Insights in Aged-Care Policy From "Down Under," Part 1

Nursing Homes, June, 2001 by Robert Greenwood

A long-term care public information specialist sizes up Australia's system

During my two weeks in Australia, I encountered a country making fundamental changes to its long-term care policies. Like the United States, Australia is facing its own 21st-century demographic challenge. The percentage of Australians over age 65 is expected to rise from 12% of the population to around 25% by the middle of the century. That mirrors the rise in the United States from 13% to an estimated 20% of the population by 2050. Australia's responses are in some ways similar to America's--and in others undeniably different.

Just as in the United States, the Australian government attempts to limit the amount it spends on aged care, both by setting the rate it pays providers and by controlling the number of residents or home care clients that providers can serve at government expense. Many American states use certificates of need to regulate the number of nursing homes that operate within the state. In Australia, providers receive government licenses for beds in "residential care facilities," which include nursing homes arm what are known as hostels. Hostels provide basic personal care services, similar to assisted living facilities in the United States (except without the chandelier in the lobby). In addition, the Australian government grants licenses for providing home care through what are called "community service packages."

Bed Shortage

Unlike the United States, Australia has not experienced a large growth in construction of private-pay assisted living facilities. As a result, there is a shortage of both nursing home and hostel beds as people live longer and their

care needs increase. The government is actually encouraging providers to build by issuing new licenses, based on regional census data, for residential care beds. The government's goal is to have in place 100 licenses for every 1,000 persons over the age of 70 in each region. The providers I spoke with seemed eager to get new licenses, leading me to believe that government reimbursement is more equitable than in the United States.

Part of Australia's efforts to prepare for its own senior boom is an emphasis on allowing people to age in place. A key to this are Australian policies aimed at narrowing the distinction between nursing homes, which developed as part of the country's medical system, and hostels, which developed out of government housing programs.

For example, Australia's new reimbursement system allows hostels to be paid for nursing home care if they choose to provide it. Many of the hostels I visited had been remodeled as part of a building certification program that began in 2000. They had been redesigned to facilitate residents' aging in place as they transition from what is called low to high residential care. In many of the residential care facilities I visited, the only obvious difference between the rooms of nursing home and hostel residents was the type of bed they slept in. Residents needing hostel-level care had regular beds, while those needing nursing care had adjustable hospital beds.

Community Services

In addition to encouraging the building of new residential care facilities, the government is also issuing new licenses to expand the services offered to the elderly in the community. David Saddler, executive director of Aged Care New South Wales, an association of "church and charity" providers, and a former official with the government's Home and Community Care (HACC) program, said, "When the government began paying for community services, something unexpected happened. Providers would specialize in one service or another. One might provide lawn maintenance, while another provided housekeeping services." He said this made it very difficult or people to track down all the services they might need or to update them as their needs changed.

"The government's solution has been to develop community care packages," Saddler said. "With the packages, providers receive a uniform payment based on the level of care needed. They are responsible for either providing or arranging for all the care and services a client might need. This adds in the element of case management that was sorely missing in the previous system."

Providers are allowed to charge a modest fee for most community services, but they cannot refuse to provide services to someone who cannot afford to pay. Although this struck me as an interesting use of case management and capitated payments--concepts at the core of managed care--I realized that instead of the focus being on reducing costs, it really seemed to be on coordinating care.

The government is just getting ready to report on the results of a two-year trial of so-called extended-care community packages, which are designed to deliver nursing home care to people in their homes. The closest parallel in the United States is probably the PACE (Program of All-inclusive Care for the Elderly) Medicaid waiver program that allows for the delivery of skilled nursing care in community settings.