August 18, 2023

Independent Hospital and Aged Care Pricing Authority (IHACPA) conference

Independent Hospital and Aged Care Pricing Authority (IHACPA) conference

During July the first ever combined hospital and aged care pricing conference was held in Brisbane. The conference was well attended by abroad cross section of both hospital and aged care providers, policy makers, specialists,and government representatives, which made for a very interesting few days. Energetic debate and discussion were the order of the days, thought provoking opinions, fact finding and policy challenges to informed and empowered both speakers and delegates.

Key messages I took (but don’t necessarily agree with) from the three days included:

  • Concerns regarding the data collected by the IHACPA was not robust enough to satisfactorily evidence the aged care industry financial information and performance. With a sample size of only 128 facilities; as directed by the Department of Health and Ageing (DoH),discussions focussed on the need for a larger sample size inclusive of individualnuances for different facilities in different locations that affect funding.IHACPA acknowledged 128 facilities may not be sufficient in providinginformation on variances to funding, however they are currently utilising the QFR and ACR reports to cross reference and data match information where available. Ongoing acceleration of data and information provided by facilitiesand organisations will support improved recommendations on funding into thefuture.
  • Costs of care is funded appropriately through ANACC. What is not funded well is the cost of indirect care. Data on indirect care is not sufficiently collated for IHACPA to provide recommendations to government. Included in indirect costs is the additional burden for providers to gather data for the ever-increasing mandatory reporting. Providers areresponsible to innovate and find opportunities to reduce indirect costs which was suggested, may include revisions of remunerations paid for salaried roles. Throughthe data available, increasing the funding does not increase the quality of outcomes.
  • Management of complex behaviours are not well represented in the AN ACC tool. Whilst this is currently out of scope for IHACPA, it was suggested possible independent projects in the future to consider the financial burden of documentation and management of complex behaviours.
  • Advice was provided the IHACPA delivers to the government any indexation and data evidencing cost increases to aged care providers for the previous year. It does not forecast increases in costs forthe coming financial year. The Minister for Health makes the decision based on the information provided to consider the increases in AN ACC price points each year.
  • Concerns raised and agreed by most delegates present the AN ACC tool does not consider or allocate for delivery of high-quality care. The very real expectation of the government and the public,is for aged care providers to consistently improve, innovate and excel above expectations. To achieve this level of outcome a significant impact to a provider’s financial performance is measurable.
  • It was suggested the AN ACC as an activity-based funding model (ABF) is not a model that should be applied to aged care. ABF is designed for episodic care where we have predictability in services, time of care and outcomes of health care episodes. Aged care is not episodic and thevariances in how a care recipient declines in health is too unpredictable to be allocated as an ABF. Consideration of alternative funding models was pressedupon the DoH by delegates.
  • Acknowledgement by most speakers and delegateson the care recipients whose assets and financial position enabled them tocontribute to their cost of care was a key action needed to improve aged care viability. Concerns were raised and discussed on how do you make people pay andhow much do you make them pay? Guidance was sought from the DoH with no forthcoming or immediate recommendations. This is likely a commercial and business responsibility that sits with providers not the DoH. It was agreed by most, it is unfair to make our current 40-year-olds increase tax payments forthe rising costs of a baby boomer generation aged care service.
  • Alternative funding models for aged care included an international movement towards outcome focussed funding. This example explored the opportunity to receive funding based on the rehabilitation or reablement of a person that is measured from prior health condition andreliance on the health system compared to the post health condition and lesser reliance on health systems and services. Payment could be allocated to thebigger gap between pre and post. The ‘right care at the right time at the right place’ was suggested as a thought-provoking change to our industry.
  • Acknowledgement was provided to delegates the integration of social and health funding isn’t right in Australia. We have no ability yet to adequately measure of fund the impact each has on the other.

Overall, we can agree funding isn’t perfect, it probably isn’t even great. Further information and data are needed to provide a clearer and appropriate funding mechanism for aged care. Gathering of this data is acost borne by providers and further which eats away at the funding. The responsibility to ‘manage costs better’ is also a provider’s responsibility made very clear by speakers.

If you need help with your funding, strategy, operations,workforce or education and training please reach out. The experts and team at K Peace Consulting do not create costly dependencies, nor do we lock you into lengthy contracts. We also do not take a percentage of profits made through funding gains. Our mission is to help our aged care industry perform to the very best it can with professional support as you need.

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