I indicated on the Policy in the dark page in the second slider (Turning everything in aged care upside down), that marketplace thinking turned the whole aged care process upside down and changed the way the providers of care thought. This is readily apparent if we look at some examples that illustrate this

I have argued that much that goes wrong is by good people who don’t believe that they are doing wrong. They are simply doing what they believe is required by the belief systems they use - but this may involve a lot of self deception.  But it is quite obvious that in other situations the conduct is deliberately fraudulent. There seems to be a fine and rather indistinct line between deceiving yourself into not knowing and finally knowing but doing it anyway. A sociopathic personality makes this more likely but it seems to go further than that. It seems to be a very slippery and wavy line that is easily crossed. I give examples of both below.

  • Slider 1: looks at some startling examples from the USA where true believers were able to deceive themselves and go on doing so long after their failings had been exposed - even reoffending. They are good examples because they illustrate how malleable we humans are and what we are capable of justifying. There are also examples of deliberate fraud.
  • Slider 2: looks at examples in Australia where it is clear the same patterns of behaviour are present.
  • Slider 3: turns the focus on the politicians that are accusing companies of fraud. They are setting an example themselves
  • Slider 4: reveals how changes in funding have changed the incentives in the system and encouraging providers to disregard their social responsibility to the less wealthy. The government are not prosecuting them for this.
  • Slider 5: moves the focus to the consequences of managerialism and the sort of complex top/down bureaucratised system that has been developed. The funding system is used as an example to illustrate the adverse consequences
  • Slider 6: looks at the problems created by an excess of government regulation. The Centre for Social Reform in the UK has written extensively about this and I look at their findings and views.
  • Slider 7: The final slider gives an Australian example of a small but very genuine step towards embracing community consultation by a not-for-profit group. The model they have adopted would not work with an aggressive for-profit but it is a good beginning.

Tip: Click to expand (+) or collapse (-) content on this page

Slider 1: Examples from the USA

Conflicting reports

In all three countries we get two sorts of reports. Those that are highly critical of the system and those who report on successful attempts to improve care in spite of the system. The latter group often do identify with it and are unwilling to criticise.  2015 New York Times article is different because it acknowledges and accepts the problems and also describes some of the attempts to do something about it.

- - - many facilities already are trying to “get it right” and have adapted their routines, policies, staffing and physical environment to better meet the individualized needs of their residents. Some of them have succeeded.

Source: Transforming Nursing Home Care Opinion pages The New York Times 1 April 2015

The problem for all these reformers is that they are doing it in spite of the system. Market pressures continue to dominate and as this report illustrates, it is unusual for reports in the USA to challenge the way markets operate and the fact that what these reformers are doing does not improve profitability and will not be willingly adopted.

What the reformers are up against

The two US examples I use later to illustrate what I call a culturopathy, are good examples of the way markeplace thinking works. The leaders and even the majority of staff in the first three examples below had no doubts that what they were doing was acceptable and desirable.  They were following established marketplace practices.

Example 1 - National Medical Enterprises (NME)

During the 1980s the US government introduced Diagnosis Related Groups (DRG’s) into general hospitals and these limited the amount of money the owners could make. At the same time there was concern about psychological problems in children and the government extended the insured cover of children from 1 month to 6 months. To free up the market it had lifted restrictions on where hospitals could be built and how many beds could be provided - much as is planned for aged care in Australia. Psychiatric care and drug dependency were not covered by DRG’s. They were paid per item of care.

The opportunity: NME saw the opportunity. It built large numbers of psychiatric and substance abuse hospitals. In the communities it ran scare advertisements about mental and substance abuse problems in children. Books were written that were designed to create anxiety and attract parents. The company described them as “Books as hooks”. Once someone was hooked (ie. enticed) to make a phone inquiry, the machinery persuading them into hospital started. Those who were not insured were ignored and whether you actually needed treatment was not a consideration. You were persuaded to come for assessment then told you needed treatment in hospital.

Anything that was legitimate in advertising in the wider marketplace was done. But it soon morphed further than that. The company offered large bounties paying $2000 for every head on a bed. Bounty hunters went into the community and even up to Canada to persuade people into hospital. They were offered free flights to the USA. But it went even further. Doctors were induced to sign certificates and employees were then sent out to kidnap children using these.

Consequences: Vast numbers of adults and children who did not need care in hospital, many of them normal gullible people were persuaded into hospital. Here they were kept for the duration of their insurance and were given as much “treatment” as could be fitted into each day, most of which was of no value at all. Many, but particularly children, were harmed.

The company was enormously profitable. Market analysts were ecstatic and its reputation for excellent care was accepted without question. Soon almost all of the many other companies that had entered the sector were doing the same.  What happened was describes in federal government investigation.

  •  Profits of misery: How Inpatient Psychiatric Treatment Bilks the System and Betrays our trust Hearing before the select committee on Children, youth and families, House of Representatives, Hearing Held in Washington, DC, April, 28, 1992 US Government Printing Office, Washington

Believing in what they were doing: Internal documents show that management, managers and large numbers of staff accepted the ridiculous justifications for this and enthusiastically embraced the business model.

It was a policeman that blew the whistle in 1991 when a teenager was kidnapped. He believed the parents and not the credible hospital. A public outcry gave past patients and whistleblowers the courage to speak out. State and federal inquiries followed. Criminal action ensued and many companies were fined. NME paid a massive fine and was forced to sell all its psychiatric and substance abuse hospitals. It changed its name to Tenet Healthcare.  I published an article and there is a web page describing this.

Example 2 - Sun Healthcare

The opportunity: During the 1990s this nursing home company exploited another loophole in the DRG regulations. Nursing homes were not subject to DRG payments. The DRG payments to hospitals were intended to cover rehabilitation and Sun saw the opportunity. It offered to provide step down care (rehabilitation) in its nursing homes. The hospitals were able to discharge the patients to the nursing homes much earlier keeping the money that was intended to include rehabilitation.

Consequences: In Sun’s nursing homes large amounts of rehabilitation were given and they were paid per item of service. They could not find enough US physiotherapists and occupational therapists so recruited them from around the world. Resources were diverted from the care of the frail elderly to rehabilitation. Vast profits were generated.  Care of the elderly was so poor that California barred the company from building more facilities there.

Growth and more growth: Sun borrowed and borrowed to buy or build more nursing homes. It became the Pacman of the sector Other nursing homes companies got the message and did the same things. There was a massive blowout in costs for the US Medicare system and insurers as the sector consolidated. Care deteriorated rapidly While this was unethical and not legitimate, it was not illegal. But most of these companies also overstepped the line and indulged in fraud as well.

Sun's chairman built a luxurious headquarters for the company and employees there worshipped their hard working leader. Few found time to go and visit the nursing homes that made the money.  He was very credible and had great political influence.

The founder of Sun Healthcare and many of the executives in other aged care companies received their early training in an aged care company called Hillhaven (the nurses in a publication describing what happened there called it "Unsafe Haven").  It was owned by NME.  Successful business practices are like virulent viruses - highly infectious.  When managers are successful everyone wants them and they are poached by competitors.  Those trained in Hillhaven subsequently migrated across the sector taking their successful ideas with them.

Collapse: When the government stopped this misuse of the system many of these companies entered bankruptcy and to keep them in business much of the fraud was not prosecuted.  Sun Healthcare's chairman never accepted that he or his company were a problem.  After he was fired from the company he had founded he blamed everyone else and continued to sell himself as a world authority in aged care, offering advice and his services to others.  

Another similar example: One of the CEOs and a member of the founding family of the largest Health care company in the USA, Columbia/HCA.  Its US $1.7 billion fraud was exposed in 1997 (as it was attempting to enter Australia). This CEO claimed that he was not to blame.  He considered himself the doyen of marketplace medicine and continued to advise others - even going to Canada to advise them. 

On other pages I describe how the pressures in the market system select for people who are adept at deluding themselves, the sort of people who are often totally unsuited to work in these vulnerable sectors. The leaders of NME, Sun Healthcare, HCA and then Tenet Healthcare are good examples.

Several web pages I wrote tell the story of Sun Healthcare and its charismatic leader and the palatial headquarters he built for the staff who adored and admired him.  They link to pages describing his Australian venture and his plans to enter our aged care system. 

Example 3 - Tenet Healthcare (the new name for NME)

NME never accepted that its business practices were responsible for its earlier downfall. When you have been really successful you hang on to that and refuse to acknowledge your failings.  It took years to recover and survive close government oversight.  As soon as no one was watching it happened again.

Open Heart surgery and other high risk surgery with high complication rates can prove very costly for hospitals under the DRG system because the DRG payment falls short of the costs. The companies did not want to operate on high risk patients because it became too expensive. To ensure that these patients were given the life saving surgery they needed hospitals were allowed to charge more for the most complex surgical cases. The hospitals decided which cases met the criteria and then billed for them. These were called Outlier or Stop-loss payments and were supposed to be for a small number of high risk patients.

In 1999 the restrictions imposed on NME (now Tenet healthcare)  after it's guilty plea in 1994 expired. Tenet was looking for opportunities and soon found them.  It saw the potential. It started building hospitals and creating departments that concentrated on providing these high risk surgical services (nurses complained they were understaffed). Not only did it benefit from these payments but it “up-coded” claiming extra payments for many patients that did not qualify. Its profits soared again.  Market analysts who remembered its previous success (and had not understood what happened) were delighted that it had not lost its Midas touch.  They praised it and its share price rocketed.

It was not government regulators or insurers who exposed what was happening but an analyst at the New York Times who analysed available data in 2002. They saw what was happening and notified authorities.  This was only one of the disturbing things they were doing.

Their most profitable hospital was the Redding Hospital in California. It specialised in heart surgery. It did 800 unnecessary open heart coronary bypass operations during this period. It wasn’t the accreditation agency, the state regulators or the insurers who realised what was happening but a priest who blew the whistle also in 2002.

Example 4 - Home care

Even home care in the USA has become a problem particularly when, as is planned for Consumer Directed Care, the gullible resident is given the money and is left to buy the care they want. They provide easy picking.

In May 2012 and again in July 2013, during the first two phases of Operation Home Alone, 29 defendants, including both Medicaid beneficiaries and the personal assistants, who claimed to have been providing personal assistant services, were charged with fraud. In this third round announced today, 14 additional defendants have been indicted, bringing the total number of defendants to 43.

Nationwide, one of the biggest fraud problems in the Medicaid program has been these personal assistant programs, particularly in cases that allow the Medicaid recipient to control the selection and payment of personal care attendants.

Source: Fourteen Indicted in Connection with Operation Home Alone 3 - FBI Press release, 5 Jun 2014

Example 5 - Outright planned fraud in home care

In 2015 over 500 home care agencies in Texas cooperated with a group of 6 doctors in defrauding Medicare of US $375 million.

The Akamnonus owned the largest agency that worked with Rockwall physician Jacques Roy. More than 500 Dallas-area home health care agencies have been accused of sending people, some of them homeless, to Roy for fraudulent treatments.

Source: Cedar Hill nurse admits role in $375M home health care fraud The Dallas Morning News 17 June 2015

Regulatory failure and the Community Aged Care Hub

These are only some of the many disturbing things that these and other companies did in the USA. Many thousands of people were involved. It is worth noting that in these and many of the other frauds that occurred the regulators, those who were charged with protecting the patients and residents, failed to do so. It was whistleblowers or independent observers who did so.

It was people in the community who responded.  This is why my proposal for a Community Aged Care Hub on the Aged Care Crisis web site focuses on giving the community and its representatives a place at the beside in nursing homes so that they can see what is happening and respond.  You cannot see what is happening from Canberra and a yearly visit which if focused on ticking boxes is not going to detect what is going on.

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Slider 2: Examples in Australia

There are several instances where considerable concern has been expressed about the way money has been taken from the system instead of going to those it was intended to benefit. Once again those accused are often indignant.  They don't think that they have been doing anything wrong.  We don't have the information needed to evaluate this fully but the allegations made and the denials are familiar and tell the story.

2012: Allegations of rorting

Nurses working for the Department of Health & Ageing (now the Department of Health), blew the whistle on aged care fraud and spoke out on the  ABC 7.30 Report. They spoke out about what they considered was extensive rorting of the system when making claims. They claimed that facilities were "treating the residents like a cash cow”. It was their job to oversee the payments. The department was not acting on the information they supplied. They were  "told to look the other way, tick it all, let it go through." and “told many, many times it was not my money."

The report also indicated that some consultants were advising nursing homes how to maximise their claims advertising that there were “hidden goldmines” which they could find. One client in their advertisement claimed they had been able to find “over $1 million” in funding.

When questioned later in parliament, the department explained that they were educating providers. No one was ever prosecuted.

Mr Coburn: - - - - the rates of incorrect claiming have remained high and, in fact, have edged up from around about 16 per cent when the review program started to around about 18 per cent on average for the last year and a half. - - - - - - (they are) offering workshops for providers and their staff who make claims and working with the industry - - -

Source: Senate Community Affairs Legislation Committee Estimates - Wed 13 Feb, 2013

In the 6 months since the exposure of "incorrect claiming" (not fraud!) the incidence has increased 4% and was nearing 20% - one fifth of all claims! Consider how much more embarrassing it would have been for government and for the department if the offenders had been prosecuted and it had all played out in open court.

2013: Home care

Government has been upbeat about the amount of money that it provides for home care, but out there in the marketplace there are others who have been taking a big cut of that money before it gets to the person who needs care. Some providers of home care have been accused of taking massive management fees while in practice, doing very little. Many consumer’s were unaware that this was happening. This was said in a 2013 senate inquiry:

Ms Lyttle, Chief Executive Officer, Elders Rights Advocacy: We have found instances with the community packages of various levels, Extended Aged Care as it was and the level 4s, where 40-plus per cent or more of the package is taken with administration and case management.

Ms Lyttle: They go on line and they have a look at what the provider gets to provide this level of care and they say, 'Hang on, we're being told we can have this many dollars'—$450, $500 or whatever—and an 80-plus-year-old client said to me the other day, 'They're getting 51 per cent of my package'—of the amount that is being given—'so what's happening? I don't feel that there is that much administration or case management going on.'

We have only had about one successful time that we have challenged. It was when it was closer to 60 per cent of the package and the provider actually put it on some information to us about what was being charged for case management.

Senator BOYCE: So it is not triaged in anyway whatsoever? So there is no-one checking what is going on.

Source: Community Affairs References Committee - 16/12/2013 - Care and management of younger and older Australians living with dementia and behavioural and psychiatric symptoms of dementia. Hansard

2013/14: The Dementia Supplement

In the same Community Affairs References Committee into aged care issues on 16 December 2013, politicians expressed some concern about possible abuse of the dementia supplement that they had heard about. They asked about this but were not given evidence.

Because dementia was occasionally such a difficult problem to manage, a special supplement intended to go to the worst 1-2% had been introduced to help the providers. The nursing homes assessed whether residents qualified for this extra money and billed for it. This is very similar to the outlier payments made for high risk surgical cases in the USA.  This is what the facilities the government was trying to help did.

In 2014 Australian Ageing Agenda obtained government documents about the dementia supplement under FOI and published.

Very soon more than a quarter of nursing homes were claiming for “more than 20 per cent of their residents, including a very small number of services that made claims for their entire resident population - - ”.

Some 6 per cent of facilities claimed the supplement for 50 per cent or more of their residents.

The $16-per-day dementia supplement was intended to support the small group of residents with very severe or extreme behaviours associated with dementia not already covered within the ACFI, which the department estimated to be approximately 2.2 per cent of residents.

Source: Govt documents shed light on dementia supplement claims Australian Ageing Agenda 26 Sept 2014

There was a massive cost blowout and the government were forced to abolish the supplement.

COTA Australia agrees with Sxxxxx Jxxxx that termination of the supplement was inevitable. Many providers were receiving very substantial extra funds without validation and with no guarantee of better outcomes for people with severe dementia symptoms

Source: The Senate Questions without Notice Speech Senator Fawcett 1 Sept 2014

2015: Consumer Directed Care (CDC)

With Consumer Directed Care in its infancy and introduced only into home care, there are already allegations that providers are taking large chunks of this for themselves.  With CDC it becomes easier to see what is happening and those consumers who look, are not happy.

Here is an example where a CDC provider is taking one third (33%) of the money the family thought they would get for the care they needed:

STEVE CANNANE, PRESENTER: For nearly 70,000 Australians who rely on federally funded in-home care, a huge change is underway - and it's left many seniors confused and angry.

A new scheme called Consumer Directed Care is supposed to give people more control over their own care packages.

But it's also left thousands questioning complicated funding formulas and fees that can sometimes eat up nearly half of what their packages are worth.

NORMAN HERMANT: - - - But the changes have also revealed just how much money is being taken by the care providers in fees - and the recipients are not happy.

NORMAN HERMANT: In John's case, his provider says last year he received a care package worth $44,200. But he lost $14,560 of that in fees.

Source: Living with dementia: Cxxx and John Cxxxx’s story ABC Lateline, 29 Sep 2015

Many providers are using the extra administration requirements of CDC as an excuse to push up these fees.  From all the hype, some consumers may have got the impression that they would have control of the money and the care that was given, so the fees would be less.  Even a Case Manager was alarmed and spoke out.   ABC News published the same story that had appeared on Lateline above.

In some cases fees take up anywhere from a third to nearly half the value of the care packages.

He (cancer sufferer) is on an in-home care package that last year was worth more than $44,000, but of that, $14,560 was paid in fees.

(another recipient) About 44 per cent of that amount goes to cover fees. Ms Wilson said she did not think she was getting her money's worth.

"As a case manager I can't help when I go out and think if this was my mum, if this was me, am I OK with the cost that this case management is costing?" she (anonymous case manager) said.

"Because if you're looking at $80 an hour for case management and if you're looking at $40 for a shower, there's a lot of reallocation of funds that could be made if you don't need that case management."

Source: In-home care recipients complain packages 'being fleeced' by not-for-profit providers charging high fees ABC News 1 Oct 2015

2015: Fraud allegations

In December 2015, the minister for health spoke out angrily about “bogus claims for the high-level funding” that had created “a $150 million blowout” in the Aged Care Funding Instrument (ACFI) from extra money given to providers. It seems that the government had done it again and in spite of the dementia debacle, had been so gullible and easily persuadable that they trusted the industry again. They had attempted to help providers by allowing them to apply for extra funding to help a small number of “patients with complex health needs”. Like Tenet in the USA, Australian companies seized the opportunity a second time.

Canberra will bring in huge new fines in 2016 to curb a growing trend of incorrect, or deliberately crooked, claims for government funding in the aged care sector being lodged by dodgy providers.

The fines of $10,800 per false claim will be applied for the first time and will be accompanied by stronger auditing and more deliberate targeting of assistance to help elderly patients with complex health needs

The move - - - is set to claw back about $472 million for the cash-strapped federal budget.

Source: MYEFO budget update: Big fines aim to stop fraud in aged care Sydney Morning Herald 15 Dec 2015

As in the case of the Dementia supplement the government stopped the funding.

In yesterday’s Mid-Year Economic and Fiscal Outlook (MYEFO) the government revealed it was cutting subsidies on certain claims in the ‘complex health care’ domain of ACFI to save $472 million over the forward estimates.

In a media release this morning Minister for Aged Care Sussan Ley said these claims were “consistently higher than expected and not consistent with claiming practices in other ACFI areas.”

Ms Ley said figures showed as many as one-in-eight of 20,000 ACFI claims audited in 2014-15 were deemed to be incorrect or false. “This figure is already tracking even higher at one-in-seven in 2015-16,” she said.

The difficulties and costs in prosecuting individual instances was referred to as “sharp practice’ which it described as a claim that “may be legitimate when assessed strictly against funding guidelines, but takes advantage of ambiguities in the rules for maximum financial gain.”

It appeared that this had been going on for a long time and there had been ongoing discussions. Only 2 weeks before “the four national peak bodies representing aged care providers had sought assurances from the government that it would not act to reduce ACFI expenditure” after the blowout.

Source: Government clamps down on ACFI claims Australian Ageing Agenda 16 Dec 2015

The industry indignantly denied the allegations of fraud claiming that the increase was due to “increased frailty” and that the minister had supplied no evidence. The industry was appalled and sought retractions from the minister. Further funding would be “ripped from aged care when growth in costs are three times what government recognises is extremely disappointing.”

Sxxxxx Jxxxx CEO of Hxxxxxxxcare and often a critic of for-profit providers, has spoken out on the Hxxxxxxcare website about the perverse incentives in the ACFI funding including the Complex Health Care component.  He gives some interesting figures.

The Federal Budget on May 3 included aged care savings of $1.2 billion through changes to ACFI and a 50 per cent reduction in the indexation of ACFI's Complex Health Care (CHC) component, addressing an anticipated $3.8 billion overrun in spending.

Dr Jxxxx said that with the perverse incentives in the current subsidy regime, it was of little surprise that projections showed that subsidies will be $1 billion per annum over budget.

Source: Call for an increased focus on wellness in ACFI Hxxxxxxxcare 10 May 2016

Jxxxx had examined the annual reports of the three listed aged care providers. He found "Together, these providers on average had subsidies of almost $20 per-person, per-day (pppd) above the industry average which was $156 pppd.” That is a lot of money when you look at the additional $730 per person per year and the number of residents in their homes.

Many of the other for-profit as well as some not-for-profits included in the $156 pppd group would have been doing this too so that figure is likely to be inflated. The trend for the most strongly profit driven to lead the way in seizing opportunities is nevertheless apparent.

The way the system was rorted is explored further under slider 5 (Structure ,order and process) on this page.

The industry's response: The industry was soon mobilising in response. The Guild representing the largest and most profitable companies led the way. They decried the continued cuts in funding, cried poor and blamed the government. The industry had already released “a budget analysis by Ansell Strategic commissioned by industry peak body Leading Age Services Australia (LASA), which found the proposed changes to ACFI would equate to savings of $350 million in excess of those forecast by government in the budget and MYEFO”.

It was claimed that this would undo much of the good that the Living Longer Living Better reforms had resulted in. The industry would not be able to meet the needs of the increasing numbers of elderly.

What is interesting is the comments coming from knowledgeable people in the industry at the foot of the page.

While critical of the government cuts, the comments were even more critical of the government and the Guild. Perhaps they knew where all the money had gone.


First comment: These citizens are already being forgotten by most of the political parties as their votes wont go in the barrel and they are obviously not important enough to be given the extra funding they need as the numbers of frail elderly grows.

Second Comment: But I’m not certain The Guild or our other peak bodies are up to the task.

Crying poor when you’re on track for a 25% annual profit increase, spruiking your next IPO and acquiring facilities by the dozen will be a tough sell.

Lobbying for deregulation while asking for more government intervention or promoting high standards of care while advocating for the removal of RNs has shot your credibility. - - - - even your own industry finds your inconsistent messages quite curious.

- - - the Commonwealth probably wont be too keen on funding your desire to turn a Porsche into a Bugatti.

Third comment: As you have both identified, we’ve been hijacked by profit-driven charlatans and funded by one-term bureaucrats who don’t think anyone will notice if Aged Care is all show and no go.

- - - - but, on closer inspection, is just meaningless babble that wont be funded, wont be practiced and wont ever have a chance of working under our existing model.

We seem to have an aged care system that is constantly looking for where it can make money and any opportunity is seized. But we are a wealthy nation by international standards and our national debt is less than most other countries so does it really matter?

What has happened to care:  We need to ask about what happens to care. We know what happened in the USA because they collect information.  There is plenty on the Corporate Medicine website.  But because we don't collect and publish data on care and quality of life in Australia we cannot be sure.  All we can do is look at what whistleblowers are saying and what the press is publishing.  I wrote about this in the previous section 19 years of care.

Good advice

In 2012 the late Adele Horin, an insightful journalist looked at what was happening to residents and at where all the money was going. She concluded:

But the prospect of giving the industry access to hundreds of millions more dollars without requiring a greater level of staffing, transparency and accountability is misguided.

Source: Care the key in ending aged 'hell' Sydney Morning Herald 14 April 2012.

That sounds like good advice.  The government and the community should use the marketplace power that the funding gives them to negotiate real change.

A distorted system:

Its not just care - its the way the entire system is distorted by the way people now think about it.  Its fair game and so are the residents - but much of what happens is not deliberate.  It comes from applying market ideas and market thinking to a system where it does not work.

When looking at the US examples I explained how the way the market thinks caused companies to go out and, by whatever means they could, get just about anyone into their hospitals - provided they were covered by insurance.  Once there they focused on how much lucrative treatment they could provide regardless of its value or the harm done - even splitting hundreds of chests apart to get at their hearts when they did not need this surgery. 

I explained how vast resources and staff were recruited to give rehabilitation treatments, more than many needed, while in the same nursing homes the elderly, who the companies founder claimed did not need nurses just to bath and wipe their bottoms were neglected.

US hospitals in Australia: The company NME and the vice-president in charge of the hospital that did those open heart operations both owned and operated hospitals in Australia between 1991 and 1996.  A government investigator supplied with the information about the company in 1993 predicted that it might do something like this in cardiology.  Australia he explained was vulnerable to its business practices.  He was talking about Australia and he thought it could happen here.  State politicians simply ignored his advice.  It happened 10 years later but in the USA and not Australia.  This might have been Australia and not the USA.

The second company, Sun Healthcare, bought a number of small Australian hospitals in 1997  planning to supply rehabilitation there.  It planned to expand into nursing homes and probably do the same there. Its founder visited and spoke to our politicians.  Soon after this the minister for health announced his plans to revolutionise Australian health care by using step down care.

It is the personality and the thinking of the people who were so strongly motivated and did all this that is so interesting.  Why did this happen and why did so many of these people have no doubts about what they were doing?

The Community Aged Care Hub would know what was happening in their communities and whether the management fees were justified. As a customer, they would have some control over who operated in their community. If they were unhappy and could do this better and cheaper, they might well assume responsibility for managing some of the services themselves.

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Slider 3: The pot calling the kettle black

Quite apart from its role in creating and supporting a system that is not working, governments do not come out of this well and this is in part because they now operate in the same way.

The Living Longer Living Better reforms

As Ron Williams indicated in his 1992 book Remission Impossible, both parties saw a consolidated corporate marketplace dominated by large megacorps as the future for health and so aged care. Both parties planned to invite the massive global megacorps into Australia. Their early efforts were unsuccessful and they have instead looked to support and build our own corporations.

That broad policy is still integral to the belief system they subscribe to even though they don’t say so publicly. It was implied in the 2010 productivity commission report, was commenced by labor and implemented by Abbott who placed markets at the centre of the changes to aged care that were introduced.

In the Living Longer Living Better reforms, we were promised that this was for our benefit.  It is clear from the industry's comments that they too saw this as for their benefit, as well as an opportunity to consolidate with the government's blessing - and then be in a position to capitalise on the opportunities presented by the international trade agreements government was making. 

Was the government's extra funding really to improve care - or was it in order to get the market to consolidate and develop the big aggressive companies needed to compete with others and capitalise on the profits on offer in Asia? The Australian has reported that 150 health and aged care operators met Chinese delegates at a conference in China in 2015.

  •  Healthy profits in China’s booming medical market The Australian 23 May 2016 (Paywall)

Not only have companies received a massive boost in Refundable Accommodation Deposits (RADs), but their claims made for the care of residents have jumped from 20% from an average of $131 per patient per day in 2012, to $156 in 2015. Some of the market listed companies are making as much as an average of $170 per person per day.  

Where did all this money go?  Certainly not to more nurses. Definitely into acquisitions, consolidation, marketing and to paying marketplace consultants of all sorts.  Perhaps some goes on "splurging on a black Ferrari 458 Italia and a red Lamborghini Aventador, private operators are battling perceptions they are systematically rorting government funding to build their businesses and fatten returns".

  • Health Department set to audit FPCompanyI over aged-care claims The Australian 7 June 2016  (Paywall)

Government and market have both been focussed on consolidation and participation in global markets in the face of growing evidence over the years  that this was not in the best interests of the aged care system itself and those receiving care would be worse off. They were prepared to deceive us in order to meet their objectives.

Belief and evidence are not a good mix: It would be interesting to know if this was deliberate deceit or simply blindness due to an inability to challenge belief. I personally think that because their beliefs were so strong they had no doubts that this was always beneficial and the best thing for us. It has not been.

As strong critic Robert Kuttner explained, when policy was driven by a belief in free markets then, if a market did not work, it was because it was not free enough and steps needed to be taken to remove any obstructions to legitimate business practices.  In corporate jargon this was known as liberalising it.

The point here: But the point is they were prepared to deceive us and they are now complaining when the market that they created is prepared to do the same thing and deceive them.

But there is another example.

Political donations: Political donations and the access and influence this has given those donors has been a problem for many many years and it has seriously compromised our democracy. It has been ongoing for years and years.  I remember the brown paper packets used in Queensland by the Belke Peterson government, the ministers who went to prison and the police commissioner that Belke Petersen arranged to get a knighthood.  He was running a protection racket in the brothels of the city.

ABC Four Corners on Monday 23rd May 2016 exposed the way in which loopholes in the regulations governing political donations were being systematically and deliberately exploited by parties to get more money. Insiders explained what was happening and how it was done. This was systematic and deliberate, but explained away.

For the holier than thou health minister to piously accuse providers of fraud and fine them large sums for doing the same things as so many in her party in parliament are doing is an affront and we can understand why the providers are so incensed.

We can raise the same issue when politicians criticise tax avoidance and a multitude of other scams as well as their attempts to destroy each others credibility by exposing any hint of corruption in a politicians past, and mounting Royal Commissions.  Politicians themselves have been poster boys, showing how bending the system is done and how profitable and easy it is to do.

Of course we do need to do all these things to expose corruption in all these sectors - but its the hypocrisy that stinks and why political distrust is so deep in our community.

But we need to remember that they don’t see it this way! Once you start believing, it becomes a habit and you come to believe almost anything you like.

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Slider 4: Rules made to be broken

The Combined Pensioners and Superannuants Association (CPSA) has looked at the way the funding of aged care homes changed recently.  It found that the Abbott government gave the industry a massive boost in funding by abolishing the distinction between high care and low care, making everyone pay bonds. It also removed restrictions on the size of bonds, in effect allowing providers to charge what the market would bear.

Within a year, average bonds increased by $37,000, which is a massive injection of additional funds when you consider the number of people now paying bonds.  The majority of those needing nursing home care are now high care.

Has this massive injection of funds gone to pay for more nurses and so better care? Well, not that anyone can see. The big companies are getting more money by having sicker residents, but at the same time reducing the costs of staff. 

Adequate staffing is the most critical factor in care and Australia falls way behind in providing the 4.1 hours of care a day considered to be the minimum safe level in the USA.  So where is the money going.  Could it be funding the participants in the market game, the big takeovers, the IPOs and the massive amount of money the founders of these companies make.

A two tiered system: To ensure equity there is a regulation that 40% of nursing homes residents must be concessional residents. Concessional residents are those unable to pay for their accommodation in full. The government pays $54 per day for new homes and $34 for old homes for each concessional resident. If the number of concessional residents drops below 40% then the government reduces this and pays $14 and $8 less per day respectively for all the remaining concessional holders - an annual penalty in the $112,000 to $199,000 range. This was a significant penalty which ensured that provides kept above the 40% mark.

But since the $37,000 increase in funding from bonds by those who pay their own way it has become more profitable for the companies to fill those beds with people who are paying themselves. There is no incentive for them to meet this 40% requirement. The government is looking the other way and is not sanctioning those who don’t meet this legal requirement.

For example, it has taken FPCompanyH just a year to bring the average concessional rate in its homes down to 34% - but they have not been sanctioned for doing this. The lower they can get, the less they will be penalised and the more profit they will make. It takes time to get it down because they have to wait for existing concessional payers to die off.  Other providers will soon be competing. 

So, concessional consumers will either struggle to find a bed, or not-for-profits will have to pick up the slack. This will give the not-for-profits less money, so less to spend on care.  It will make them even less competitive. So we are looking at much more expensive homes for those who are assessed as being able to pay - and more underfunded homes for those who can’t - a two tiered system.

CPSA has done the figures - read the original article:

Key to this (a two tiered system) is two aged care reform measures.

First, by abolishing the distinction between high care and low care nursing homes, aged care providers were given the ability to charge all residents bonds and accommodation payments regardless of their care needs.

Second, aged care providers were given the power to charge bonds and accommodation payments at the rate the market would bear.

2014/15 marks the beginning of an era in which nursing homes can compete for bond paying residents at the expense of concessional residents.

Source: Nursing home bonanza CPSA Oct 1, 2015

The proposed Community Aged Care Hub would be acutely aware of problems if the poorer concessional payers in their communities were not being cared for properly in a two tiered system.  They would use their market power and their influence in the community and with government to address this.

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Slider 5: Structure, order and process

Evolutionary pressures generate new more robust species: The marketplace beliefs that originated in the 1970/80’s sought to restructure our society as free markets. They accomplished this by training managers in university economic and business departments across the world. This army of trained managers became consultants and managers across the business world and government. They spread beyond that into our not-for-profit, sporting, arts and other institutions. Every sector of our society has been tightly ordered and structured along the hierarchical lines required by the patterns of economic thinking that society now adopted.

As the result of the pressures generated within the new system much of mankind in western countries has mutated from homo sapiens with all its humanitarian attributes, values and norms to a new species. In homo economicus these attributes are not needed to succeed.   They are not used so are underdeveloped!

It was no accident that the first book in Australia that suggested we do something about this was called “The Human Costs of Managerialism: Advocating the Recovery of Humanity”. It was edited by Stuart Rees and published in 1995. Its primary concern was the loss of our humanity that was already occurring as a result of these changes.

A new language: As these writers described and Saul later documented this change required a whole new lexicon of words creating images and positive associations, an illusionary world rendering us unconscious of what was happening and unaware that we were losing our humanity. Words with well defined meanings were coupled with words that had strong associative positive meanings so that in many instances they lost much of their denotative meaning. “Quality” a good word used in the right context but one with strong associative meanings was attached to almost any activity that was part of the new structure, whether appropriate or not. Often its only purpose was to create a positive image and give somthing of doubtful legitimacy a semblance of legitimacy. So we have quality standards, quality agency and a million more.

For the ideologue, language itself becomes the message because there is no doubt. In a more sensible society, language is just the tool of communication. p 42

The sign of a sick civilization is the growth of an obscure, closed language that seeks to prevent communication. p 57

Source: John Ralston Saul "The Unconscious Civilization"-The Massey lectures Penguin books 1997

Control and order: Aged care has been ever more tightly controlled and increasingly ordered and structured into processes that must be followed. They are structured and ordered in a hierarchical top/down manner. Control is centralised, turning it into a giant bureaucracy serving the government and the market system that it is organised to support.

Our gut reaction as a community when things go wrong is to press for more oversight, order, control and to punish offenders.  But in a complex world our efforts to create order never completely embrace the complex real world so there are weaknesses.  Plugging a hole in the rusty bucket will only be temporary and it will soon leak again. it will not be long before there is another leak.

The centralisation and control of all activities through the myagedcare web site is a good example of a centralised attempt to control and create a highly ordered system when confronted by a complex world.

With increased complexity people in need fall through the cracks.  The system responds to its own requirements and not to the individual needs of those it should serve. There are good things in the system but the process is flawed and for many this is a problem.

July's reforms have created a system so complex that stressed-out relatives need to use consultancy firms just to get their loved ones into care, writes Harriet Alexander.

"People can't navigate it. I can't even navigate it. They're all absolutely sound policies, strategies, just the delivery of them is not."

But a change to the funding model and concessions granted to aged-care providers have resulted in a vastly more complicated system, including a new means assessment test that takes into account assets as well as income, a bond that operates on a sliding scale and a range of payment options.

Source: Aged-care nightmare: bound tight in red tape Sydney Morning Herald 11 Apr 2015

Early feedback from consumers and their advocates was that the new system was a vast improvement on the old, but that it was also vastly more complicated. As the Herald's Harriet Alexander reported, the resulting explosion in choices and paperwork meant that even the experts had trouble navigating it. Providers continue to "cherry pick" clients and dictate the terms of their stay, for example by refusing would-be residents who exceed body weight limits.

There were concerning reports that providers, rather than spending the higher subsidies for people with greater care needs on extra care for those people, were pocketing them as profits.

Source: Aged care bed licences should be issued to consumers not providers Sydney Morning Herald 7 Jan 2016

In the next quote the family was struggling to find a suitable palliative care facility where their family member could die in comfort. They were unable to do so.

"What upset me as well was I didn't know where we were going and what we should be doing and who we should be talking to.”

As well as the overwhelming grief of losing a loved one, Catherine says her family has been left feeling “fractured” by a system that seemed disjointed.

Source: Seeking a home close to the end Bendigo Advertiser 8 an 2016

In a letter to the Gympy Times a lady just discharged from hospital and needing help at home describes just how unresponsive and frustrating the complex Myagedcare system is, when compared with the previous service - and the consequences for those who have to use it.  How much simpler if she had a real local person who knew what was happening locally that she she could talk to.

She describes just how long it took to get an assessment done and then get someone to help her shower. Then there was the problem in getting a chair to sit in adjusted. She indicated that “when the government takes over, things get bad”.

The funding system - The Aged Care Funding Instrument (ACFI)

I want to look at the way funding is done through the ACFI. It is a good illustration of the way order and process malfunction when imposed on the complex intimate, personal and individualised care that is required in the sector.

The funding is centralised, structured and process driven. Because aged care is complex and varied, this simply cannot accommodate to everyone's needs. It lacks flexibility and cannot adapt to the day to day needs of the elderly. The process is even reduced to an impersonal tallying of minor matters and then adding up the points. How do you accommodate to individual needs when you are faced with this.

"Another example is that in the CHC (Complex Health Care) area, if you take the blood pressure of someone daily, you are 3 out of 10 points towards getting the highest subsidy score for that section! If you also give everyone elasticised, arthritic bandages you get another 30 per cent. And we wonder why providers are maxing out!

Source: Call for an increased focus on wellness in ACFI HxxxxxxxxCare, 10 May 2016

By doing a multitude of simple things that are not needed, you can manipulate the system and push the resident into another category where you will be paid more for providing the same care.

Humanity: The system lacks humanity because it is process driven. It is inflexible and becomes routinised.  That inhibits reflection on the consequences of what we do.  Those who administer the funding are far away from the bed side and unable to imagine the lives of those they are serving and enter into them. As a consequence the system is unable to respond to and address the breadth or depth of individual need and suffering.

It is impersonal and inhuman because the humans involved are constrained by its hierarchical and tight structure and the requirement to follow processes. The wriggle room that makes systems malleable and adaptable is absent. It is an impersonal mechanism unable by itself to respond flexibly to human need.

The Physiotherapy Association has been worried about ACFI funding. It surveyed its members views in 2007, 2009 and 2014. In the 2014 report, they called for a revision of the ACFI. In its report it concluded:

Optimal pain management has been compromised since the introduction of the Aged Care Funding Instrument (ACFI)

The current funding model is prescriptive, rigid and not based on clinical assessment, need, or best practice.

The model should support resident independence and allow for preventative interventions, exercise, falls prevention and an emphasis on mobility and function.

Respondents have raised concerns about pay, staffing, and professional standing; technology, equipment and facilities; training; treatments and interventions; and the administration of the ACFI and RACFs

Source: ACFI Survey 2014 Australian Physiotherapy Association.

People fall through the cracks: Treatment is distorted by the need to comply with what the system imposes and not what the recipient of the care needs to derive benefit. It is difficult to change and does not respond to changing circumstances. It is so rigid that it does not and often cannot meet peoples needs.

Motivated people do succeed in using it to benefit the elderly they are caring for, but this is often by finding a way around the intricacies of the funding system, and not because of it. It happens in spite of the system.

Exploiting loopholes: As illustrated in the previous sliders, profit driven entities readily find their way through the cracks in the process and exploit these to maximise their profits.  The founding father of 20th century free markets, Milton Friedman, asserted that corporate executives had a fiduciary duty to maximise profits within the limits of the law and it is not illegal to do this.  So we have a highly structured and ordered system that by its very nature has holes in it and a market that true believers see as having a responsibility to exploit any loopholes in the system.

It happened with the funding of the severe dementia supplement and more recently, the extra payments that Sussan Ley is so upset about. There are several examples of this in the USA where any loophole in the system has seen multiple big companies stampede through and make huge profits. Once one finds a hole others must follow to compete.  Ley called it fraud. We may consider it immoral, unethical and antisocial, but legally it is not fraud.  Which is why Ley can only bluster and threaten - regulate to stop that hole or remove that particular source of funding and deprive those who need it..

The wrong focus and incentives: Funding is essentially based on a model of care which sees residents as continually declining, when a major focus of care should be on re-ablement - the restoration and preservation of function to improve well-being. Providers receive more funding when patients decline and become sicker and none for measures that improve mobility and prevent that decline - a disincentive for good care.

In 2016, HealthTimes supported the physiotherapists indicating that the ACFI funding did not pay for treatment that worked, but instead for inferior methods of dealing with pain and illness.

Aged care residents are missing out on exercise as a vital, evidence-based treatment for pain management under the Aged Care Funding Instrument (ACFI).

Australia’s peak physiotherapy body says residents are limited to choosing from a physiotherapist using massage or Transcutaneous Electrical Nerve Stimulation (TENS) regardless of their condition, despite evidence showing the overwhelming benefits of using exercise to manage pain.

“ - - - at the moment they are not allowed to choose exercise and a lot of them want it.”

Under the changes to scores, complex pain management (ACFI item 12.4b) by allied heath professionals - - - will receive a reduced score from six to four points. A timing requirement will also be added, requiring 120 minutes of treatment delivery over a week.

The APA has labelled the 120 minute requirement as “excessive”. It says residents will achieve clinical improvement in their pain management with 20 minute sessions, four times a week with allied health professionals.

Source: Physiotherapists disappointed with aged care reforms Health Times 19 May 2016

The Australian Physiotherapy Association (APA) wants the government to amend the Aged Care Funding Instrument (ACFI) to enable residents to access clinically-prescribed and evidence-based therapies managed by allied health professionals including physiotherapist-led exercise.

“- - the announced changes will - - - see client care move further away from contemporary practice, limiting existing services, and prohibiting evidence based services and consumer choice,”

- - “It’s time to say goodbye to ACFI and start thinking about what makes sense soon, - - “

Source: Call for ACFI overhaul to cover exercise therapy for pain management Australian Ageing Agenda 1 June 2016

The system is paying them less per hour to give treatment that is not only less effective, but is not financially viable. If they paid better for much better treatment that took a lot less time it would cost less and be financially viable for physiotherapists. This is very like managed care in the USA where managed care staff tell doctors how they can or cannot treat their patients.

Working the system for profit: Businesses that follow the money rather than the needs of residents are able to make profits by artificially increasing dependency and by providing treatments that often have little long term benefits to these residents simply because they are permitted by the funding instrument. There is little incentive to maintain their well-being and health.

Staff are diverted from the care of residents in order to create financial documents that maximise the potential profits that can be derived from each situation. Consultants advertise their willingness to help them do this more effectively. One in eight claims are incorrect and the industry has been accused of fraud.

Government subsidies in aged care often serve the interests of the providers more than residents.

Currently, funding for aged care homes is based on a 'terminal decline model' rather than 'restorative care'. The provider receives additional subsidies when a resident declines. There is no financial incentive for providers to introduce services such as strength training or lifestyle programs that would improve residents' quality of life. Instead, a provider is rewarded for promoting dependency rather than encouraging wellness.

Many providers employ staff purely to complete the ACFI paperwork. The role of these staff is to generate income for the employers rather than provide care to residents. Some providers employ Aged Care Consultants who specialise in "ACFI optimization".

Source: Optimising aged care funding On Line Opinion 30 May 2016

In an article on the HxxxxxCare website, Dr Sxxxxx Jxxxx is pressing for changes to the ACFI. He indicates that payments are based on a point system dividing those needing pain relief into low medium and high.  The Physiotherapy Association had been complaining about all this for 2 years.

"Doesn't it seems abnormal that 51 per cent of all residents receive a High claim? That’s because there are perverse incentives within the Instrument. A provider is being rewarded for promoting dependency and invasive procedures and by not encouraging wellness.

Source: Call for an increased focus on wellness in ACFI Hxxxxxxxxcare 10 May 2016

The ACFI creates financial incentives to treat residents, which encourage rorts and over-servicing. It also channels funding to passive treatments to manage pain rather than evidence-based, active treatments and causes resident dependence, rather than developing independence and function and the quality of residents’ life.

Source: ACFI Survey 2014 Australian Physiotherapy Association.

It seems that the government was serious about the way it was being exploited.  The report does not say how many, if any paid the heavy fines Ley threatened.  My guess is no-one, else we would have heard.

The government has taken action against 11 providers in the past three years for providing false, misleading or inaccurate information, with five reappraising all residents following repeated findings of incorrect claiming.

Source: Health Department set to audit FPCompanyI over aged-care claims The Australian 7 June 2016  (Paywall)

It is interesting that it is a leading member usually of the not-for-profits who is usually very critical of the for-profits who is speaking up for them and claiming it was not intentional and blaming the funding system.

- - - - he thought those accused of the practice were not “rorting” but maxing out on a system the government had given them. Dr Jxxxx said the aged­care funding model rewarded providers for keeping residents frail, rather than promoting wellness.

“I don’t think ... there is any fraud going on, but I do believe people are maxing out on a system they have been given by the Australian government,” he said.

You get more funds for keeping people in bed and giving them as many meds as possible ... this is a system that has perverse incentives.”

Jxxxx Kxxxx, chief executive of Aged and Community Services Australia, which is launching a campaign next week against the funding cuts, denied any suggestion of rorting by the sector

Source: Aged­ care providers ‘maxing’ on funding: HxxxxxxCare head The Australian 9 June 2016 (Paywall)

Hardly surprising that it seems to be the market listed companies and particularly FPCompanyI that was floated on the share market by Private Euity and has been promising so much growth and doing so well that seems to be in most trouble on this.

According to company filings, an astonishing 91.3 per cent of its residents were classified high-care in June last year, attracting the highest level of funding.

The Australian revealed this week that FPCompanyI was among a handful of operators being audited by the Department of Social Services over its classification of residents.

The government is now looking at introducing independent assessors to review a resident’s care needs, a move that is strongly rejected by the sector.

Source: Aged care and fast money an unhealthy mix The Australian 11 June 2016  (Paywall)

At long last the government seems to have got the message. It is going to bring in independent assessors which in itself is going to push up costs and use up more resources.   If only they had structured aged care as a flexible regional fregional service working closely with an empowered community, the infrastructure would be there.  In a sensible independent assessors or at least oversight of funding would have been part of the system.

But wait, the two powerful industry bodies, LASA and ACSA, have announced that they are mounting a massive campaign during the remainder of this election attacking the government in all its electorates.. There are vast numbers of free local newspapers across the regions in Australia, operated by APN, Newscorp and perhaps others. They are always looking for copy. It will be interesting to see if the government buckles and agrees to reinstate funding or finds another face saving way of allowing them to go on maximising the funding system. The comments below the third quote below express cynicism.

National peak body for age service providers Leading Age Services Australia (LASA), has launched a national campaign to make funding for accessible, affordable, good quality, aged care services a central issue of the 2016 Federal Election.

Source: LASA campaigns to reverse aged care cuts DPS News 13 June 2016

Professor Kelly said the cuts needed to be stopped and the government needed to realign its values.

Source: Old, frail and invisible, anti-aged care funding cuts campaign ramps up The Senior 11 June 2016

The funding cuts are appalling, but it’s a bit rich for LASA to pretend they’re concerned about care standards only a few months after they actively campaigned for the removal of RNs

Source: Campaign against aged care funding cuts intensifies Australian Ageing Agenda 10 June 2016

Watch the local newspapers.  If nothing appears its likely a deal has been done!  They will remember what the mining companies did to the Rudd government when it tried to place a tax on them!

An excellent article in The Age addresses some of the issues in this section as well as related matters in aged care

 Under the earlier slider "Examples in Australia" on this web page I gave several examples where the system was being gamed including "maximising claims" for services, gaming the "Dementia Supplement", excessive "administration and case management fees" in home care, and the charging of "excessive administration fees" in Consumer Directed Care.

FOI for information too time consuming: The AFR did an FOI request to investigate the extent of the rorting of the system. The FOI request was refused as it revealed that “there are more than 26,000 pages detailing non-compliance in relation to claims for government funding from aged care operators”. The request was refused on the basis that finding such a "significant volume" of related information would be too time consuming”. This rorting was going to cause the budget to blow out by a further $3.8 billion over the next 4 years. Profits for the three market listed companies have dropped and when their attempts to keep up their profits by charging residents more were blocked by government their share prices have plummeted.  It seems obvious that the system was being extensively manipulated.

Alzheimer’s Australia has had the courage to propose capping the administration fees for Consumer Directed Care. Not unexpectedly this was strongly opposed by the industry bodies LASA and ACSA. COTA, the seniors organisation that works with these groups on NACA, also opposed the idea. They all see free markets as the way for aged care. It has also provided all of these opportunities for maximising profitability.

Consumer peak body Alzheimer’s Australia is proposing the Federal Government introduce a cap on the administration fees providers can charge as part of the delivery of home care packages and for all admin charges to be published on My Aged Care.

The recommendation was in response to ongoing concerns about excessive charges and a lack of transparency around how costs have been calculated. The peak body said it had received reports of fees equivalent to up to 70 per cent of a consumer’s package.

However providers have said they would be “strongly opposed” to the idea of a cap, which goes against a market-based community aged care system - - - - goes against free market principles.

Source: Controversial call to regulate admin fees in home care packages Australian Ageing Agenda 16 June 2016

The Community Aged Care Hub

I suspect that a system where funding is much looser and was allocated locally in a more personal way, would become far more humane and more flexible going to where it was needed. Funds and support could follow the needs of the individual instead of the providers of care.  The pressures that cause them to follow the money would be relieved.  Someone would be looking to see what sort of care was actually being paid for and if need be assessors could be employees of the hub and do this as part of their duties.

Because this would be closer to the bedside, those who exploit weaknesses in the system for profit would be recognised and ostracised or reported, particularly if the community was involved and saw what was happening to their money.

I think this might work better and we should try something like this.  What we have now is not working.  Instead of doing it "all at the same time" we might do it in steps and develop it as we go along.  We need to test things out and monitor what we do.

If the community was more directly involved with government locally a far more flexible and responsive means of paying would be possible, one that focused on the individuality of need. Attempts to game the system would be more readily apparent.

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Slider 6: Regulation often does not work and can be harmful

Once again, overseas experience shows the risks of a highly regulated system and the way it inhibits the expression of our humanity.

The Centre for Welfare Reform are particularly concerned at the adverse impact of an overly regulated system like they have in the UK. They believe that many community organisations that are doing very good work but that do not meet the particular regulatory or attitudinal requirements of the bureaucracy are seriously harmed when they are required to conform to bureaucratic processes. One of their papers addresses these issues and gives examples.

The current social care system is based on a false model of what helps people have good lives. It treats care as a commodity which can be purchased and regulates it in ways which will often make things worse.

More broadly it is important that we all wake up to the dangers of treating care as if it were just another industrialised product.

Source: Regulation: The unintentional destruction of intentional communities The Centre for Welfare Reform March 2014

Another article focuses on learning disabilities but addresses the same issues there.

Regulation, despite its many and repeated failings, is seen as the primary method for ensuring the safety of people. This has led to an increasingly bureaucratic and destructive mentality that corrodes human relationships.

The increasing marketisation of social care has merely eroded the quality of support, and reduced salaries, skills and securities.

Source: Who Cares? The impact of ideology, regulation and marketisation on the quality of life of people with an intellectual disability  The Centre for Welfare reform March 2015

Members of the centre are so concerned by the excess of regulation in social services that in an open letter to politicians they expressed “their deep concern at the direction of social policy in England and the use of bureaucratic processes which, in the name of safety, can leave people more isolated and more vulnerable”.

In referring to the recurrent scandals:

- - - the system reacts with an increased focus on regulation, bureaucratisation and inspection. Yet there is no evidence that regulation helps improve the real quality of people’s lives or keeps people safer.

- - - the authors found that communities that had been built on principles of love and community are now forced to fit within damaging regulatory regimes.

Source: Open Letter on Regulation. The Centre for Welfare Reform, October 2014

Simon Duffy, the founder and director of the centre was the keynote speaker at the Psychiatric Disability Services of Victoria (VICSERV) Towards Recovery 2016. He gave an interview to Croakey which is on YouTube. In that, he stressed the importance of community organisations and challenged the community to challenge government and make changes themselves because government’s don’t. The good things that happen are led by citizens. He gives an example at almost no cost.

In a tactful comment on what was happening in Australia he said:

“You’ve created a whole new bureaucracy to do it, one big experiment all at the same time using some very elaborate technology,” he said.

“I hope it works because it’s the most exciting thing happening internationally, but I’ve never seen anything quite like this so I’m worried and when I come to Australia I see a lot of worried faces”. The risk, he said was it could become an “expensive mess”.

Source: For better mental health, advocate for fairer, more inclusive societies Croakey 19 May 2016

In a YouTube video lecture given in Gloucester in January 2014, Simon talks about the recognition of citzenship and the importance of community.

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Slider 7: Small steps in the right direction:

As in the USA, there are people trying to do the best they can but it is still very tentative and does not have the capacity to deal with recalcitrant organisations.  We can see some of the same things happening in Australia.

A step forward in aged care

Uniting Agewell is the aged care service provided by Uniting Church in Victoria and Tasmania. It is voluntarily adopting the federal Standards 2: Partnering with consumers requirements and inviting members of the community to be directly involved in decision making.

They are being supported by EM&U, a local participatory democracy group:

The Empowering Monash & YOU (EM&U) blog stands for community involvement in local government. It is the initiative of a group of active people most of whom first met through the Save Monash Gardens campaign.

Source: About Empowering Monash & YOU

AgeWell have the usual glossy advertisements and brochures.  But their model of operation starts with the community and that is something new and unusual.

The model has six components which focus on wellbeing and the promotion of independence.

  • AgeWell Connect: Connecting people to the whole of their community
  • AgeWell Being: Supporting wellbeing of body, mind and soul
  • AgeWell Assist: Assisting people with services to live at home
  • AgeWell Restore: Restoring wellbeing through therapy services
  • AgeWell Care: Providing respite and residential care
  • AgeWell Palliate: Providing support and spiritual guidance at the end of life

Source: What is Agewell? Uniting Agewell web site

The local participatory group EM&U comments positively on what they are doing.

Uniting AgeWell have decided to implement a Community Advisory Committee (ACAC) where community members have an opportunity to participate and play a role in improving as well as planning for future services. They provide home care, independent and assisted living, respite, residential care and community therapy programs.

I cannot stress how important it is for aged care facilities or providers to implement these types of committees as it will ensure transparency and accountability, as well as community members advocating for people who use these services.

Source: An aged care service opening their doors to community participation  EM&U web site

Reservations: I am not challenging Uniting Agewell's commitment to getting feedback, but their advisory committee is unlikely to engage its critics. While this initiative is a welcome development its Committee Member Handbook reveals that members will be appointed by the UnitingWell board based on nominations from a related committee. It will have two board members and one will be chair. Those who have different ideas and are critical are often not seen as credible and will be much less likely to have a voice.

Limitation: If this process was copied by for-profit groups it is likely to become tokenistic and simply rubber stamp what the provider wants. This is not the model that the proposed Community Aged Care Hub would adopt. These appointed committee members will not have the power to be effective customers when this is required. They would probably not be in a strong enough position to protect the elderly residents or the financial integrity of the system.

A step forward in health care

A supplement to the Medical Journal Of Australia on 18 April 2016 was headed Value co-creation: a methodology to drive primary health care reform. It is so full of academic jargon and seems to be so complex in its structure that it is quite difficult to come to grips with, but it is based on the same underlying idea of participation and empowerment that underpins the proposed community aged care hub.

They have successfully brought all the "stakeholders" including the consumers/community to share ideas and plan changes to the system. They have done so at the level of GP practices as well as with representative central bodies which is of course similar to what I have suggested for the hub. They claim that it is working. 

I hate the word stakeholders as it deliberately makes the self-interest of participants the driving force in decision making and leaves the public good on the outer margins.  Groups attend the meetings in order to protect their patch and that makes it difficult to focus on the public good.  As soon as I see this I become distrustful and fear the worst, but it is clear that the intent here is in the right direction.

It is the willingness to listen and respond that is important here. There is a willingness in many parts of the medical profession to listen to what the patients and the community want. This too is a step in the right direction, but it is hampered by a lack of knowledge in the community.

In this case the power imbalance and the vulnerability of patients and community is addressed by acknowledging the imbalance and listening to what they have to say. The community only have the power and the influence that the profession grants them and they cannot enforce their points of view if the profession should put their own interests ahead of that of society.  The outcome still depends on the willingness of the powerful to relinquish their power.

This would not work in a competitive aged care marketplace where arrogant providers can pick and choose what they are prepared to listen to, particularly if it impacts their profitability. It is important that the power imbalance is addressed so that neither party can move forward without the other. Ultimately the community must have the power to decide.

The proposed community aged care hub is intended to include people with experience and to develop the knowledge and expertise needed to participate effectively and act as an effective customer when needed.

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