Cuts and Complexity - Support at Home 2025
4 minute read
On Friday we released the Invox overview of the changes just announced for Home Care providers with the caution that ‘before anyone pops the champagne corks, we also need to process what’s in over 500 pages of legislation and a bunch of new policy announcements that got smuggled in with the Act’.
While many commentators were applauding the reform package, at Invox we were concerned about the fine print. Now we have had a deeper dive into the documents we know the devil is indeed in the detail of these proposed reforms. And it’s the detail around Care Management and program implementation that’s now stuck in our craw.
We reckon you can sum up the reform’s proposals for Support at Home as both underfunded and really complex to implement.
Care Management Cuts?
Is this just a click-baity headline? No, it appears to us that very significant funding cuts to Care Management payments are in the pipeline. Proposed Care Management fees are to be charged at 10% of an individual’s budget, that’s a long way down from the current 20% maximum.
In its simplest form, this is a 5.9% reduction from the average percentage of a package currently allocated to Care Management. However, our figuring is the real impact on providers will be a whopping 38.5% decrease in Care Management cost recovery.
Let’s take a closer look at the numbers.
We compared the current HCP level 3 with the financially equivalent new SaH Class 5, using the Government’s ‘National summary of Home Care Package prices – 30 June 2024’ as the benchmark. We found that providers will receive $2,500 less per client, per year for Care Management. This analysis is based on the current average cost of Care Management at $248 per fortnight against the new 10% of a package value equal to $152 per fortnight. That’s a massive $750,000 per annum negative impact on a provider with 300 packages.
What does is this mean for individual clients, surely they will be no ‘worse off’?
Last week’s reform documents came with case studies to show how consumers will fare with the new fee arrangements. We have done a little extra analysis below to identify how Care Management funding charged at 10% will impact on the case study ‘Sylvia’. We do not agree with the ‘no worse off’ conclusions reached.
Administrative Nightmare
The implementation of Support at Home will now become the major player in home care organisational concerns and challenges. New standards, new provider obligations, new penalties all by 1 July. But for this article, we will just look at the admin nightmare on its way.
Governments have a habit of telling us things are going to be more simple when they really mean ‘very much more complex’. In the new SaH world there will be 10 new package classifications with 8 levels of ongoing packages plus 2 shorter term variations. Clients will pay for some services, while other services will be free. Contributions will only be paid for services that have been delivered.
It will be almost impossible for staff to keep track of which clients are eligible for what and what has been delivered. Not-so simple so far, but wait, there’s more.
Contribution rates will vary by the type of service received and the participant’s income and assets. Rates will be set as a percentage of the price of each service and the government will pay the remainder as a subsidy. The rate will be based on the type of service received:
no contribution for Clinical services
‘moderate’ contributions for Independence services
‘highest’ contributions for Everyday Living services
Think of trying to explain the subtleties of the new approach to clients (and frontline staff) and think of some of the complaints coming your way. Think of very unhappy office staff.
But that’s not the only scary part, the ‘grandfathering’ of existing HCP clients has also got us sleepless at the moment.
The government’s ‘no worse off principle’ will apply to the contribution arrangements for around 280,000 current HCP clients, plus anyone in the queue. These folks will continue with the same contributions they currently make while all new clients will be on the new and significantly different SaH means-tested fee system.
The government’s commitment to grandfather everyone on existing packages means that some people on current packages at age 65 could be on that package fee level for another 35+ years. This means organisations will need to account for the 10 new types of packages plus the 4 old fee levels making 14 differing sets of complex fee arrangements to be implemented across 2 different fee systems for over 35 years!
The layers of complexity in the new system are boggling our minds and we know the existing simpler system is already a major challenge for many organisations. It’s complex for us to explain, imagine trying to get staff and systems to implement it all by 1 July in a way that does not result in a bunch of Audit non-compliance notices.
If anybody tells you there is a simple software solution to all of this they are either a software salesperson or they have never tried to implement change in aged care practice.
Please Explain
We would love to hear we’ve got this analysis wrong. Please tell us we got our numbers wrong and that a fee cap of 10% is really not a significant cut and explain to us that the administrative burden of the new fee arrangements will be acknowledged and funded. Yep, we’d genuinely love to hear just that.
And, don’t get us started on why the top level of package funding set at $78,000 per year is too low to meet community expectations. It will be support at home, but only until your needs get too complex. Don’t get us started, because this article is already in danger of being too long and it’s such an important issue we will be covering it in depth in an upcoming Invox article.
If you missed our quick read overview of the reform changes ahead, you can find it here.
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