Budget 2016: Aged-care cut by $1.2bn to fight blowout
Payments to aged-care providers will be slashed by $1.2 billion over four years to help curb a predicted blowout of $3.8bn in costs in the residential aged-care system.
The move is designed to curb skyrocketing costs for nursing home residents with complex needs.
Under changes revealed in the budget, the formula for deciding funding levels for patients with complex care needs will be changed, and the rate of indexation of payments for these patients will be halved.
“The government will achieve efficiencies of $1.2bn over four years through changes to the scoring matrix of the Aged Care Funding Instrument that determines the level of funding paid to aged-care providers,’’ the budget papers say.
“This aims to bring the ACFI back into the budgeted growth trend to stabilise higher than expected growth. The savings from this measure will be redirected by the government to fund health policy priorities.”
Growth rates in spending for assistance with daily living and behavioural or cognitive issues have not been as rapid, with the complex care needs funding driving the extra cost to government.
Estimates in the papers were raised by $3.8bn from the previous year’s budget and by $2.5bn over the forecasts in the Mid-Year Economic and Fiscal Outlook reflecting the spending blowout.
The funding changes are expected to save $119m in 2016-17, $230m in 2017-18, $340m in 2018-19 and $464m in 2019-20.
The cuts to funding will be offset by $53.3 million in transitional assistance and a $137m funding boost for My Aged Care, the government’s frontline web portal for dealing with aged-care residents and their families. “Rural and remote providers will be supported by an extra $102.3m over five years,’’ the papers say.
Health Minister Sussan Ley says the government “will continue to deliver consumer- centred aged-care services with reforms that will improve access in rural and remote locations, as well as $136.6 million to ensure the My Aged Care website can meet rapidly growing demand”.
The government has also set aside $10m to continue a blitz on compliance audits by the Australian Aged Care Quality Agency throughout 2016-17