Transforming Australia’s Aged Care – CEDA Keynote Speech – 21 October 2016

KEN WYATT
ASSISTANT MINISTER FOR HEALTH AND AGED CARE
CEDA KEYNOTE ADDRESS
SYDNEY, OCTOBER 2016

Firstly, I would like to acknowledge the traditional owners of the land, the Gadigal of the Eora Nation, where we are meeting, and pay my respects to Elders, past, present and future.

I feel very privileged to be here today –

privileged to be addressing a forum as prestigious as CEDA –
and privileged to be doing it as the Assistant Minister for Health and Aged Care – a portfolio that means a lot to me personally – and a lot to Australians, because we all have a stake in health, and we all have a stake in aged care.
As a child, growing up in country WA, I had great admiration for my Grand-fathers, who in my eyes were old. They were so resourceful and so wise.

If they taught me one thing it was that nothing is unsolvable. If a fence was broken – they could fix it. If a water tank tap was broken – they could fix it. If they couldn’t find the right size washer – they’d make it. When they told me stories – they shared their wisdom, they shared their past. And, because of this I’ve always viewed older Australian’s with respect.

Every ageing Australian has their own story to tell. These stories, experiences and hard work are the blocks that helped build our nation.

Yet in ageing we don’t seem to give them the same level of attention that they gave us as doting grandparents. We use the excuse that we are time poor. They gave us their love unconditionally but, we seem to give them conditional love based on our availability – and sadly some just abandon them.

I think Ministers communicate too rarely the satisfaction that we get out of our jobs.  I am genuinely humbled by the opportunity to contribute to such an important portfolio area.  I also hope that I bring a number of skills to this portfolio that will help me do this job well.

You may not know that I’ve done other things aside from being a Parliamentarian.

As a young man I laboured for brickies, carpenters, plumbers and roof tilers. I’ve been a roustabout on shearing teams, a general hand, a railway fettler and a grape picker.

I was also a primary school teacher for 16 years before taking on senior roles with the Education and Health Departments in both WA and NSW.

My life story so far has taught me to respect every citizen, it has taught me that everyone has something to contribute to our community, and, I have a deep gratitude for the opportunities I have been offered.

I believe that we should have the mindset that life is from 0 to 105. That from the moment we are born our hopes and aspirations are for health and a long life – filled with enjoyment, love and family.

We will often dip our toes in the health systems at different times of our life – but we will ultimately need aged care when we become frail, vulnerable and no longer able to care for ourselves without support.

So, I am committed to playing my part to ensure that our country has a world-class health and aged care systems to support our older Australians now and into the future.

This cannot be achieved with the status quo – and that’s why the Australian Government has embarked on ambitious changes to our health and aged care systems.

A range of reforms are set to transform these systems.

Essentially, these reforms are driven by two things – an unrelenting focus on consumers, and the need to manage affordability to ensure the sustainability of these systems into the future.

In aged care, this means new dimensions of choice, control and autonomy for the consumer.

We are wrapping the system around the consumer so that aged care dollars are clearly tied to consumers and their needs – meaning better value for taxpayers.

Consumer directed care means we will have access to the services that we need, when we need it – based on individual choices.

It will require a significant shift from the traditional model, to one of delivering services that individuals want and need.

A key challenge facing Australia’s aged care system is that more of us are growing older.

Maybe not as fast as some other countries – such as Canada, the United Kingdom and Japan.

But, Australia’s population is ageing at an unprecedented rate – with more than one million older people receiving aged care services each year.

By 2050, more than 3.5 million people will be using these services.

We face many challenges in the future –

the challenge of a health and aged care workforce that is also ageing, including large numbers of health professionals retiring over time
the challenge of increased expectations from aged care consumers – in choice, control and autonomy, in part caused by an increase in consumer contributions.
there is also the issue of rising health costs, particularly in dealing with chronic and complex conditions
the challenge of the escalating costs of aged care
the challenge of ever-intensifying pressures on Government spending
And, the challenge of change itself
In terms of how many there are of us older people (and, I guess, at 64, I’m now getting there), and how much we’re costing, the statistics are compelling.

The 2015 Intergenerational Report estimates that in 2054–55, nearly two million Australians will be aged 85 and over. That’s a lot of grand-parents.

Aged care spending by government is expected to increase from 0.9 per cent of GDP in 2014–15 to 1.7 per cent of GDP in 2054–55. That’s around $80 billion in today’s dollars.

We talk a lot about health care costs and their impact on the nation’s bottom line. Well, aged care costs are actually growing at a much faster rate than health care costs.

In 2015–16, the total Government spend on health was just over $86 billion. It will rise to just over $100 billion by 2019–20. That’s an overall growth rate of 4 to 4.6 per cent.

Aged care, however, will grow much faster – at nearly double the rate. Last year’s spending on aged care was just over $16 billion, and this will rise to just over $21 billion in the next five years. That’s an average of more than 7 per cent a year.

This reflects in particular the Government’s increasing allocation of home care packages over time to reflect the strong consumer preference to stay at home where possible. Keeping people at home longer.

And in residential care, even after the MYEFO and Budget measures, funding will also continue to grow, growing in aggregate at 5.1 per cent per annum on average to 2019-20.

We don’t underestimate any of these challenges – but I’d also make the point that we don’t underestimate the opportunities they will provide to older Australians, either – so long as we confront challenges intelligently, methodically, collaboratively and constructively. And, I believe, that’s what’s happening now.

We are improving the way we manage chronic health conditions and we have the opportunity to improve the interplay with how we age. Actively embracing health eating patterns, keeping active, retaining our strength and flexibility and social connections may help us all to remain independent and reduce the demand and cost for aged care in the future.

A generational shift in the provision of aged care is being propelled by a generational shift in people’s attitudes.

You can blame us ‘baby boomers’ – who bring very different expectations of service delivery, of health systems, and of aged care as we get older.

We want more robust and transparent funding. We want improved quality – a return on investment. And, we want more choices around care and how it is paid for.

Most of all, we want independence. We want to stay in our own home living as independently for as long as we can.

To quote social commentator Bernard Salt “Today’s 60-somethings are university educated and come with big expectations of lifestyle. Settling back into ‘pension life’ isn’t as attractive a proposition as is setting up shop as an independent consultant or business owner.”

As a member of this Turnbull Government, I’m proud to say our reforms are beginning to change the system so that it can meet these expectations.

We’ve delivered an integrated entry level program to support people in their own homes in the Commonwealth Home Support Program. We are shaping the services in this program so that they focus on wellness and reablement so that with a little bit of support and sometimes just for short periods of time, people will be able to continue to live independently in their homes.

We’re allowing funding to follow the consumer in Home Care – to be fully implemented from February 2017. This will fundamentally change the dynamic between consumers and providers.

We’ve separated aged care complaints management from the funder and placed it under an independent Aged Care Complaints Commissioner.

These changes are starting to deliver real improvements.

Government’s role is transforming. While it will continue to be a significant funder of the system, the Government is taking on a system steward role to ensure older Australians will continue to have access to a quality aged care system that is sustainable, and which provides services that meet community expectations.

Our last Budget demonstrates our ongoing commitment. With more Australians requiring aged care services each year, the 2016–17 Budget made a record investment in aged care.

Overall residential aged care investment will continue to increase by more than 5 per cent per resident each year over the next five years.

Budget funding of $136.6 million over five years for My Aged Care, the national access gateway, will increase support for older Australians and their families who want to know about their aged care options.
The Budget did not forget people in the bush. Older people living in rural and remote areas will benefit from funding of $102.3 million over five years to improve aged care services

The viability supplement rate paid to remote residential services and some special needs services is being increased. And we’re bringing in a more efficient way to classify providers’ remoteness to determine their funding.

The Budget also continued to protect vulnerable older Australians, investing $10.1 million to continue making unannounced visits to aged care homes – at any time, without notice – to assess an aged care home’s performance through the Aged Care Quality Agency.
In the Budget we also announced action to ensure that funding to residential aged care providers through the Aged Care Funding Instrument (ACFI) remains affordable for the community.

The Budget changes came about following an increase in funding claims by providers that would, if left unchecked, would have increased aged care funding by a total of $3.8 billion to 2019-20.

As a responsible economic manager the Government did have to take action to mitigate the unsustainable increase in claims under the funding instrument.

The measures announced in (the 2015-16 MYEFO) and the 2016-17 Budget reduced the impact of this growth by $2 billion.

The net impact is that the Government has increased its forward estimates by $1.8 billion in the Budget.  That is $1.8 billion additional to what we previously planned to spend on aged care.  That is a significant amount in anyone’s language.

We have started a conversation on reforming the Aged Care Funding Instrument to determine whether there are improvements that we can make to deliver a more sustainable and stable funding system in the long term.

We want to work with the sector to determine if there are improvements – such as separating residents’ needs assessments from provider services, and having it done by an independent party – that will deliver a better system.
Much of our reform in the aged care space has been ground breaking.
But it’s not just the ‘what’ – it’s about ‘how’ we’ve gone about reform has also been ground breaking.

Aged care reform has been a model – for consultation and collaboration in designing – more accurately, co-designing – and developing policy.
The aged care sector has played a key role. As well as the challenges I mentioned at the outset, service providers have their own additional ones.

Providers have to deal with rapidly developing technologies.

They face demands for and demands on a high functioning workforce.

And yet the sector has always been prepared to be genuinely collaborative when taking a seat at the policy table – sharing expertise, sharing learnings, sharing objectives – conscious of its pressures, but also conscious of ours in Government.

Some providers have proven more adept at absorbing and implementing changes to business models, while others are struggling to keep up with the pace of change.

In this context, the Aged Care Roadmap will be pivotal in informing ongoing aged care reform. The Aged Care Sector Committee has developed the Roadmap to provide advice to us about the sector’s shared view of the future vision for aged care and directions for reforms.

It is intended to generate discussion across the aged care sector and Government regarding future reforms.

By setting out the sector’s considered view of short, medium and long term reforms, it provides a platform for Government to work with the sector on difficult and complex reforms.

Further changes to the system will also be informed by the recommendations from the 2016–17 Legislated Review, to be led by David Tune, which will consider the impact of the aged care reforms announced after the Productivity Commissions Report of 2011 Caring for Older Australians.

Irrespective of a longer-term reform agenda, I recognise the sector’s expectation for co-design.

The co-design model has led to increased sector ownership of the reforms and future reform journey. This has been beneficial for the sector, for the Government, and – most importantly – for Australian aged care consumers.

So, where to from here ….

I suggest we start thinking outside the box and challenge our mindset about the capacity of older Australians.

We shouldn’t see our older years as an ending but rather as an opportunity to contribute to our communities in new ways.

Older people have seen a lot, they have lived a lot, and experienced a lot, so why don’t we begin harnessing that knowledge and life experience and reengage with our seniors.

A conversation that often comes up in my visits to my local Men’s Shed is the loss of purpose and drive once people retire and leave the workforce.

So I want to start a conversation about a pre-retirement gap year where older Australians have the opportunity to take a year of unpaid leave to travel, to relax, to learn new skills and then return to work.

Older Australians still have a lot to give, so let’s encourage them to continue pursuing their dreams. (THE INTERN)

By thinking out of the box, collaborating with our stakeholders and continuing with our reform agenda – we get the aged care system we want, and need, in our future.

Thank you.

[ENDS]