Amazon S3...UNITINGCARE AUSTRALIA - AGED CARE ADVOCACY STRATEGY – MODULE TWO 8 Many of the models...

mailto:[email protected]:[email protected]:[email protected]:[email protected]

https://www.pc.gov.au/research/ongoing/report-on-government-services/2018/justice/corrective-services/rogs-2018-partc-chapter8.pdfhttps://www.pc.gov.au/research/ongoing/report-on-government-services/2018/justice/corrective-services/rogs-2018-partc-chapter8.pdf

https://www.health.gov.au/resources/covid-19-cases-in-aged-care-services-residential-carehttps://s3-ap-southeast-2.amazonaws.com/assets.ansellstrategic.com.au/app/uploads/2020/03/14041018/200329-Urgent-Call-for-Action-FINAL.1.pdf

https://www.pc.gov.au/inquiries/completed/aged-carehttps://www.health.gov.au/sites/default/files/legislated-review-of-aged-care-2017-report.pdfhttps://s3-ap-southeast-2.amazonaws.com/assets.ansellstrategic.com.au/app/uploads/2019/05/14071211/20190130-UnitingCare-Australia-Aged-Care-Data-Project-Module-One-Repor....pdfhttps://s3-ap-southeast-2.amazonaws.com/assets.ansellstrategic.com.au/app/uploads/2019/05/14071211/20190130-UnitingCare-Australia-Aged-Care-Data-Project-Module-One-Repor....pdf

https://s3-ap-southeast-2.amazonaws.com/assets.ansellstrategic.com.au/app/uploads/2016/04/14081654/ARCII_CostingReview_v6.pdfhttps://agedcare.royalcommission.gov.au/sites/default/files/2019-12/research-paper-1.pdfhttps://agedcare.royalcommission.gov.au/sites/default/files/2019-12/research-paper-1.pdfhttps://s3-ap-southeast-2.amazonaws.com/assets.ansellstrategic.com.au/app/uploads/2019/05/14044146/Royal-Commission-Submission-Fixed-Staff-Ratios-in-Residential-Aged-Care-Ansell-Strategic-Pty-Ltd.pdfhttps://www.ansellstrategic.com.au/proposal-for-new-residential-aged-care-funding-model/

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https://treasury.gov.au/sites/default/files/2019-03/2002-IGR-report.pdf

https://agedcare.royalcommission.gov.au/system/files/2020-06/UCH.500.001.0201.pdfhttps://www.health.gov.au/sites/default/files/legislated-review-of-aged-care-2017-report.pdfhttps://www.pc.gov.au/inquiries/completed/aged-care

https://s3-ap-southeast-2.amazonaws.com/assets.ansellstrategic.com.au/app/uploads/2020/03/14041018/200329-Urgent-Call-for-Action-FINAL.1.pdf

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201617/AgedCare

https://treasury.gov.au/sites/default/files/2019-03/2002-IGR-report.pdf

https://www.cota.org.au/wp-content/uploads/2017/11/PC-Caring-for-older-australians-June-2011-Volume-1.pdfhttps://www.cota.org.au/wp-content/uploads/2017/11/PC-Caring-for-older-australians-June-2011-Volume-1.pdfhttps://www.health.gov.au/sites/default/files/aged-care-roadmap_0.pdf

https://www.pc.gov.au/inquiries/completed/aged-care/reporthttps://www.health.gov.au/resources/publications/aged-care-roadmap

UNITINGCARE AUSTRALIA

AGED CARE ADVOCACY STRATEGY – MODULE TWO

JULY 2019

UNITINGCARE AUSTRALIA - AGED CARE ADVOCACY STRATEGY – MODULE TWO 2

KEY CONTACTS

Cam Ansell Managing Director Telephone: +61 (08) 9468 7520 Email: [email protected] Amber Cartwright Manager – Advisory Telephone: +61 (08) 9468 7527 Email: [email protected] Sara Agostinelli Senior Consultant Telephone: +61 (02) 8002 4744 Email: [email protected]

mailto:[email protected]:[email protected]:[email protected]


TABLE OF CONTENT

1. EXECUTIVE SUMMARY ......................................................................................... 5

2. PROJECT SCOPE ................................................................................................. 10

2.1 Background ............................................................................................................... 10 2.2 Project Scope ............................................................................................................ 10

3. INTERNATIONAL RESEARCH ............................................................................... 13

3.1 Overview ................................................................................................................... 13 3.2 LTC Funding & Penetration Rates ............................................................................. 13 3.3 LTC Staffing Model .................................................................................................... 26

4. ALTERNATIVE MODELS OF CARE ........................................................................ 36

4.1 Green House Model .................................................................................................. 36 4.2 Household Model ..................................................................................................... 37 4.3 Butterfly Model......................................................................................................... 37 4.4 Eden Alternative Model ............................................................................................ 38 4.5 Montessori Model .................................................................................................... 39 4.6 Case Management Model......................................................................................... 40 4.7 Apartments for Life ................................................................................................... 41 4.8 De Hogeweyk ............................................................................................................ 41

5. COST ESTIMATES FOR STAFFING RATIOS ............................................................ 46

6. APPENDIX ONE – GLOSSARY .............................................................................. 55

7. APPENDIX TWO – INTERNATIONAL RESEARCH FINDINGS ................................... 56

8. APPENDIX THREE – SCENARIO COST ESTIMATES ................................................ 67

SECTION ONE

EXECUTIVE SUMMARY


1. EXECUTIVE SUMMARY

In 2018, UnitingCare Australia engaged Ansell Strategic to undertake the Aged Care Data

Project. This project aimed to gain great understanding of unmet demand and broader issues

surrounding funding and accessibility across Australia’s aged care sector. It was intended that

the data collated and information presented would be utilised in forming an advocacy strategy

for the pending Federal Election. This advocacy strategy would aim to educate and inform the

wider public about the lack of equitable access and sustainability issues faced by consumers,

providers and the Government.

However, the announcement of the Royal Commission into Aged Care Quality & Safety (Royal

Commission) has seen a new focus on the sector. As a result of the Royal Commission, the

Aged Care Data Project has been tailored to support UnitingCare Australia’s advocacy position.

The first component of the Aged Care Data Project, Module One, involved researching regions

of high demand in comparison to available supply. As part of Module One we reviewed the

potential impact that changes to the ratio of aged care services and consumer contributions

would have on forecasted Commonwealth aged care expenditure. The analysis of aged care

supply and demand found the level of unmet demand across Australia is systemic, with various

demographics, both regional and metropolitan areas, impacted. It was evident that the access

and supply of aged care services, in particular home care and home support services, is below

the level of need in many areas.

The analysis of future need and funding highlighted that we are about to experience extreme

fiscal pressure as we enter into a period of unprecedented demand. However, by changing

the supply and allocation of home care and residential aged care, as well as reviewing

consumer contributions to care, there could be potential solutions that can result in a more

equitable funding system. These solutions could also reduce pressure on hospitals, meet

consumer preferences, encourage innovation and quality care solutions and assist in

addressing workforce pressure.

In light of the findings from the first stage of the project, it was agreed to focus the second

stage on international research that explores staffing, expenditure, funding systems as well

any challenges that other countries may be facing. In response to the Australian Nursing and

Midwifery Federation’s (ANMF) advocacy strategy (for both the Royal Commission and

Federal Election) to mandate staff to resident ratios, qualifications and skill mixes, this analysis

has been focused towards international staffing mixes, levels and ratio trends in permanent

Long Term Care (LTC) institutions. We have also analysed alternative models of that are

emerging in both Australia and internationally that move away from traditional and

institutional models of care.

INTERNATIONAL RESEARCH

Ansell Strategic analysed the LTC funding models, LTC expenditure as a proportion of Gross

Domestic Product (GDP), penetration rates, ageing population trends, regulated minimum

staffing requirements, qualification requirements, average staff to resident hours and other

regulation across 16 different countries who are members of the Organisation for Economic

Co-Operation and Development (OECD). The analysis focusses on countries that belong to the


OECD as these possess LTC funding and healthcare policies that are comparable to Australia.

The countries examined in this analysis include:

Australia The Netherlands

Austria New Zealand

Canada Norway

Denmark Singapore

France Sweden

Germany Switzerland

Italy United Kingdom (UK) with a focus on England

Japan United States of America (USA)

Our analysis found Australia spends comparatively less on LTC investment as a percentage of

GDP. This is reflective of the current lower proportion of older Australians compared to other

OECD countries.

From the mix of OECD countries included in our analysis, it appears that Australia is in the

minority among other OECD countries who do not possess a Universal LTC finding system,

whereby all seniors have equal access to a base level of LTC funding irrespective of their

financial means.

Australia possesses a Mixed or Progressive funding system whereby consumers can access

benefits to assist with covering the costs of LTC subject to means testing. Despite this, our

expenditure levels are more in line with countries who employ Safety Net funding systems

and who offer fewer benefits and subsidies. In addition to this, Australia has one of the longest

average lengths of stay for residents in permanent LTC institutions compared to other OECD

countries in this analysis.

Countries who have a Universal funding system had significantly higher expenditure levels.

Whilst this system presents benefits for the consumer, given the current ageing population

trends and growing dependency ratios of pensioners to taxpayers, the Universal funding

system is the most costly system to sustain.

Germany, which has a Universal funding system, spent a slightly lower proportion of their GDP

on LTC but also had a significantly higher proportion of older persons, relatively lower

institutionalisation rates and reportedly lower lengths of stay in institutional care (almost half

the length of time in Australia). Canada also demonstrated similar characteristics. In Germany,

a progressive insurance scheme is in place and across Canada’s various municipalities, an

additional tax is charged.

Expenditure in countries with Safety Net systems was generally lower and our analysis found

whilst there was reduced pressure for central funding, it was creating disparity in the

availability of adequate numbers of homes and beds and did not incentivise investment for

elderly who have mid to low means, with new developments targeting the private paying

market. This was particularly evident in the UK.

We also identified a trend between expenditure on home care and LTC, institutionalisation

rates and government expenditure. The analysis indicates that a greater investment in home

care expenditure could result in overall lower reliance on permanent LTC institutions, shorter


lengths of stay in LTC institutions and lower overall spending towards LTC services as a

proportion of GDP.

Our analysis on staff ratios and skills mix found that only two countries, being Germany and

Japan, enforced nation-wide regulations around staff to resident ratios. In Germany, the ratios

were comparatively high and there was a heavier reliance on nurses than levels reported in

Australia and other OECD countries. However, as previously stated, the country had

reportedly lower lengths of stay and low proportion of older people in permanent LTC

institutions. In addition, Germany has comparatively high home care usage. This indicates that

LTC residential in Germany is tailored more towards palliative and high acuity care.

There were many other countries who had guidelines surrounding staff ratios but did not

mandate ratios. Guidelines provided often stipulated low threshold staff to resident ratios,

which could present a risk if providers only complied with the minimums. Most countries had

reportedly higher average hours of care compared to Australia and the comparative level of

expenditure on LTC in these countries was also higher.

Countries such as Sweden and the UK had a greater reliance on carers which has been driven

by a shortage of nurses. There has been strong push in these countries to increase nursing

presence.

Many countries, like Australia, are experiencing resourcing and fiscal pressure as their

populations continue to age. Our analysis of funding systems across the various OECD

countries found there are many variations, however countries such as Germany, who have

implemented insurance systems and reduced institutionalisation rates, appear to have been

able to contain LTC expenditure at sustainable levels.

Our analysis also found that compared to other OECD countries, there appears to be an over

institutionalisation of older Australians into permanent residential aged care and longer

resident lengths of stay in institutions. Based on this comparative analysis and the current

supply shortages of home care packages, in Australia there may be capacity for further

Government investment into home care services to reduce the high penetration rate of

elders into permanent institutions.

Staffing ratios varied across the OECD countries analysed, however there was generally a

correlation between expenditure on LTC and staffing levels. Only two countries analysed had

mandated staffing ratios. In countries where there was a reduced reliance on clinical staff,

there was also concern from the public and Unions regarding the quality of care. However,

there is insufficient evidence to suggest that lower clinical staff results in reduced quality

care from this analysis.

The analysis highlighted that the ability to appropriately resource care provided in LTC

settings is an international issue that will only exacerbate as the world’s population ages.

HOUSEHOLD MODELS OF CARE

Across Australia and many other countries, new models of care are being developed that aim

to enhance resident outcomes from both quality, wellbeing and clinical care perspectives. We

researched some prominent alternative care and staffing models which highlighted some

examples of non-institutional, flexible staffing models.


Many of the models explored have seen a shift towards the approach of caring and supporting

residents at a more personal level. Whilst clinical staff play an important role in these models,

there is a greater focus on consumer experience and outcomes, which goes beyond clinical

indicators. To effectively implement these models of care, a holistic approach of all care staff

is required and there is often a greater need for personal care workers who are able to provide

care, support and companionship.

One of the main areas of concern with staff ratios is that the more rigid structures tend to

direct care delivery towards more traditional and clinical models. Our research and

experience constantly highlights that flexibility is required to address the myriad of variables

in residential aged care which include resident preferences, acuity levels, staffing

experience, models of care and building design.

COST ESTIMATES FOR STAFFING RATIOS

In addition to the above research, we have also analysed the cost estimates assuming the

staffing ratios and mixes proposed by the ANMF were introduced. In the National Aged Care

Staffing and Skills Mix Project Report, the ANMF recommended a 10% to 15% increase in staff

wages, a minimum of 4.3 hours nursing and personal carer staff hours per resident per day (to

be progressively implemented over 6 years) and a staffing mix of:

30% Registered Nurses

20% Enrolled Nurses

50% Personal Carers

We undertook six scenarios, which included modelling the ANMFs proposed staff hours and

mix as well as scenarios which varied the staffing mix. For each variation we also modelled the

impact based on a 10% and 15% increase in wages.

Under the scenarios proposed by the ANMF, we estimated that at full implementation the

recommendations would result in additional costs of between $9.2 and $10.3 billion dollars

per annum, or $41,300 to $45,600 per resident, per annum. By 2025, the recommendations

would have resulted in $39.2 to $44.1 billion in net additional staff costs (accumulated) and

required an injection of nearly 58,000 new staff. When factoring in the 2019-20 Federal

Budget and projected aged care funding, the forecasted additional costs and resources

involved to achieve the ANMF’s vision will exceed funding.

Under the alternate scenarios, the financial impact is reduced, however it is still material.

Whilst we agree that additional resourcing is likely to result in better outcomes for residents,

there remains insufficient evidence to support the ANMF’s recommendations surrounding

staffing skills mix. Our international research and review of alternative models of care has

highlighted that whilst more resources are required, staff ratios do not reflect the variables

and dynamic nature of residential aged care. Further, without any significant change to the

current funding system and workforce, the implementation of these recommendations is not

viable.

SECTION TWO

PROJECT SCOPE


2. PROJECT SCOPE

2.1 BACKGROUND

Ansell Strategic has been working with the UCA team and wider member network on the Aged

Care Data project. The final report for Module One was provided in December 2018.

In the initial project scope, Module Two comprised of the collation of additional information

to support the policy development and advocacy strategy. However, this has since been

adapted to reflect a new recommended scope in light of the announcement of the Royal

Commission into Aged Care Quality and Safety in late 2018.

The new recommended scope was further refined by UCA. Our agreed scope for Module Two

has been outlined below.

2.2 PROJECT SCOPE

The Module One report outlined three key areas that UCA could potentially advocate for in

the Royal Commission and upcoming Federal Election. In summary, this included:

1. Improving Access to Home Care Packages

2. Reinvesting into Residential Aged Care

3. Equitable Funding of Aged Care

Based on discussions with the network and as part of Module Two, it has been agreed that

Ansell Strategic will focus on the research components of Advocacy Strategy Two (Reinvesting

into Residential Aged Care) and Three (Equitable Funding of Aged Care).

The scope proposed and agreed below takes into consideration the initial project scope but

acknowledges the change in timings and recent events.

2.2.1 Reinvesting in Residential Aged Care

The findings in the Module One report demonstrated that there is a significant opportunity to

reinvest in residential aged care to improve quality and sustainability. There is concern across

the sector and public regarding staffing levels and the analysis in Module One demonstrated

a potential to reinvest any savings from a change in aged care service ratios and/or consumer

contributions to an increase in care labour hours per resident.

The ANMF has been advocating for mandatory staffing levels. We have reported our concerns

regarding fixed staffing ratios, particularly in relation to the inflexibility it creates and potential

impact on the delivery of quality and person-centred care. However, all stakeholders would

support an increase in staff resourcing.

To support an increase in investment in residential aged care, Ansell Strategic has undertaken

research in the following areas:

Estimating the additional cost and resourcing associated with achieving staffing

levels advocated by the ANMF;


Undertaking international research to understand staffing levels and mixes in long

term facilities. Where available, we have reviewed factors such as GDP expenditure

on long term care, mandated staffing ratios/experience levels, long term care

funding, length of stay and summarise any advantages or challenges that may be

experienced delivering long term care; and

Documenting alternate models of care that have been developed that

demonstrate the ability to deliver quality and person-centred care that differs from

traditional “clinical” models.

2.2.2 Equitable Funding of Aged Care

This advocacy position would build on from the recommendations made within the Tune

Review as well as support the UnitingCare Australia’s strategies to improve home care access

and reinvest in residential aged care. As part of the international analysis described above, we

have reviewed information regarding international approaches to consumer contributions

towards care.

SECTION THREE

INTERNATIONAL RESEARCH


3. INTERNATIONAL RESEARCH

3.1 OVERVIEW

The scope of the international review was to analyse how other OECD countries organise their

funding into LTC services, if there are any mandated requirements on staff ratios or staff

qualification mixes and the potential advantages and challenges associated with each

country’s LTC model from both the consumer’s and taxpayer’s perspectives.

As per the OECD, LTC consists of a range of medical, personal care and assistance services that

are provided with the primary goal of alleviating pain and reducing or managing the

deterioration in health status for people with a degree of long-term dependency, assisting

them with their personal care (through help for activities of daily living, ADL, such as eating,

washing and dressing) and assisting them to live independently (through help for instrumental

activities of daily living, IADL, such as cooking, shopping and managing finances)encompasses

both home based and residential (or institutional) care. LTC is further defined by LTC recipients

at home (i.e. home care) or recipients in institutions other than hospitals (i.e. residential aged

care). Where applicable and possible, we have distinguished between recipient types.

Ansell Strategic investigated countries that belong to the OECD, as these possess LTC funding

and healthcare policies that are comparable to Australia. Further, the majority of the countries

selected are experiencing at least some degree of ageing population demographic trends with

a concurrent reduction in taxpayers. The demographic similarities allow us to compare the

strategies employed by other countries to support their ageing cohorts during a time of

funding restrictions in comparison to Australia.

The countries examined in this analysis include:

Australia The Netherlands

Austria New Zealand

Canada Norway

Denmark Singapore

France Sweden

Germany Switzerland

Italy United Kingdom (UK) with a focus on England

Japan United States of America (USA)

For the purpose of this report, the countries listed above will be explored in different levels of

detail where relevant. A detailed analysis of each country’s LTC models, including an

assessment of the possible advantages and challenges faced by each country, has been

provided in Appendix 2.

3.2 LTC FUNDING & PENETRATION RATES

The regulatory frameworks governing funding towards LTC in the 16 countries included in this

research vary significantly. Ansell Strategic leveraged the OECD’s three broad categories of

LTC systems to categorise all 16 countries included in our research. These include:


Universal;

Safety Net; and

Mixed or Progressive.

The three broad categories listed above are based on the universality of the LTC system, that

is, the degree to which consumers are entitled to receive subsidies towards their aged care

services and accommodation in comparison to the degree to which consumers are required

to co-pay for their cost of care.

Australia possesses a Mixed or Progressive system, whereby consumers are entitled to receive

benefits to help fund their costs of care and accommodation subject to means testing. In

Australia, consumers contribute toward their total costs of aged care and accommodation

through co-payments.

Most of the OECD countries included in our research employ a Universal LTC system. The UK

and USA were the only two countries who employ a Safety Net system and France, Austria

and New Zealand employ the same system as Australia under a Mixed or Progressive LTC

system.

The Universal healthcare system provides that majority of the population are entitled to

receive publicly funded LTC services. In a Universal LTC system, LTC services are typically either

funded through a compulsory public health insurance scheme that tax payers must contribute

to in addition to income tax or through the country’s government outlays. Whilst the Universal

LTC system ensures equitable access to LTC to all consumers irrespective of their financial

means, in some countries this can present a costly system to sustain as the proportion of the

elderly continues to grow in conjunction with a decline in tax payers.

Under a Safety Net system there are low levels of support available to the population to help

subsidise their costs of care and accommodation. The costs of care are typically borne by the

consumer or through private health insurance schemes. At this end of the spectrum, there is

minimal pressure placed on the taxation system. However, those with lower financial means

often have limited access to their required aged care and accommodation.

The Mixed or Progressive system enables the majority of the population to access funded LTC

services, but these are usually accompanied by co-payments borne by the consumer subject

to income and asset related testing. This method alleviates the pressure placed on the funding

body for countries who are experiencing ageing population trends.

Graph 1 and Graph 2 depict the different LTC funding systems employed by the 16 OECD

countries included in this research.


Graph 1: LTC Funding Systems Across 16 OECD Countries by Proportion

Sources: Appendix D: International Experience: Inquiry Report Caring for Older Australians Productivity

Commission, June 2011 & OECD Health Statistics 2018. Retrieved from http://www.oecd.org/els/health-

systems/health-data.htm.

Graph 2: 16 OECD Countries Categorised by Different LTC Funding Systems

Sources: Appendix D: International Experience: Inquiry Report Caring for Older Australians Productivity

Commission, June 2011 & OECD Health Statistics 2018. Retrieved from http://www.oecd.org/els/health-

systems/health-data.htm.

To further explore the costs and benefits of the different LTC funding systems, Ansell Strategic

has examined each country’s spending on LTC (this comprises public spending on institutional,

in-home and other forms of LTC services) as a proportion of the country’s GDP as at 2016 or

the latest year available. Note, LTC expenditure comprises both health and social expenditure.

We have not factored in other factors such as pensions which may also impact overall subsidy

levels. The findings from this analysis are presented in Graph 3.

63%13%

25%

Universal Safety Net Mixed or Progressive

0

1

2

3

4

5

6

7

8

9

10

Universal Safety Net Mixed or Progressive

No

. o

f O

ECD

Co

un

trie

s

Canada

Denmark

Germany

Italy

Japan

The Netherlands

Norway

Singapore

Sweden

Switzerland

UK

USA

Australia

Austria

France

New Zealand

http://www.oecd.org/els/health-systems/health-data.htmhttp://www.oecd.org/els/health-systems/health-data.htmhttp://www.oecd.org/els/health-systems/health-data.htmhttp://www.oecd.org/els/health-systems/health-data.htm


Graph 3: Selected Countries Spending on LTC as a Proportion of GDP by Funding System

Source: Health at a Glance 2017: OECD indicators. Graph 11.24. LTC expenditure by government and compulsory

insurance schemes, as share of GDP, 2015 (or nearest year) or latest year available.

Based on OECD data, on average countries who operate a Universal LTC funding system spend

more on LTC services as a proportion of their country’s GDP (with an average of 2.09% of GDP)

compared to the OECD average of 1.7% (for all OECD countries). Further, Universal funding

system countries spend more on LTC than countries who operate under a Safety Net system

(with an average spending of 1.00% of GDP) and the Mixed or Progressive system (with an

average spending of 1.34% of GDP).

Australia’s expenditure on LTC, at 1.00% of GDP1, is the lowest of the Mixed or Progressive

countries and is more in line with the average for countries who operate under a Safety Net

System.

Compared to Universal healthcare models, Mixed or Progressive and Safety Net Systems

typically require consumers to co-contribute towards their LTC care and accommodation costs

and the specific co-contribution amounts are usually dictated by means testing.

Ansell Strategic has undertaken a high level analysis of mandated consumer co-contributions

towards LTC costs, summarised in Table 1 below.

1 This has been calculated based on Australia’s expenditure on Aged Care in 2015 per the ACFA Reports and Australia’s GDP for 2015 accessed from OECD Stats https://data.oecd.org/gdp/gross-domestic-product-gdp.htm .

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

Can

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Den

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Ger

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Ital

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Jap

an

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No

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Swed

en

Swit

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a

Fran

ce

New

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ve

Un

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t

Universal Mixed or Progressive Safety Net

LTC

Sp

end

as

% o

f G

DP

https://data.oecd.org/gdp/gross-domestic-product-gdp.htm


Table 1: Consumer Co-Contributions Towards LTC Costs

OECD Country Funding System Co-Contribution System

Austria Mixed or Progressive

Individual States/Municipalities provide varied base

levels of non-means tested “benefits in kind” to LTC

consumers.

The Federal Government provides cash benefits in kind

to all recipients of LTC, non-means tested. These

benefits are directly related to consumer care levels,

from 1 (low care) to 7 (high care) and range from a low

of €154.20 ($247 AUD) (level 1) to €1,655.80 ($2,647

AUD) (level 7) per month.

In addition to benefits in kind, consumers contribute

towards costs of LTC care services and accommodation

through co-payments.

The amount consumers are requested to co-pay is

variable across each State/Municipality, and is based on

the State/Municipality income and asset testing and the

specific facility.

Consumer co-payments will be charged as the

additional amount left over after the base level benefits

in kind and means tested benefits are deducted from

total care and accommodation costs. If the total

supplement amount does not cover a designated

proportion of total costs (this proportion is variable

across different States/Municipalities), Social Services

may provide further supplements, which can cover up

to 20% of income and €44.30 ($68 AUD) (per month) is

guaranteed for personal use. Amounts may differ

between States/Municipalities and facility. In some

States/Municipalities, family members are required to

contribute to LTC costs.

France Mixed or Progressive

Funded through a compulsory National public health

insurance fund managed by the Federal Government.

LTC subsidies are based on the level of care needs and is

means tested, only those below a means tested

threshold are able to access the full benefits.

Co-payments in LTC institutions are composed of:

A constant amount based on the level of

dependence (this varies between lower and higher care levels); and

A means-tested participation fee which covers

bed and board costs (this covers all

accommodation costs). The means testing

threshold is highly variable throughout the



country dependent on the location and quality

of the facility, among other elements.

On average, the brackets range from €17 to €60 ($27 -

$96 AUD) per day to over care costs, from €5 to €547

($8 to $875 AUD) to cover the level of dependency on

care staff of the resident (known as the ‘dependency

price’) and from €33 to €80 ($55 to $128 AUD) for bed

and board.

Broadly, the average monthly ‘dependency price’ is

based on the resident acuity levels as follows:

€547 for high care;

€335 for medium care;

€5 for low care

The average amount of cost-sharing is around €1,600

per month (€1,500 for lodgings + €100 for dependency).

New Zealand Mixed or Progressive

A consumer is eligible to receive aged care subsidies if

they are aged 65+, theirs and their partner’s (if

applicable) total assets (including their home) are

$230,495 NZD or less.

Income testing is different across different types of

income.

The maximum resident co-payment varies across

different DHBs. In Christchurch for example, the

maximum a resident can be charged for care and

accommodation costs in LTC facilities is approximately

$850 NZD per resident per week.

Japan Universal All care services are subject to a 10% out-of-pocket

contribution from the care recipient.

The other 90% is funded through a compulsory national

aged care insurance scheme that taxpayers contribute

to.

UK Safety Net If the individual has capital above an ‘upper capital

threshold’ of £23,250 ($37,192 AUD), the individual

pays the full cost of their care. For residential care, the

value of the home is usually included in capital after the

first 12 weeks.

When capital is below £23,250 ($37,192 AUD), the state

meets some of the cost depending on the individual’s

assessable income.

Assessable income includes a notional weekly income,

known as ‘tariff income’ on capital between a ‘lower



capital threshold’, currently £14,250 ($22,790 AUD) and

the upper capital threshold. The current rate of tariff

income is £1 for each £250 between the lower and

upper capital thresholds.

Capital up to the lower capital threshold, and any

income from it, is not included in the means test. Capital

includes buildings, land, savings or shares.

US Safety Net The National average costs towards different LTC services for consumers above the means tested threshold are as follows: $225 USD ($320 AUD) per day for a semiprivate room in

a nursing home

$253 USD ($361 AUD) per day for a private room in a

nursing home

$119 USD ($169 AUD) per day for care in an assisted

living facility (for a one-bedroom unit)

$20.50 USD ($29 AUD) an hour for a health aide

$20 USD ($28.50 AUD) an hour for homemaker services

$68 USD ($97 AUD) per day for services in an adult day

health care centre

Income and asset testing determine the amount that the State will subsidise the costs of LTC. Means testing will consider the equity in your home, anyone over $536,000 USD ($765,000 AUD) in equity would not meet the requirements to receive subsidies. Other income and assets elements are also considered. For more information please refer to this link. The eligibility for subsidised care is stringent and it is estimated that 88% of the cost of nursing home care following hospitalisation lies with the consumer.2

On average, the four countries included in this study who possess a Mixed or Progressive

funding system spend a similar proportion of their GDP on LTC at 1.34% relative to the total

OECD average of 1.72%. Australia appears to be the outlier among the four Mixed or

Progressive funding countries with the lowest spending as a proportion of GDP at 1.00%.

Whilst the Universal funding system presents benefits for the consumer, given the current

ageing population trends and growing dependency ratios of pensioners to taxpayers, the

Universal funding system is the most costly system for the taxation system to sustain.

Given Australia has a higher GDP per capita than many OECD countries, we have also

undertaken an analysis on the estimated spend on LTC (institutional) per bed. This has been

2 America's Health Insurance Plans - AHIP guide - Site Accessed 11/16/17.

https://longtermcare.acl.gov/medicare-medicaid-more/medicaid/medicaid-eligibility/financial-requirements-assets.html


compared with the institutionalisation rates of those aged 65 years and over into permanent

LTC facilities to examine Australia’s institutionalisation rates of seniors compared to other

OECD countries.

As evident from Graph 4 is that Australia has the highest institutionalisation rate of seniors at

6.4% of those aged 65 and over compared to other OECD countries included in this research

(average of 4.8%) as well as the OECD average of 3.6%.

LTC expenditure levels per bed reflects overall LTC spend as a percentage of GDP. Australia

has a relatively low expenditure per bed compared to other OECD countries, with an estimated

spend of $47,000 per bed compared to the average of $62,000 per bed of the OECD countries

analysed.

Our analysis found there is minimal correlation between average expenditure on LTC

(institutional) and penetration rates, which is the proportion of people residing in permanent

LTC institutions of all persons aged 65 years and over. There were similar findings observed

for the population aged 80 years and over. Our preliminary analysis indicates a trend between

countries that have higher LTC (institution) penetration rates and higher LTC expenditure as a

proportion of GDP.

Graph 4: LTC Institutional Recipients as a Proportion of Persons Aged 65+ and Implied GDP Expenditure per LTC Institutional Bed (US Dollars), 20153

Sources: OECD Health at a Glance 2017: OECD indicators and OECD.Stat website 2015 (or nearest year available).

3 Implied GDP Spend per LTC Institutional Bed Calculated using LTC expenditure as a proportion of GDP; spending on LTC by mode of provision (home based or institutional), GDP in US Dollars and reported Beds in residential long-term care facilities. Data accessed from Health at a Glance 2017: OECD indicators and OECD.Stat website. 2015 (or the nearest year available) data has been used. Not all statistics available for NZ and United States, therefore they have been excluded.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Can

ada

Den

mar

k

Ger

man

y

Ital

y

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an

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en

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and

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ce

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Universal Mixed or Progressive SafetyNet

LTC

Rec

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(In

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al)

as a

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op

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TC (

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nal

) B

ed (

US

Do

llars

)

Implied GDP Spend per LTC (Institutional) Bed

LTC Recipients (Institutional) as % of Population Aged 65+


Graph 5: LTC Institutional Recipients as a Proportion of Persons Aged 80+ and Implied GDP Expenditure per LTC Institutional Bed (US Dollars), 2015

Sources: OECD Health at a Glance 2017: OECD indicators and OECD.Stat website 2015 (or nearest year available).

We also analysed the length of stay and institutionalisation rates (Graph 6), which found

stronger correlation with longer lengths of stay and greater levels of people aged 65 and over

in LTC (institutions). The same findings were observed for the population aged 80 years and

over (Graph 7).

Graph 6: LTC Institutional Recipients as a Proportion of Persons Aged 65 and Average Lengths of Stay in LTC (Institutional)

Sources: OECD.Stat website 2015 (or nearest year available). Refer to Appendix Two for Length of Stay.

0%

5%

10%

15%

20%

25%

$-

$20,000.00

$40,000.00

$60,000.00

$80,000.00

$100,000.00

$120,000.00

$140,000.00

LTC

Rec

ipie

nts

(In

stit

uti

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al)

as a

% o

f P

op

n. A

ged

8

0+

GD

P S

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TC (

Inst

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) B

ed (

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Do

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)

Implied GDP Spend per LTC (Institutional) Bed

LTC Recipients (Institutional) as a % of Popn. Aged 80+

0%

1%

2%

3%

4%

5%

6%

7%

-

5

10

15

20

25

30

35

40LT

C R

ecip

ien

ts (

Inst

itu

tio

nal

) as

a %

of

Po

pn

. Age

d 6

5+

Mo

nth

s

Length of Stay LTC Recipients (Institutional) as % of Population Aged 65+


Graph 7: LTC Institutional Recipients as a Proportion of Persons Aged 80+ and Average Lengths of Stay in LTC (Institutional)

Sources: OECD.Stat website 2015 (or nearest year available). Refer to Appendix Two for Length of Stay.

With these factors coupled and our existing knowledge of supply shortages of home care

packages across Australia, there appears to be an over institutionalisation of older

Australians into permanent residential age care. There also appears to be capacity for

further Government investment into the aged care sector to reduce the high penetration

rate of elders into permanent institutions and length of stay.

We have explored in further detail the LTC funding of Austria and New Zealand who also

employ Mixed or Progressive LTC funding system.

Austria’s LTC system is heavily regulated by the country’s different states. A compulsory

national insurance scheme that taxpayers contribute to funds LTC services. The Austrian

funding system is decentralised and the country’s different states are responsible to regulate

the demand for and supply of LTC services and to allocate funding.

Access to LTC services is income tested across all Austrian states and, subject to the care

recipient’s income testing, there are co-payments required from consumers to contribute to

their costs of care and accommodation. These co-payments vary across different Austrian

states. In 2017, the Austrian parliament passed a Constitutional Provision that prohibits asset

testing for those who require LTC services. Asset testing has been abolished in Austria

effective from 1 January 2018.

The Austrian LTC funding model is based on the number of predicted staff care hours that

would be required by a resident based on their assessed level of need. In theory, the funding

allocated to an LTC service should be proportional to the levels of staff and resources costs

required to meet resident care needs.

This model comprises seven different care assessment tiers, ranging from care level one “low

care” to care level seven “acute care”. Funding levels increase between care levels one and

seven. The predicted care hours required per care level are established by the Austrian Federal

0

5

10

15

20

25

30

35

40

0%

5%

10%

15%

20%

25%

Australia Switzerland Netherlands Norway Sweden Germany UnitedStates

Mo

nth

s

LTC

Rec

ipie

nts

(In

stit

uti

on

al)

as a

% o

f P

op

n.

Age

d 8

0+

LTC Recipients (Institutional) as % of Population Aged 80+ Length of Stay


Government. Under care level one, a resident must be assessed as requiring a minimum of 65

care hours per month. Funding allocated towards care level seven is 10.74 times that of level

one. Care assessments are undertaken regularly in order to adjust residents’ care assessment

levels in accordance to their changing acuity levels.

Austria has historically had lower GDP expenditure, however these new changes to means

testing may result in an increase in LTC funding.

Whilst the Austrian LTC funding system aims to offset increases in staff and resource costs

required to address changing resident acuity levels, the number of predicted care hours per

care level are arbitrary and are not always representative of the true care hours required

per resident. This funding model restricts the ability for flexible rostering due to stringent

funding brackets based on fixed staff hours. Future analysis is required to understand the

impact the recent changes will have on LTC funding levels.

In New Zealand, who has undergone several reforms to its LTC funding system, their current

approach to funding is less regulated and promotes more staffing flexibility than that observed

in both Austria and Australia.

New Zealand possesses a centralised LTC funding system where funding is distributed by the

Federal Government’s Ministry of Health to local District Health Boards (DHBs) who oversee

different regions of the country. The aged care sector is regulated by the Federal

Government’s Ministry of Health and its financing is supported through the national funding

body.

Access to LTC services and accommodation in New Zealand is means tested based on an

income and asset test, which reduces the pressure placed on the funding body as those with

higher financial means contribute more co-payments towards their costs of aged care and

accommodation.

The level of funding allocated to an LTC service is based on the acuity levels of residents. There

are four different care level tiers, ranging from Rest Home (low care) to Psychogeriatric or D6

(high care). The level of funding allocated becomes progressively higher as the care level

increase in acuity up to the Psychogeriatric level.

There is also “swing beds” within the lower care spectrum of care tiers (Rest Home and

Hospital care levels), that enable consumers to move between the two levels based on their

changing acuity levels and reablement whilst remaining within the same accommodation or

room. This enables facilities to staff flexibly through accessing the required additional funding

to cover grater resource costs and deliver continuum of care to ageing residents.

However, in the higher care tiers, including Dementia (or D3) and Psychogeriatric (D6),

residents who progress up to these care levels are typically required to relocate to purpose

built and secure accommodation. In addition, there are not enough flexible beds and there

can be significant delay in external assessments in some Districts. This can result in caring for

people with higher acuity levels for less funding.

Presently, resident care needs are reassessed regularly on an ongoing basis to account for

changes in acuity. In addition to this, New Zealand employs the InterRAI Long Term Care

Facilities Assessment System (LTCFAS) tool every six months. LTC services utilise these


assessments as clinical indicators to estimate ongoing resident care needs and to adjust staff

and resource levels accordingly.

Despite these care assessment tools, the existing funding mechanism has been reported to

reactively respond to changing care levels, resulting in a lag between fluctuating resident care

requirements and proportional changes to allocated subsidies.

In May 2018, the University of Auckland undertook research on the development of a case-

mix system for aged residential care and introduced the RUG -III (Resource Utilisation Groups)

assessment tool. While in its exploration stages, this new assessment tool is proposed to assist

the Ministry of Health and local DHBs to “…better distribute funding across more granular

categories of need to improve the quality and personalisation of care plans for older people.”4

In addition, many providers state there is differing response and flexibility depending on the

DHB that the home operates in.

Another limitation of the current funding model in New Zealand is the level of subsidy

allocated to homes has not increased sufficiently to offset the rise in labour costs for care staff

following the 2018 Pay Equity Settlement and general operating costs. Ansell Strategic

analysed the financial impact of this in 2018. Refer here for further detail.

New Zealand operators have experienced significant decline in financial performance and

accommodation is not separately funded. As such, it is difficult to access capital to fund new

developments.

Despite some limitations, New Zealand possesses a more flexible funding model that enables

LTC services to more effectively resource their home to meet changing resident acuity levels

relative to Australia’s and Austria’s more stringent regulatory environments and funding

systems.

Ansell Strategic has undertaken an analysis of spending towards permanent LTC institutions

(residential) and home based LTC across the different OECD countries. The findings are

presented in Graphs 8 and 9.

4 The University of Auckland, Medical and Health Sciences Journal: New assessment tool to improve funding and innovation in elderly care, 18 May 2018. Retrieved from: https://www.fmhs.auckland.ac.nz/en/faculty/about/news-and-events/news/2018/5/new-assessment-tool.html

https://www.ansellstrategic.com.au/nzaca-effects-pay-equity-settlement/


Graph 8: Spending on Permanent and Home Based LTC as a % of GDP Compared to % of

Population Aged 65+ in Permanent LTC Institutions

Sources: OECD.Stat website 2015 (or nearest year available) & OECD Health Glance 2017.

Graph 9: Spending on Permanent and Home Based LTC as a % of GDP Compared to % of

Population Aged 80+ in Permanent LTC Institutions

Sources: OECD.Stat website 2015 (or nearest year available) & OECD Health Glance 2017.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f P

op

. Age

d 6

5+

% o

f G

DP

Other

Home Based

Inpatient (Residential Care)

% of Total Population Aged 65+ in LTC Institutions

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% o

f P

op

. Age

d 8

0+

% o

f G

DP

Other

Home Based

Inpatient (Residential Care)

% of Total Population Aged 80+ in LTC Institutions


The figures in Graphs 8 and 9 suggest that countries whose Governments spend

proportionally more on home care services compared to permanent LTC have a lower

penetration rate of seniors in LTC institutions. Examples of this include Germany, Norway

and Denmark, each of whom has comparatively lower penetration rates of seniors aged 65

and 80 years in permanent LTC and higher spending on home based LTC services.

For these three countries, from Graphs 4 and 5 it also appears that overall spending on LTC

in USD as a proportion of GDP is lower compared to countries that focus fewer resources

towards home care funding. Graphs 6 and 7 also show that average length of stays in

permanent LTC institutions are shorter in Germany compared to other OECD countries.

This cross-analysis of findings highlights that there may be a relationship between higher

government spending towards home care and overall lower penetration rates of seniors in

permanent LTC institutions, shorter lengths of stay in LTC institutions and lower overall

spending towards LTC services as a proportion of GDP.

3.3 LTC STAFFING MODEL

In Australia there are currently no requirements on staff to resident ratios or mandated skill

mixes. The ANMF commissioned the Flinders University to investigate the financial costs and

benefits of the recommendations contained within the National Aged Care Staffing and Skills

Mix report. Based on the recommendations of these reports, the ANMF argues that Australia

requires mandated minimum staff to resident ratios and changes to the skill mixes that are

rostered in order to improve the quality of care, increase personalisation of care delivery and

produce better outcomes for consumers.

In light of the ANMF’s argument, Ansell Strategic has explored regulations around staffing

levels and skill mixes across the 16 OECD countries. This research has been targeted to explore

each country’s:

Staff to resident ratios (in terms of both staff levels and Full Time Equivalent (FTE)

care hours per resident per day); and

Mandated staff qualifications and rostering shifts based on skill mixes.

Our research has revealed two countries who possess enforced nation-wide regulations

around staff to resident ratios. These include:

Germany; and

Japan.

The most heavily regulated country is Germany, where there are stringent mandated staff to

resident ratios, minimum qualifications requirements and mandated staff skill mixes for day

and night shifts. The specific requirements around ratios, qualifications and skill mixes vary

between different regions across the country and between different resident care levels. Each

region is closely monitored to ensure mandated staffing requirements are adhered to through

regular inspections carried by local Government authorities.

Across the country there are three levels of care offered within nursing homes that range from

Level 1 “moderate care” to Level 3 “highly intensive care”. Residents are admitted to one of

these categories base on their assessed needs. Residents are able to shift between the three

different care levels subject to their reablement or deterioration.


Using staffing requirements for the North-Rhine-Westphalia region as an example, it is

mandatory for homes to structure rosters with three set shifts per day, including morning,

afternoon and night shift. The nurse staff standards are set in FTEs, equivalent to 8 care hours

per day, for the number of residents within each care level per day.

The mandated staffing ratios in this region are as follows:

1 FTE nurse for 4 residents in care Level 1, equating to 2.00 care hours per resident

per day;

1 FTE nurse for 2.5 residents in care Level 2, equating to 3.20 care hours per

resident per day; and

1 FTE nurse for 1.8 residents in care Level 3, equating to 4.44 care hours per

resident per day.

We note that nursing care hours comprise direct care delivered by all qualified nursing staff,

including Registered Nurses (RNs), Licensed Practical Nurses (LPN) and Enrolled Nurses (EN).

The total nursing care hours per resident per day appear higher than Australia’s averages of

0.75 direct RN and EN care hours per resident per day.

Other skill mixes and qualification requirements mandated in this region of Germany include:

50% of all direct care staff must be RNs during day shifts;

There must always be an RN on duty 24 hours per day; and

RNs require 3 years of theoretical and practical experience working with the

elderly.

Graph 10 below illustrates how the North-Rhine-Westphalia region’s nurse to resident care

hours per resident per day compared to nurse care hours delivered in Australia according to

StewartBrown’s results of the 2018 aged care survey.

Graph 10: Combined RN and EN Care Hours Per Resident Per Day in Germany’s North-Rhine-Westphalia Region and Australia

Sources: Charlene Harrington et al. Journal of Nursing Scholarship, Nursing Home Staffing Standards and Staffing

Levels in Six Countries, 29 October 2011. & StewartBrown Aged Care Financial Performance Survey Quarter

ended September 2018.

Evident from Graph is that mandated minimum nurse to resident ratios in Germany are

higher than average care hours per resident per day observed in Australia. However, their

2.00

3.20

4.44

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0.000.501.001.502.002.503.003.504.004.505.00

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spending on LTC as a proportion of GDP is lower than most OECD countries and their

institutionalisation rate of the elderly is also comparatively lower. Germany’s overall

stronger GDP per capita may explain the relatively lower spending on LTC. However, further

analysis found that the country invests more than half of LTC expenditure on home care

model which may contribute to the reduction in the number of those who are admitted in

permanent LTC institutions. Despite this, the current high mandated staffing ratios may

result in increases in spending on LTC over time as Germany’s older population continues to

grow.

Furthermore, the mandated minimum staffing ratios prevent facilities from staffing flexibly

based on fluctuating resident care needs. The rigidity of this system may be prohibitive for

LTC services to deliver personalised services due to rostering inflexibility. The minimum 50%

RN staffing mix regulation also promotes a nursing heavy staffing model, which is a more

expensive staff model to sustain.

In Sweden, there are no formally enforced minimum staff to resident ratios or skill mix

requirements across the country. Some municipalities offer staffing guidelines to LTC services,

however facilities are not assessed to ensure they are compliant with these guidelines. As

Swedish municipalities are responsible for the allocation of LTC funding, staffing guidelines

vary considerably throughout the country. The only requirement in Swedish LTC (enforced

nationally by the Social Service Act) is that an RN must be responsible for all nursing care. In

addition, the Social Services Act contains a general declaration that “…services and care should

be of good quality”.5

In 2009, a study on the direct care hours delivered in Swedish LTC found that on average

throughout a day, there were 0.95 FTE employees per resident in residential care, of which

0.81 FTEs were care workers, 0.05 FTEs were RNs, 0.03 FTE Managers, 0.01 FTE paramedics

and 0.05 FTEs for administrative and domestic staff across Sweden. In terms of direct RN care

hours, this equates to an average of approximately 0.40 direct care hours per resident per

day.6 This is consistent with levels observed in Australia at 0.39 direct RN care hours per

resident per day.7

In terms of care worker staff, on average Swedish LTC services deliver approximately 6.48

direct care worker hours per resident per day, which is considerably higher than Australia’s

2.13 care worker hours per resident per day. Whilst direct nursing care hours are similar,

overall direct care hours delivered in Swedish homes are significantly higher than Australia’s.

However, while this data represents the national Swedish average, this average excludes

nursing hours from licensed or enrolled nurses and there is a great degree of variation in

staffing levels throughout the country. Further, this data encompasses sheltered housing and

other forms of seniors’ housing who typically host residents with lower acuity levels. This may

5 Charlene Harrington et al. Journal of Nursing Scholarship, Nursing Home Staffing Standards and Staffing Levels in Six Countries, 29 October 2011. 6 Charlene Harrington et al. Journal of Nursing Scholarship, Nursing Home Staffing Standards and Staffing Levels in Six Countries, 29 October 2011. 7 StewartBrown Aged Care Financial Performance Survey Quarter ended September 2018.


be skewing the data by showing lower direct nursing care hours than those delivered in LTC

services.

The lack of mandated staffing levels, qualifications and skill mix requirements has raised

concerns across Sweden around the quality of care delivered in LTC despite the country

possessing relatively heavy staff to resident ratios in relation to other OECD countries. Sweden

has also reportedly been experiencing an ageing labour force of nurses, which is resulting in

declining nurse to resident ratios in LTC services across the country. These concerns have been

exacerbated by complaints across the industry regarding the National Board of Health and

Welfare’s, who responsible for inspecting nursing homes for quality and safety, and their lack

of regular site inspections, supervision and formal accreditation system.

The ability for Sweden to maintain these high levels of staffing and to attract more nursing

staff is likely to be limited given the country already has a high proportion of older people

(25% aged 60 and over compared 21% in Australia).

Graph 11: Total RN Care Hours Per Resident Per Day and Care Worker Hours Per Resident Per Day in Sweden and Australia

Source: Charlene Harrington et al. Journal of Nursing Scholarship, Nursing Home Staffing Standards and Staffing

Levels in Six Countries, 29 October 2011.

Concerns around staffing are being addressed in the form of state subsidies allocated to

municipalities towards education and training to encourage a greater uptake of nursing carers

from the labour market and to grow employed nurses’ skills and capabilities. This strategy is

intended to incentivise more of the labour force to select nursing careers and to improve the

quality of care delivered by employed nurses.

In addition, Sweden has directed financial incentives to local governments to encourage

higher standards of care to drive quality improvement and reporting. Annual grants from the

central government to municipalities are linked to the achievements of specific targets, such

as reducing avoidable hospitalisations for chronic conditions and other targets based on

0.40

6.48

0.39

2.13

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

RN Hours Care Worker Hours

Car

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Sweden Australia


indicators derived from clinical registries. Municipalities successfully raising the competence

level of workers are granted a financial reward.8

The absence of fixed staff ratios and staff mix requirements allows Swedish LTC to staff

flexibly based on resident clinical indicators. However, the average care worker hours per

resident per day are comparatively higher than other OECD countries. In response to the

public’s concerns over the quality of care delivered in LTC facilities, the Swedish Government

has opted to invest in education and training and to expand nursing resourcing across the

country, rather than establishing fixed mandated staff to resident ratios. Further, financial

incentives are given to local governments who meet clinical targets, a strategy which is

intended to grow quality and safety across the sector.

With consideration towards Sweden’s Universal healthcare system and public healthcare

benefits with no means testing, their current LTC staffing average hours may be a costly

system for the funding body to sustain as the population continues to age. This is reflected

in their higher spending on LTC at 3.20% of GDP compared to Australia’s 1.00%.

In the USA there are no nationally consistent minimum mandated staff to resident ratios.

There are 14 states who enforce mandated ratios as well as skill mix requirements, with the

remainder of states providing unenforceable guidelines. The requirements mandated by the

14 states vary considerably. For example, the state of New York requires that some nursing

services must be outsourced and cater to LTC resident emergencies through an on-call system.

Further, some care staff have the ability to administer low grade medication and undertake

other duties that in other states are restricted to nursing staff. These requirements reduce the

need for FTE nursing staff levels within LTC services.

A 2013 study was conducted across five sectors within LTC, including Adult Day Services

Centres, Home Health Agencies, Hospice, Nursing Homes and Residential Communities, to

investigate average trends and benchmarks across the nation.

In terms of staffing models, the study found that different LTC service types employed

different staff mixes. The results are presented in Graph below (we note that we have

removed the findings from the Home Health Agency sector as this does not constitute an LTC

permanent institution):

8 OECD, Highlights from: A Good Life in Old Age? Monitoring and Improving Quality in Long-Term Care, 2013.


Graph 12: Total Number and % Distribution of FTE Employees by LTC Service Type and Staff Type in the USA

Source: US Department of Health and Human Services, Long-Term Care Services in the United States: 2013

Overview, December 2013.

Further analysis on the hours of care per resident per day delivered found Nursing Home and

Residential Care Communities hours are broadly in line with Australian averages.

Graph 13: Average Care Hours Per Resident Per Day by LTC Service Type and Staff Type in USA and Australia

Source: US Department of Health and Human Services, Long-Term Care Services in the United States: 2013

Overview, December 2013.

The majority of USA states do not enforce fixed staffing ratios, which promotes staffing

flexibility for LTC services to meet fluctuating resident acuity levels. Despite the

fragmentation on staffing requirements across the USA, country-wide average hours on a

per resident per day basis appear reasonable compared to other OECD countries. However,

the USA employs a Safety Net healthcare system that is heavily means tested and provides

69.4

35.7

65.4

82.1

11.3

9.6

22.9

10.219.2

54.7

11.7 7.6

0

10

20

30

40

50

60

70

80

90

100

Adult Day ServicesCentres

Hospice Nursing Home Residential CareCommunity

FTE

Emp

loye

es b

y LT

C S

ervi

ce T

ype

Aide LPN or LVN RN

1.23

2.542.21 2.29

0.22

0.85

0.190.36

0.28

0.52

0.27

0.39

0

0.5

1

1.5

2

2.5

3

3.5

4

Adult Day ServicesCentres (USA)

Nursing Home (USA) Residential CareCommunity (USA)

Australia

Aide, Social Worker or Care Worker LPN, LVN or EN RN


limited public benefits. For the consumer, this means that majority of care costs are borne

as out of pocket expenses.

Whilst this funding mechanism places less pressure on the central funding system, those with

lower financial means may not have access to the level of care required due to high costs

and a possible lack of private health insurance to assist to make co-payments on the costs

of residential aged care. This may have a negative impact on those who cannot afford LTC

services in the form of reduced quality of life.

The UK does not impose fixed staff to resident ratios, however, there are some requirements

around experience and skill mixes. The UK Department of Health stipulates staffing standards

that LTC must demonstrate to meet, including:

“…staffing numbers and skill mix of qualified and unqualified staff must be appropriate to the

assessed needs of the service users, the size, layout and purpose of the homes at all times”;

and

“…ensure that, at all times, there are sufficient numbers of suitably qualified, skilled and

experienced persons employed for the purposes of carrying on the regulated activity”.

The staffing standards extend beyond clinical and care staff. In England, for example, it is a

requirement to have sufficient numbers of domestic staff to meet resident needs for nutrition

and cleanliness, with a minimum ratio of 50% trained to total domestic staff members.

Further, the registered manager must possess at least 2 years of senior management

experience and must have a National Vocational Qualification at level 4, or be a first-level RN

with a management qualification and must be registered with the National Care Standards

Commission.9

Broadly, staffing is based on methodologies employed across different LTC institutions,

including:

Workforce modelling based on prediction of resident future care needs;

Establishment setting considering the physical layout of the home and number of staff

members required to ensure visibility and safety; and

Daily planning/rostering, allowing flexibility of staffing levels to match changing

workloads.10

Further to this, guidelines on patient to staff ratios have been produced by the UK Royal

College of Nursing and suggest ratios of 1 staff to 5 patients for early shifts, 1 to 6 for late shifts

and 1 to 10 for night shifts with an average of 35% RNs and 65% care assistants. These,

however, are not enforced and it is reported that majority of nursing homes throughout the

UK do not adhere to the guidelines, predominantly due to shortages in nursing staff.11

9 Charlene Harrington et al. Journal of Nursing Scholarship, Nursing Home Staffing Standards and Staffing Levels in Six Countries, 29 October 2011. 10 European Network of Economic Policy Research Institutes, The Long-Term Care System for the Elderly I England, May 2010. 11 Royal College of Nursing, Guidance on Safe Nurse Staffing Levels in the UK, 2010.


The growing shortage of nursing staff has resulted in increasing personal carer hours and

declining nursing hours than historically observed. According to UK Royal College of Nursing

employment survey, there are many nursing homes who report that the decline in nursing

care hours is exposing more LTC services to clinical risks and inadequate numbers of RNs to

fulfil resident needs.

As a likely consequence of shortages in RNs and growing reliance on personal carers, according

to a 2017 study staff costs (as a percentage of income) fell by 58.5% for nursing care.

Conversely, costs for personal care staff increased by 54.8% as nursing homes employ more

care staff to offset the shortage in nurses. The growth in staffing costs has also been materially

impacted by the introduction of the National Living Wage.12

The decline in RNs, which is being exacerbated by Brexit, is driving up the wage costs for

nursing staff. Some providers are closing nursing wards and shifting towards personal care

provision. Our discussion with UK operators highlighted that at some homes, nearly all care

staff are personal carers, with the District Nurse visiting as required.

However, despite these trends and the introduction of other upskilling measures, the UK LTC

provision is reportedly in crisis with 2016 seeing an annual net loss in care homes and beds of

11% and 5% respectively.

The UK’s Safety Net funding system is also resulting in greater disparity in the investment and

quality of homes for people of different socio-demographic levels. New investment has been

targeted towards the private market and there is pressure on the government to provide

additional funding for subsidised care recipients as well as to encourage investment in new

builds.

From a cost perspective, the UK’s Safety Net LTC funding system and heavy income and

assets testing requires that the consumer contributes greatly to their costs of care and

accommodation. This alleviates the pressure placed on the UK’s central funding system

during a time of ageing population trends and is reflected in their proportionately low

spending on LTC per bed.

New developments are being targeted towards private paying clients and without adequate

funding and incentives, the UK’s home and bed numbers have been declining. This comes at

a time where further investment is needed to meet forecasted demand levels.

Similar to Australia, the UK College of Nursing is advocating for a greater nursing staff to

resident ratios based on concerns surrounding resident safety and quality of care as the

number of RNs working in the aged care sector continues to drop.

New Zealand does not enforce minimum staff to resident ratios, however, the Ministry of

Health has produced minimum staffing guidelines and care quality standards, stating that rest

homes “...must provide sufficient staff to meet the health and personal care needs of all

subsidised residents at all times”. Guidelines on staff to resident ratios are stipulated as

follows:

12 Knight Frank, Care Homes Trading Performance Review, 2017.


1 on-duty FTE staff member for 0 to 10 residents, equating to 8 to 0.8 hours per

resident per day;

1 on-duty FTE and 1 on-call staff member for 11 to 29 residents, equating to 0.73 to

0.28 per resident per day of on-duty staff;

2 on-duty FTE staff members for 30 to 59 residents, equating to 0.53 to 0.55 hours per

resident per day; and

3 on-duty FTE staff members for 60 residents and over, equating to 0.40 hours per

resident per day.13

Compared to Australian and other OECD county’s averages, New Zealand’s guidelines for

minimum staffing ratios are considerably lower. Further, staff to resident ratios across New

Zealand rest homes are on average higher than those stipulated by the Ministry of Health’s

guidelines.

Whilst New Zealand has sought to provide minimum staffing guidelines to LTC services, the

sector considers the minimum staff to resident guidelines to be lower than the staffing levels

required to ensure resident safety and quality of care.

13 Ministry of Health, Staffing Regulations for Residential Care Facilities, November 2004.


SECTION FOUR

ALTERNATIVE MODELS OF CARE


4. ALTERNATIVE MODELS OF CARE

Ansell Strategic has researched some prominent alternative care and staffing models across

Australia and internationally. The purpose of this analysis is to highlight some examples of

non-institutional, flexible staffing models that have thrived in Australia’s current regulatory

framework.

4.1 GREEN HOUSE MODEL

The Green House Project is a USA based organisation who has developed the Green House

model of care. This model was developed as a means to offer LTC services in the USA an

alternative to the traditional institutional model of care through more person-centred care

philosophies.

Some of the key features of this model include:

Each consumer has a dedicated staff member, or Care Companion, who is responsible

for consulting with the consumer regularly and developing a personal relationship

with them to provide emotional, physical and other support. This staffing model

supports the delivery of personalised care through the relationship built between

consumers and staff;

Consumers have their personal rooms with ensuite bathrooms to enhance their

privacy and dignity. These are typically clustered with 8 to 10 resident rooms;

The room areas are open and facing towards the communal dining and activity areas.

This allows consumers to have the option of easily becoming involved in social

activities or remain privately in their rooms; and

Strong utilisation of technology. For example, some homes have invested in virtual

gardens and other virtual sensory technologies for those with cognitive and physical

impairments to be stimulated and engaged beyond their physical limitations.14

In Australia, this model has gained popularity through demonstrated positive resident

outcomes, such as increased quality of life and consumer satisfaction living in the home,

reduced social isolation, enhanced resident engagement, reduced hospital admissions and

lower Medicare spending per resident.15 Some prominent Australian providers who have

adopted this care model include:

Mark Moran Group Vaucluse and Little Bay;

Australian Unity Drummond Place (Better Together Model, refer to this link to find

out more); and

Group Homes Australia.

14 Property Council of Australia, The Green House Project – A Residential Model for Aged Care, 15 October 2015. Retrieved from: . 15 Suzanne M Dyer et al., Medical Journal of Australia: Clustered Domestic Residential Aged Care in Australia: Fewer Hospitalisations and Better Quality of Life, 4 June 2018.

https://www.australianunity.com.au/retirement-communities/drummond-place


4.2 HOUSEHOLD MODEL

Similar to the Greenhouse Model, the Household model of care is another “cluster” model

that has gained popularity in Australia over the past decade. This model has been adopted by

Uniting NSW in an initiative to de-institutionalise and improve the quality and personalisation

of care of its nursing homes.

This model entails the development of smaller, household type residential aged care facilities

offering approximately 10 resident rooms. Each household offers consumers their personal

dining spaces, kitchen facilities and other intimate spaces to recreate a home-like, non-

institutional environment that supports consumers to remain living independently and in

control of their daily routines for longer as they age.

As one of the most popularly adopted alternative care models in Australia, there have been

numerous consumer and provider benefits associated with this model. Some of the reported

benefits include:

Higher quality of life for consumers;

Lower number of hospitalisations; and

Lower overall costs towards providing health and residential care in the Household

Model compared to traditional residential aged care models.16

Baptistcare is currently trialling the Household model in one of their existing homes named

Yallambee, located in Mundaring, Western Australia. The homes has 4 clusters of 10 rooms

comprising personalised, intimate spaces such as a kitchen, private dining room and lounge

areas to create a home-like environment for its residents. The home primarily accommodates

residents with dementia diagnosis.

There are

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