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  • Ken Ly

Funding Reforms Made Simple

The new Aged Care funding reforms stipulate designated funding applicable to and determined by the classification of residential care required by the recipient. Health Generation’s resident AN-ACC Funding expert, Ken Ly, presents an overview of Funding Reforms, simplified and bite sized.

What’s important for providers to know?

As a two-tiered system, most components of the reform can be fitted into two broad categories - funding allocation and funding utilisation.

The key goals of the reforms can be boiled down to provide more equitable funding to providers which accurately reflects the cost of providing care services; in terms of location and specialisations, and facilitates the clinical requirements of care recipients.

To ensure effective utilisation of funding to deliver optimal care to residents by mandating minimum direct care minutes, and 24/7 Registered Nurse coverage, improved monitoring and management mechanisms such as the Star Rating system, and Quarterly Financial Report (QFR).

Why do providers need to know?

Ineffective management of changes required under the new reforms can increase operational and clinical risks. Insufficient funding impacts revenue health and places business operations at risk. Ineffective rostering will impact staff costs and efficiencies, placing additional strain on care workers and management, and may result in an inability to meet the minimum care minute target. Unmet minimum care minutes will affect the quality of care delivered to residents, and may impact a facility’s star rating, presenting reputational risk to the facility and diminishing its commercial competitiveness. Non-Compliance with the ACQSC Standards may result in Commission directed sanctions, Notices to Agree, and inclusion on the Commission’s non-compliance register, all of which present a risk to operations and reputation.

What should providers do?

In the short-term, providers need to acquire a sound understanding of the nature and objectives of the funding reform. Understanding the structure and impact of the reforms on daily operations and over-arching governance requirements will better enable providers to meet their compliance obligations and the expectations of the Commission. This understanding will also enable providers to identify current gaps created by the funding reform and take immediate actions to close the gaps.

Tip: Not sure where to start? Start with your funding performance.

In the medium to long-term, a more comprehensive understanding of the reforms will strengthen investment in upgrading provider capacity and capability to manage all components of the reforms. Successful navigation of funding reforms will bolster a provider’s position in corporate governance, clinical delivery, and reputation.


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