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Review of Pricing Arrangements in Residential Aged Care: Hogan Review.

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Media Release

Ms Julie Bishop MP Minister for Ageing

11 March 2004 JB033/04

Review of pricing arrangements in residential aged care - Hogan Review

The summary report of the Review of Pricing Arrangements in Residential Aged Care has been received by Government and is being considered by Cabinet in the context of the 2004-05 Budget.

Eminent economist Professor Warren Hogan was commissioned to undertake the Review, one of the most expansive and detailed reviews of residential aged care ever produced. It identifies significant challenges facing the residential aged care sector and the Australian Government is considering a range of recommendations which are designed to help meet the present and future care needs of older Australians.

The Review complements the Australian Government's focus on our ageing population, which is addressing issues such as retirement incomes, continuing our workforce productivity, and the need to deliver affordable, equitable, flexible high quality aged care.

Professor Hogan's report is the result of extensive and open consultation with aged care residents, carers, families, staff and providers, guided by Industry and Consumer Reference Groups. The Review received more than 1250 submissions from across Australia, including more than 900 detailed financial reports from aged care providers. It included 270 formal consultations in capital cities and regional centres.

The Review builds on the Government's long term aged care agenda, which is focused on delivering high quality care to older Australians and a clear direction for a sustainable industry.

In its 13 years of Government Labor neglected aged care, left office with a 10,000 aged care place shortage, failed to introduce national legislated care standards and refused to act when an independent report found nursing homes delivering poor quality care.

In contrast upon coming to office the Howard Government introduced an extensive program of reforms to improve aged care, including;

● doubling funding for aged care from $3 billion in 1995-96 to $6 billion this financial year;

● allocating more than 55,600 new aged care places, well on the way to delivering on our 2001 election commitment

of 200,000 places across Australia by June 2006; ● providing an 823 per cent funding boost for Community Aged Care Packages to fulfil the desire of increasing

numbers of older Australians who want to age at home - there are now around 30,000 older Australians receiving care at home through the packages; ● delivering a more than 70 per cent increase in the Australian Government contribution to Home and Community

Care services, such as Meals on Wheels and domestic support;

● providing a five-fold increase in funding for the National Respite for Carers Program;

● significant changes to the accountability and regulatory framework for aged care providers, including introducing

the first national legislated care standards and the establishment of the Aged Care Standards and Accreditation Agency to oversee quality assurance; ● a single funding and classification system across nursing homes and hostels, with a focus on directing additional

funds for the care of those with dementia and supporting ageing in place; ● a new system of means-tested daily care fees across nursing homes and hostels to improve the sustainability of aged

care services; and ● extension of the industry's capacity to seek accommodation payments from permanent residents in order to improve

the quality of accommodation.

The report contains a summary of Professor Hogan's review and his recommendations. I expect to receive the final part, which contains more detailed financial and other analyses, shortly.

The future of aged care in Australia will require an ongoing partnership between Government, the aged care industry, residents and their families.

The Review and the Government's response will be central to meeting the needs of Australia's ageing population.

Media contact: Rachael Thompson 02 6277 7280 or 0417 265 289