable help to the many individual families concerned, it will serve a most valuable purpose in encouraging persons to care for aged parents or other relatives in their own homes whenever it is considered that such care in the domestic environment would best meet the needs of the aged person concerned.


The Government recognises that the introduction of this financial benefit needs to be supplemented by continuing measures to develop the availability of home care services required by aged persons. My Department has been operating a home nursing subsidy scheme since 1st January 1957. As announced by the Treasurer in his Budget Speech, the Government has decided to increase the subsidies payable to eligible home nursing organisations with effect from 1st September 1972. Under the new rates, subsidies payable to organisations established prior to the commencement of the scheme will be increased from $3,200 to $4,300 per annum for each additional nurse employed on home nursing. For organisations established since 1956 the rate will be increased from $1,600 to $2,150 for each nurse employed.

I assure the Senate of the Government's determination to develop this scheme to assist the splendid organisations engaged in the provision of home nursing services to continue and, where possible, extend their activities. There are other home care services that are being developed by the State governments, with some financial assistance from the Commonwealth. Some of these home care services are welfare measures in which the Commonwealth's role is the responsibility of my colleague, the Minister for Social Services. I can tell the Senate that the Government has decided that there should be further discussion with the States on these matters.


Whilst taking these initiatives in the fields of domiciliary nursing care and home care services, the Government has at the same time developed plans for improving the situation of present and future patients in nursing homes. I will now describe the proposed new nursing home arrangements in some detail. In so doing I must make clear that all these proposals will be subject of amendments to the National Health Act which will be brought before the Parliament during this session.


As honourable senators are aware, the Government already provides significant assistance to all nursing home patients by way of nursing home benefits. For some years the rates of nursing home benefit were $14 a week for ordinary care patients and $35 a week for intensive care patients. From 21st October 1971 these benefits were increased by $10.50 a week, taking the rates to $24.50 a week for ordinary care patients and $45.50 a week for intensive care patients. These benefits are provided without the need for contribution to a health insurance fund and without a means test. However, surveys of nursing home fees conducted by my Department have shown that increased financial assistance is now necessary in order that the patients may be able to meet nursing home fees without hardship. Having examined the information available to it regarding the levels of nursing home fees, the Government addressed itself in the first instance to the situation of pensioners. Eighty per cent of nursing home patients - that is, of the 51,000 - hold pensioner medical service entitlement cards. The surveys made have shown that there is a gap of up to $30 a week between nursing home benefit entitlement and nursing home fees commonly charged. In some high cost nursing homes the gap is even wider. Many pensioners have had only their pensions and supplementary assistance from the Department of Social Services, say a total of $20 a week, to meet the gap created by these fees. It is all too clear that for many patients it has been possible to meet these fees only with assistance from their relatives or some other source.

As a general rule, the nursing home is the place of residence of the patient, and a pensioner patient in a nursing home applies a substantial portion, and often virtually all, of his pension towards the cost of his care. It has been decided that an amount equal to three-quarters of a single pensioner's pension and supplementary social service allowances will be the patients participation in the new nursing home arrangements. The amount so arrived at is $18 a week. This will be the amount which all pensioners will be expected to contribute towards the cost of their nursing home care. In the case of single pensioners, it will leave them an amount of $6 a week out of their pension for their personal needs - the only exception to this will be in the case of pensioners in the very high cost nursing homes whose fees will not be fully covered by the new nursing home arrangements, and indeed, in my view, could not reasonably be covered by any government assistance plan. Having thus arrived at a patient participation of $18 a week, the Government proceeded to determine the rate of the new benefit necessary to enable patients to meet fees in nursing homes up to a reasonable level. Levels of nursing home fees vary from State to State and the new benefit rate will vary accordingly. The following are the new benefits which will be paid by the Commonwealth on behalf of the pensioner medical service pensioners to nursing homes in all cases where the existing Commonwealth benefit, the patients participation and this new benefit total not less than the fees charged:


This benefit will be the same for ordinary care patients and intensive care patients. Honourable senators will note that the rate will "be the same in New South Wales, Queensland and Tasmania, that slightly higher rates will apply in South Australia and Western Australia and a much higher rate in Victoria. These rates are a reflection of the varying levels of fees applying in each of the States. In order that honorable senators may examine how these new benefits will affect the position of patients in nursing homes, I will now give some examples of the application of the new system. The examples I will give are limited to the situation in New South Wales, but I assure the Senate that the same sort of situation will apply in each of the States. Subsequently, if need be, I will produce documents setting out various examples in other States. The first examples are of an ordinary care patient in New South Wales who is being charged a nursing home fee of $53 a week and of an intensive care patient who is being charged a fee of $74 a week. Their situation as at now and under the new arrangements will be as follows-

Senator Byrne - Could the subsequent tables be incorporated?

Senator Sir KENNETH ANDERSON - I did not say that I had them. I said that if need be I will produce them.

Senator Byrne - Could they be incorporated?

Senator Sir KENNETHANDERSONThe honourable senator is interrupting my theme. Could he speak to me about the matter afterwards?

Senator Byrne - I thought I would save the Minister reading the tables.

Senator Sir KENNETH ANDERSON - I want to read them because they are the whole basis of my statement. They are significant, as the honourable senator will appreciate. The first table is:


In quoting these examples, I draw honourable senators' attention to the fact that, in the cases quoted, there will be a reduction of $10.50 a week in the payment to be made to the nursing home by the patient or by someone on his behalf. In these situations a single pensioner will in future retain $6 a week out of his pension for his personal needs after meeting his nursing home fees.

My next examples are of an ordinary care patient in New South Wales who is being charged a nursing home fee of $48 a week and of an intensive care patient who is being charged a fee of $69 a week - S5 a week less than in the first example. Their situation as at now and under the new arrangements will be as follows:


In these examples, the patient will likewise have his participation substantially reduced. The new benefit in these cases will be $5.50, because that is all that will be required to meet the fees after the existing Commonwealth benefits and the patient participation have been taken into account

The third examples are of an ordinary home fee of $58 a week and an intensive care patients who is being charged $79 a week - $5 a week higher than in the first example. Their situation as at now and under the new arrangements will be as follows:


The surveys conducted by my Department have established that this home is in the high cost bracket. The patient will secure an improvement of $10.50 a week in the extent of his participation, that is, a reduction from $33.50 to $23 but because this is an unusually high cost home he will have to find himself more than the $18 normal patient participation. I emphasise again that these examples are not specially selected to apply to special situations. They are representative of the situation as a whole and illustrate what will be the effect of the new arrangements in all States of the Commonwealth.

Pensioners who hold Pensioner Medical Service entitlement cards need not join a hospital benefits fund to be eligible for these new nursing home benefits. Benefits of the amounts I have quoted in each State will be paid direct to nursing homes on behalf of pensioners by the Department of Health. The benefit rates will be reviewed from time to time to reflect changes which must be expected to occur in the fee levels prevailing at different times as the result of increased costs.


For nursing home patients who are not pensioners holding Pensioner Medical Service entitlement cards, it has been decided that the hospital benefit insurance system will be extended so as to provide nursing home benefits for members. The nursing home benefits for members of hospital benefits funds will be exactly the same as the benefits provided by the Government for pensioners as stated earlier, namely, New South Wales $10.50 a week; Victoria $22.40 a week; Queensland $10.50 a week; ;South Australia $14.00 a week; Western Australia $11.20 a week; and Tasmania $10.50 a week.

It has also been decided that the patient participation for members of hospital insurance funds will be exactly the same as for pensioners, namely $18 a week. Consequently, the insurance fund benefits will be determined in exactly the same way and will have the same application to fees as the examples I gave earlier in relation to pensioners. Initially, these benefits will be financed by registered organisations out of their reserves. That is the point I made earlier. Therefore, no adjustments to hospi tal fund contributions are necessary at the present time.

Nursing home patients who do not hold Pensioner Medical Service entitlement cards and who are not already members of registered hospital benefits funds will be allowed 2 months from the commencement of the new arrangements in which to join a fund without serving the 2 months waiting period which normally applies before new members become eligible for benefits. The fund nursing home benefit will be an integral part of the benefit entitlements of each hospital benefits table. The same rate of nursing home benefit will be payable from each table. The contribution payable by each member for hospital benefits will also give coverage for nursing home benefits. It will not be necessary to insure for nursing home benefits separately and there will be no arrangements for securing nursing home coverage without insuring for hospital benefits.


As mentioned by the Treasurer in his Budget Speech, the new nursing home benefits being introduced by the Government will involve a considerable increase in the financial participation by the Commonwealth. Apart altogether from the new benefits, an amount of over $78m will be provided in the National Welfare Fund in 1972-73 to meet the cost of the existing Commonwealth nursing home benefits. This very large sum is being increased by over $9m for 1972-73 and about $22m for a full year to meet the cost of the new nursing home benefits. It is thus clear that the Commonwealth's participation is a very substantial one.

I have also mentioned that the new arrangements will provide for a .participation by patients to the extent of $18 a week towards the cost of their nursing home care, and higher amounts as necessary in the higher cost homes. In this situation I am sure that honourable senators will agree that it is appropriate and necessary that there should also be an increased degree of governmental supervision of nursing homes in order to make the new plan effective.

At the present time, nursing homes must be approved by the Department of Health under the provisions of the National

Health Act in order that their patients may be eligible for receipt of Commonwealth nursing home benefits. It is proposed that each nursing home which desires to continue to be approved under the Act will make a new application for approval. As a condition of the continuation of its approval, each home will have to agree to participate in the new arrangements by undertaking to charge patients fees which do not exceed those normally charged at 30th June 1972, or to which variations have been agreed by the Department of Health.

The decision by the Government to supervise the fees charged by nursing homes was taken after a long and serious study of the considerations involved. As I mentioned earlier 80 per cent of nursing home patients hold Pensioner Medical Service entitlement cards. In a situation where a major part of the cost of providing nursing home care for these patients will be met from Commonwealth funds, the Government believes that it is an essential measure that fees be subject to supervision. Furthermore, the extension of insurance fund benefits to nursing homes would be impracticable without some supervision over fees.

It is intended that the concept of participation by nursing homes as regards fixing of fees, will not have application to nursing homes operated by State governments. The fee charging policies of such nursing homes will continue to be the responsibility of the respective State governments. I would stress at this point that the Government is not imposing a uniform fee system on nursing homes throughout Australia. In recognition of the varying standards applying in nursing homes, each home will be free to continue to charge the normal fees it charged at 30th June 1972.

However, the Government recognises that many nursing homes apply a concessional fee rate to some of their patients and therefore such homes may have a variety of fees depending upon the financial resources of the patient. Some rationalisation of fees will therefore be permitted, but this aspect will be strictly controlled by my Department. The Government recognises that there may be occasions when a nursing home proprietor may be dissatisfied with the fee determined by my

Department which he will be allowed to charge. It is proposed to establish, under the National Health Act, independent Nursing Home Fees Review Committees, in each State, which will be empowered to review the decision of the Department where the nursing home proprietor lodges an appeal. Details of the constitution and powers of these Committees will be announced when the amendments to the National Health Act are introduced.

If a participating nursing home proprietor increases his fees from those applying as at 30th June, or introduces charges for extras, without the approval of the DirectorGeneral of Health, action may be taken to suspend or cancel the approval of the nursing home for receipt of Commonwealth nursing home benefits. In addition to these new arrangements in relation to the supervision of fees charged by participating nursing homes, there will be a modification of existing procedures in relation to the admission of patients to these homes. Under the modified procedure a certificate by the patient's own doctor relating to the patient's medical condition will be the primary basis on which nursing home admissions are approved. This certificate will need to be supplemented by a departmental medical officer's endorsement. Where necessary there will be a process of consultation with the patient's own doctor.

Construction of new nursing homes and additions to nursing homes

Many of the present problems associated with nursing homes have related to their rapid growth through the construction of new homes and additions to existing premises. The uncontrolled increase in the number of nursing home beds over the past few years, particularly in the private profit sector, was of concern to the Government in the course of its review. The Government recognises, however, that the licensing of nursing homes is primarily the responsibility of the respective State governments. The Commonwealth Government will therefore seek the co-operation of the States in the formation of CommonwealthState committees to examine proposals for the construction of new homes, and/or the addition of new beds to existing homes, and to work towards further improvements in standards.


Honourable senators will appreciate from all I have said that the Government is determined to introduce a comprehensive programme to resolve the problems that have arisen for chronically ill aged persons in our community. It will be a costly programme, but I am confident that the dividends will be immeasurable. For the vast majority of our aged community, the burden and fear of crippling nursing home costs will soon be replaced by an orderly system where they can make fair and equitable payments, within their means, for the nursing facilities they need. It is proposed that the amendments to the National Health Act to authorise these new nursing home benefits and arrangements will provide for their introduction on 1st January 1973. The domiciliary care benefits will commence from 1st March 1973.

It is estimated that the new arrangements will involve payment of insurance fund benefits for nursing home patients amounting to $2.20m for 1972-73 and $5.40m for a full year. The estimated cost to revenue of the increased nursing home benefits for pensioners in nursing homes is $9.1m for 1972-73 and $21.9m for a full year. The estimated cost of the new domiciliary care benefit is $4m for 1972-73 and$14.5m for a full year. I seek leave to propose a motion.

The PRESIDENT - Is leave granted? There being no objection leave is granted.

Motion (by Senator Sir Kenneth Anderson) proposed:

That the Senatetake note of the statement.

Debate (on motion by Senator Douglas McClelland) adjourned.

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