The recent introduction by the federal government of star-ratings for residential aged care implements an important recommendation by the Aged Care Royal Commission.
All residential aged care services in Australia now receive an overall star-rating between 1 and 5 stars across four sub-categories: Residents; Experience; Compliance; Staffing; and Quality Measures.
This is exciting stuff. The aged care system is complex and navigation by consumers is terribly difficult. Decisions to move into a residential aged care facility are not made lightly and are hard to undo. So, star-ratings are not intended to be another customer satisfaction score press release, they are intended to help older Australians and their families to compare the quality and safety performance of different residential aged care services and thereby help them to make important decisions about their care.
The first star-ratings were only released in December 2022 with the bulk of the sector receiving 3 stars (54%) and 4 stars (36%). Not bad. Those ratings were assessed during a period of massive upheaval caused by COVID-19, ongoing and relentless reform arising out of the Aged Care Royal Commission, significant challenges around workforce and more than five successive years of significant aggregate operating losses (with a new Stewart Brown analysis revealing residential aged care facilities, lost an average $21.29 a bed a day in the September 2022 quarter compared to $7.30 in the same quarter in 2021). Yes, it would be wonderful if all facilities were at 4 and 5 stars, but we should be proud that we have a sector that has remained so committed to the care and safety of its residents, even in the face of such a hostile operating environment.
We do have some teething problems. Some providers have received very surprising (low) ratings, and the Department of Health has admitted that a number of ratings had been “amended” after “further data validation”.
Arguably, data errors are to be expected in the early days of a roll-out. Of more concern are the reports of a rushed resident interview process. The Resident Experience component (that weighted at a hefty at 33% of the overall score) requires interviews with over 20,000 residents across 2,700 locations. Residents are selected at random to participate. There are allegations that interviews have been rushed, caused distress and arranged/cancelled with providers at short notice. This speaks of a process that needs more care and thought, not only to alleviate resident distress but also to ensure that the community and the sector trust in and respect the outcome. A further concern is that the Resident Experience component of the rating is also unable to be appealed by providers.
Other issues relate to the lag in data. Quality assessments are generally only carried out annually, as are the Resident Experience surveys. A service which has made significant improvement will continue to be penalised by a low star rating until their next assessment or resident interviews.
Finally, there is the perverse way in which the star rating for Staffing works. Effectively, the AN-ACC funding model funds the care minute requirements for each service up to 3 stars. So, if a service wants to achieve 4 stars or more for Staffing then it will need to find the funding to resource this from somewhere else. That might be fine in the private sector where the supplier effectively decides what and how it might charge a consumer. However, in aged care, pricing is heavily regulated and opportunities to maximise revenue on this front are very limited. The extra funding required to fund a 4 or 5-star staffing rating would generally need to be achieved through cost-cutting in other areas of the service or through cross-subsidisation from other businesses operated by the provider. A significant challenge, particularly for the regional, remote and smaller providers and, given the extraordinary workforce challenges along with the costs and operational issues associated with agency staff, my bet is that most providers will choose to sit on 3 stars rather than strive for higher.
However, it is early days. Presently, we have a single point of data - no trend or other comparison points. Much of the data was also collected under a now superseded funding model which influenced certain operational decision-making by providers in a different way to the new funding model (AN-ACC).
Star ratings will be a powerful tool to help navigate a complex system. First though, these teething problems must be ironed out and an accuracy of data input assured. Only then will the scheme have the trust and respect of its two main stakeholders, our older Australians and our providers.
Amber Crosthwaite would like to thank Andreas Geronimos, Solicitor, Aged Care & Disability, for his contribution to this article.
This article first appeared in Amber Crosthwaite's article for Business News Magazine on 27th of January 2023.