Australian residential aged care: Skills mix and funding post 1997 reforms

Abstract

The aged care structural reform that occurred in Australia in 1997 resulted in changes to the funding arrangements for the providers of residential aged care in nursing homes and hostels. The main result of these changes to funding arrangements was that any distinction between nursing homes and hostels, in terms of monies received from the Department of Health and Ageing (as it is now known) to care for similar types of residents, was effectively removed. This was aimed at facilitating 'ageing in place' within residential aged care. These changes, however, did not consider the financial disadvantage to nursing homes that operate under a more expensive wage structure in the provision of such care. In other words, to provide the care to the same type of resident remains more expensive within the structures of the nursing home award than the award structures of hostels. The changes did however set the scene for challenging the industry in the delivery of care to consumers. The increase in options for staffing mix, expertise and residential settings provided competition between hostels and nursing homes and choice to consumers for the first time. This paper examines the transition to a single funding tool as part of aged care reform in 1997 and its implications for the aged care industry in terms of skills mix, award structures and the potential impact on the consumer of the alternatives in the provision of residential care.