Aged Care - Does the Tune review follow the right song sheet?


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The Tune Review disappoints is the headline for aged care in 2017. While positive aged care reforms via “living longer, living better” were announced in 2012, the Tune Review is a step backwards as reforms stall.

The government’s short-term focus remains on further ACFI funding cuts and reacting to a flood of media focus alleging a broken system.

Why bother with another review?

Although one of many current reviews of aged care, the Tune Review is the highest profile yet tasked to assess the effectiveness of reforms to date and thus the sustainability of the aged care system. Regrettably the Review’s 30 odd recommendations over its 197 pages are mostly superficial ones. The single serious recommendation to strengthen the financial stability of the whole system – the proposed extension of user pays for those care recipients who can afford it – promptly became the can kicked down the street by the minister.

Future financial viability urgently needs to be addressed

We all understand Australia’s ageing population and the need to invest in new aged care buildings and refurbish the old ones. Investment depends on confidence that a reasonable operator can generate an acceptable return, but the two jumbo elephants in the room barely received lip service from the Review.

Elephant 1

Elephant 2

And Further Funding Cuts Next?

With the release of the AACS ACFI Review in October, further funding cuts are in the spotlight. This review recommends significant changes to ACFI in the lead up to its replacement, which will likely take two years before it can be implemented.

And what is next?

Observers shouldn’t hold their breath. We will see a muted Government response to the Tune Review given its major recommendation has already been canned and the rest are of minor significance. While we only refer to two jumbo elephants, we see many smaller ones too.

For the ASX listed operators, there’s no blue sky for the moment. While share prices have recovered a little in recent weeks there’s little conviction. Aged care is becoming an increasingly complex industry where the solutions appear to be the only band aid solutions.