2.1
The committee received evidence of broad support for the bill’s aim to increase financial transparency in residential aged care, with many submitters and witnesses emphasising the importance of knowing that Commonwealth funding for residential aged care is being spent directly on quality care and service provision and not diverted for other purposes.
2.2
However, concerns have been raised about the measures proposed, their suitability for achieving the bill’s aims, and their application in relation to existing and proposed financial reporting frameworks for aged care. These concerns are discussed below.
Amendments to the Aged Care Act 1997
2.3
As outlined in Chapter 1, the bill proposes amendments to the Aged Care Act 1997 to require providers of residential aged care in receipt of Commonwealth funding to make annual public financial transparency reports about their expenditure on areas such as accommodation, staff salaries and wages, operating costs, and payments to related bodies corporate.
Clarification of categories
2.4
The committee received evidence about these amendments, largely relating to the scope and definitions of the proposed reporting categories included in Item 1. Witnesses and submitters recommended that the categories be amended, or otherwise clarified, to ensure that the data collected and reported provides the scope of information necessary to achieve the bill's aim.
Information to be reported
2.5
Several submitters told the committee that the categories in the proposed list at subsection 9-2A(2) would require further definition to clarify what costs should be included and ensure consistency in reporting. For example, it is unclear what is intended to be captured by ‘direct and indirect care’ under 9‑2A(2)(e) or by 'medical products' at 9‑2A(2)(e)(ii), as both are undefined in the bill and Explanatory Memorandum.
2.6
The Explanatory Memorandum notes that the bill is intended to capture expenditure on medication, although there is no specific category for medication in the list. Aged and Community Services Australia told the committee that it was unclear about ‘the value of a provider publicly reporting on the amount spent on medicines’, as prescribing of medicines is a matter between an individual resident and their health practitioner, and the costs of medicines are incurred by the resident and not the aged care facility.
2.7
Queensland Health also raised concerns about the definition and scope of the categories listed, submitting that:
In order to deliver the required information consistently, it is essential that a standard template with detailed instructions and clearly articulated definitions of key terms is supplied to approved providers.
2.8
The Department of Health currently publishes such a template for the Aged Care Financial Report (ACFR) that providers are required to make each year, to provide this kind of guidance and consistency. One submitter, a family member of an aged care recipient, proposed that the ACFR template could be used to assist in developing definitions for the financial transparency report.
Staffing categories
2.9
Other submitters raised concerns that the aged care staffing categories at subsection 9-2A(3) of the bill, which are the categories by which staff wage and salary expenditure is to be reported under subsection 9-2A(2)(g), do not capture all of the types of workers who support delivery of aged care in residential settings.
2.10
For example, the bill uses the term ‘personal care assistants’ but does not include assistants in nursing or nursing support workers, which are other recognised roles delegated and supervised by a registered nurse to deliver care in certain states and territories.
2.11
The Queensland Nurses and Midwives' Union proposed that subsection 9‑2A(3)(c) be amended to read ‘personal care attendants, or however titled which includes assistants in nursing (AINs)’ as a way to encompass all aged care workers who perform that function.
2.12
The bill notes that the category 'other staff members' at subsection 9-2A(3)(h) should be 'further broken down into appropriate categories', but does not provide any further guidance about this breakdown in the text of the bill or in the Explanatory Memorandum. The Health Services Union recommended that further detail be provided on the kinds of workers intended to be included in this category and whether it covers staff such as food services workers, cleaners, laundry attendants, therapy assistants and lifestyle coordinators.
2.13
Similarly, the Australian Association of Social Workers proposed that the category ‘allied health staff’ be broken down into specific professions to ‘better understand the nature of allied health services being provided to residents of aged care’.
Proposals for additional reporting categories
2.14
The committee received evidence that the proposed reporting categories in subsections 9-2A(2) and (3) of the bill do not capture the full scope of information which many submitters and witnesses deemed necessary to achieve transparency about expenditure and the delivery of quality care in aged care facilities.
2.15
Several additional categories which could be captured by the proposed financial transparency report were recommended, such as:
expenditure on medical devices, specialised bedding products and wound care, which may or may not be already captured under ‘medical products’;
expenditure on lifestyle, such as social and sport activities and outings, and mental health services;
additional corporate financial information, such as the amount of tax paid and the amount of any political donations made by a provider; and
various types of non-financial data, such as information about:
external consultants and other contracted agencies, including types of consultancies entered into and their relationship with the provider organisation;
service specialisations, such as culturally and linguistically diverse services or dementia care, and the impact of those specialisations on operational costs and requirements;
how providers accommodate professional development and training for their staff, and staff member's professional qualifications; and
cultural diversity of residents, including language preference and country of birth.
2.16
The Australian Medical Association also recommended that the financial transparency report could be simplified to an overall breakdown of funding and expenditure on a per-resident basis, as:
A breakdown of funding “per resident”, across a matrix of services would provide a potential consumer with information to compare between providers and make an informed decision before they enter a [residential aged care facility]...
Amendments to the Corporations Act 2001
2.17
As outlined in Chapter 1, the bill also amends the Corporations Act 2001 to require all residential aged care providers in receipt of more than $10 million in Commonwealth funding to produce annual financial reports which comply with the Tier 1 requirements of the Australian Accounting Standards.
2.18
The Health Services Union noted the importance of such a measure to ‘build a fully transparent picture of expenditure across the sector’ and recommended that it should apply to all aged care providers, regardless of their level of Commonwealth funding, at least in the first year of reporting after commencement of the bill:
… having everyone report at least once would really help to build that picture which we talked about before—to build that data. We will also understand where the wastage is going elsewhere; where things are slipping through the cracks elsewhere that may need to be diverted to those smaller providers; and, on the flipside, where people are who perhaps have less funding, or fewer resources available in a thin [market], who are able to provide really good care. How are they doing that and how are they allocating those resources effectively?
2.19
The Queensland Nurses and Midwives' Union likewise recommended that the provisions of the bill be amended by omitting the ‘$10 million’ threshold, to require all approved aged care providers that receive Commonwealth funding to comply with Tier 1 reporting requirements.
2.20
The Department of Health told the committee that the Royal Commission into Aged Care Quality and Safety (Royal Commission) did not make any specific recommendations relating to Tier 1 or Tier 2 requirements for aged care providers, but that the proposed changes to financial reporting under the aged care reform plan will include a number of Tier 1 reporting requirements tailored to the aged care sector.
Financial transparency and quality of care
2.21
Some submitters and witnesses questioned whether the financial transparency reports proposed in the bill would provide an appropriate measure of, or support improvements in, the quality of care provided in residential aged care facilities receiving Commonwealth funding.
2.22
Queensland Health submitted that the reporting measures in the bill, while ‘useful to promote financial transparency and the discharge of public funds’, represented ‘input indicators’ and that their interest was in the outcomes of the aged care system:
Indicators that measure resident wellbeing and show that people are ageing well are preferable.
2.23
COTA Australia similarly told the committee that ‘dollars mean nothing if they don’t improve outcomes’ and that other measures need to be considered to gain transparency about the quality of care provided:
… things like consumer experience and feedback, quality-of-life measures, quality outcomes and whether or not staff have particular levels of qualification. What are the actual metrics, the outcomes, that we're trying to achieve by looking at this financial transparency?
2.24
The Older Person's Advocacy Network shared this view, explaining:
… high costs of care do not necessarily translate to high-quality outcomes or high levels of resident satisfaction, and we maintain that there needs to be a marrying of financial transparency alongside other information sources, such as quality outcomes and experience reports. Things like the Serious Incident Response Scheme and the incidents reported under there, particularly around sexual assault, need to be incorporated in broader measures around transparency.
Staff numbers and care minutes reporting
2.25
Under the proposed financial transparency report, residential aged care providers would be required to report on the total cost of staff members' salaries and wages, broken down by staff categories, and their training. Submitters and witnesses expressed support for publishing this information as a measure of care quality, with the Federation of Ethnic Communities' Councils of Australia submitting that:
… financial reports with clear staffing categories [are] an important tool in understanding providers’ level of capability to deliver care.
2.26
However the bill in its current form does not require a provider to directly report on either the number of staff employed by a facility or the hours of care which a resident receives from those staff.
2.27
Submitters noted their support for transparent reporting of staff numbers and total staffing care minutes, stressing the importance of ensuring that there are adequate staff members with the correct skill mix to deliver quality care in residential aged care facilities, with some pointing to the recent Health Transparency Act 2019 (Qld) as an example of establishing transparency for this kind of information not addressed by the bill.
Introduction of mandatory staffing minutes reporting
2.28
At the public hearing, witnesses expressed their support for the recent announcement from the Commonwealth Government that aged care staffing minutes reporting will become a mandatory part of the ACFR from October this year and move to quarterly reporting from July 2022.
2.29
The Department of Health confirmed that the staffing minutes information in those reports will be broken down by care type – registered nurses, enrolled and licensed nurses, personal care staff, allied health, care management, divisional therapy, lifestyle, recreation and other – not just reported on an aggregate level, and that this information will form part of the star rating system for My Aged Care from the end of 2022.
Interaction with new and existing reporting requirements
2.30
The aged care reform plan, announced by the Australian Government on 11 May 2021 in response to the Royal Commission's recommendations, will include significant changes to financial and care reporting requirements for residential aged care providers. These new reporting requirements, as well as existing reporting requirements for the annual ACFR, largely overlap with the provisions in the current bill.
2.31
For example, as of the 2020–21 financial year, the ACFR already requires reporting against all categories in the proposed financial transparency report, except for the total number of residents (stored elsewhere by the Department of Health) and certain information about non-operational costs (captured in the report, but across different categories than the bill).
2.32
Additionally, the public reporting of financial and quality of care information will largely be addressed through the new monthly care statement to residents and the new star rating system for better comparison between facilities in 2022, and strengthened governance and reporting requirements for providers with the introduction of a new Aged Care Act in 2023.
2.33
The department further explained that the government has accepted the Royal Commission's recommendation to amend current legislation to allow for the public reporting of the sorts of information included in the ACFR and the publication of provider's financial statements, although it is not yet confirmed when this will occur in the reform program:
What we now need to do, as part of the legislative reform program, is work out whether it's more effective and efficient to introduce it at the point of the quarterly reporting amendments or integrate it once into the new legislation.
Risks of duplication
2.34
There were some concerns raised that the bill's provisions risked duplication with both new and existing reporting requirements, and that this could increase the administrative burden for aged care providers.
2.35
Aged and Community Services Australia cautioned that introducing any new requirements for financial reporting ahead of the Government's response to the Royal Commission would be premature and risked duplication of reporting for providers.
2.36
COTA Australia likewise noted the importance of avoiding duplication should the current bill be passed ahead of the reform program:
I'd like to see the Senate, in its debate, discuss removing these requirements as other legislation comes on. So, if the bill is introduced by the government to do X, and that's also here, a supplementary amendment should be included to remove it from here, so you start dwindling down this report to the items that are not covered off elsewhere—I think that's an appropriate way forward to ensure that you are not overburdening the sector with double regulation.
2.37
Other submitters expressed a view that the added administrative burden for providers would be limited, given that this data is largely collected for the ACFR and other reports already, and that the resultant financial transparency would be in the public interest.
The bill as an interim measure
2.38
Several submissions received at the start of the inquiry described the bill as a significant ‘first step’ towards improving financial transparency in the sector and, following the announcement of the aged care reform plan, witnesses proposed that the Senate instead consider the bill as an interim measure until the new financial reporting arrangements are established by the Australian Government over the coming years.
2.39
The Health Services Union and the Australian Nursing and Midwifery Federation both raised concerns that the announced $10 per resident supplement to the basic daily fee, intended to be used on daily living services such as food and nutrition, appeared as though it would be given to providers with 'no strings attached' and that using the current bill as an interim approach would ensure providers report how this money is spent.
2.40
The Department of Health reassured the committee that providers will not be able to receive this supplement without an undertaking to report the adequacy of their daily living services expenditure in their annual ACFR. It also confirmed that providers will be closely monitored to ensure that their supplements are being appropriately spent:
We'll be wanting to understand, and providers to demonstrate, exactly how they've spent that money to provide adequate nutrition and services to residents.
2.41
Not all witnesses supported the use of the bill as an interim approach. Aged and Community Services Australia reiterated at the hearing that aged care providers are already required to report on how funds are expended through the ACFR and that financial transparency information could be extracted from that without a requirement for additional and separate reports:
We therefore ask the committee, government and parliament to consider provider reporting requirements in total and establish a singular framework for reporting that is fair and reasonable, is at regular intervals and uses a portal or mechanism that is easy to navigate and requires providers to report information once only so that they can put their efforts and resources where it really counts in providing care to elderly Australians, not filling out multiple forms for bureaucracy.
Committee view
2.42
The committee recognises that there is strong support across the community for measures which increase financial transparency in aged care, particularly in the residential aged care sector, to ensure that funding is spent on providing quality care and not diverted for other purposes.
2.43
However, the committee has concerns that introducing the provisions in this bill, particularly in light of the significant coming reforms to the aged care sector, would result in duplication and create an unnecessary burden on aged care providers who would be required to make these financial reports in addition to their existing reporting obligations.
2.44
The committee is satisfied that the changes proposed in the Australian Government's aged care reform plan will provide the transparency and quality of care reporting sought by aged care recipients, their families, advocates and the community more broadly, without requiring the current bill.
2.45
The committee recommends that the bill not be passed.
2.46
However, the committee recognises that the categories of information captured by the financial transparency reports proposed in this bill, as well as the many further financial and quality reporting measures proposed by submitters, reflect the types of information that people wish to see in public reporting about aged care going forward.
2.47
The committee understands that work is currently underway for the new aged care financial reporting arrangements in response to the Royal Commission into Aged Care Quality and Safety and is of the view that this presents an opportunity to ensure that any new reports, such as the quarterly care aged care reports and monthly care statements, are designed to meet the expectations of the Australian community.
2.48
The committee therefore sees value in the Department of Health considering the reporting requirements proposed in the current bill and by submitters and witnesses in its designs for the new aged care financial reporting arrangements and any future improvements to the annual Aged Care Financial Report.
Senator Wendy Askew
Chair