Funding cuts mean RNs to go, expansion plans on hold: CEO

June 8, 2016

As the sector’s calls to see the modelling behind the government’s budget changes to aged care continue to go unanswered, providers are determining the impacts that a reduction of $1.7 billion over four years will have on their operations.

Maintaining the same number of registered nurses and level of resident care or expanding operations will be impossible if the government’s changes to aged care funding go ahead, the CEO of a NSW provider has told Australian Ageing Agenda.

Chris Rigby

Scalabrini Village CEO Chris Rigby is putting his hopes on industry pressure and a post-election government review to undo the announced changes to the Aged Care Funding Instrument (ACFI) and the impact they will have on care provision.

Last December the government announced it was cutting subsidies on certain claims in the complex health care domain to save $472 million over the forward estimates, and then surprised the sector in the May budget when it announced further changes to the ACFI in the same domain to save an additional $1.2 billion over four years.

Mr Rigby has calculated that if the changes go ahead, his organisation would see an 11.3 per cent reduction in annual funding for the same residents compared to the current arrangements.

“We are able to cope with next year’s impact but by the third year – once the grandfathered residents are no longer with us – it really starts biting badly,” Mr Rigby told AAA.

“The only choice facing us is to have the government agree to a review of the proposed ACFI changes.”

As the changes target complex health care, Mr Rigby said the key staffing impact would be in the employment of registered nursing staff, and fewer registered nurses would mean they could not maintain the current level of care.

“We would have to change our models of care. We would have to change our staffing. As a matter of policy we have registered nursing staff on 24/7. We support those registered nurses with clinical nurse specialists and with a clinical nurse educator.

“Consequently we are able to care safely and well for people with very high complex care needs. In the future, I don’t know what we are going to do. We wouldn’t be able to accept such residents and we wouldn’t be able to afford to employ the registered nursing staff at the levels that we currently employ them,” Mr Rigby said.

“In terms of expansion, we simply would not consider any expansion at all under the ACFI changes.”

Scalabrini Village has six facilities in NSW with its seventh, currently under construction, planned to open in 2017.

Although not welcome, Mr Rigby said Scalabrini could cope with its share of the government’s savings target of $1.7 billion over four years, but that the changes would in effect lead to a greater reduction.

“Our problem is the way the department has recommended to achieve those savings will end up reducing expenditure by a much greater amount than $1.7 billion,” Mr Rigby said.

Shortly after the government announced the latest changes to ACFI in the May budget, peak body Leading Age Services Australia commissioned analysis from Ansell Strategic that found the measures equated to more than $2 billion and negatively impacted viability and resident care. Meanwhile, the Aged Care Guild has commissioned a report from Deloitte to highlight the financial impact on providers and subsequent impacts to residents.

While some in the sector are calling for ACFI reform, Mr Rigby said he had no issue with the funding instrument as the current rules allowed him to receive sufficient funding to provide excellent care.

“The issue is the government’s not the industry’s. As there has been no cost of care undertaken then the ACFI is really a resource allocation tool and the funding being allocated is limited.”

Meanwhile, the Greens’ spokesperson on ageing Senator Rachel Siewert has told AAA that the ACFI changes have highlighted the need for a cost of care study and an independent review of the funding instrument.



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