More aged care reform needed

The populism dominating federal politics is in part a product of voter scepticism about economic reform.

The challenge for advocates of market-based policies is to convince the community about the benefits of greater choice and competition in the last bastions of the ‘old economy’ – the largely unreconstructed health, education, and social services sectors.

As my new report shows, the ‘Consumer-Directed Care’ aged care reforms can help sell the message of economic reform by giving consumers access to more and better home care and support services in local communities.

But to ensure the success of the CDC reforms, the federal government must continue to reform the sector to unleash the ‘new economy’ in aged care.
The CDC reforms have given consumers the freedom to choose the type and mix of home-based support services they want from the provider they prefer.
This has replaced the inflexible and inefficient ‘one-size fits all’ kind of home care offered by traditional home providers with large administrative fees that waste between a third to a half of all funding.

The technologically-innovative, consumer-focused Peer to Peer (P2P) online platforms now available can directly connect consumers with care workers, and can potentially double the amount of personalised care and support consumers receive out of the same care funding ‘package’ by eliminating traditional providers ‘head office’ overheads.

1. To ensure excessive regulation doesn’t restrict the growth of ‘Uber-style’ home care services and limit the potential benefits of consumer-directed care, the federal government should nurture the success of the aged care reforms by:
2. Establishing a minimum standards framework for home care services that will not restrict customer choice.
3. Reviewing the Aged Care Act to prevent traditional providers from the duty of care provisions to deny consumers the right to switch to alternative providers.
4. Revisiting mandatory qualifications requirements to make it easier for care workers without industry-experience to seek employment in the sector.
5. Examining employment laws to clarify the status of care workers as independent contractors hired directly by consumers.

Dr Jeremy Sammut is a Senior Research Fellow and Director of the Healthcare Innovations Program at the Centre for Independent Studies. His report, Real Choice for Ageing Australians: Achieving the Benefits of the Consumer-Directed Aged Reforms in the New Economy was released on 9 April 2017.