Impact analysis of alternative arrangements for allocating residential aged care places

The Legislated Review of Aged Care 2017 (Tune Review) recommended changes to how we allocate residential aged care places. We did an impact analysis to understand the implications for stakeholders of potential changes to the place allocation approach. Find out more about this analysis.

Purpose of the impact analysis

The impact analysis is part of our work to improve choice for residential aged care.

As part of the 2018–19 Budget More Choices for a Longer Life package, the Government provided in-principle support to change how we allocate residential aged care places. This would provide greater choice for people who need care (consumers). Places are currently allocated to approved providers through the Aged Care Approvals Round (ACAR). The measure responds to recommendations in the Tune Review.

Scope

The analysis examined 2 alternative allocation models. It considered associated benefits, risks and complexities for stakeholders, along with key implementation issues:

  1. Improve the ACAR and places management arrangements.
  2. Assign the place directly to the consumer, rather than to providers.

Independent project leads

The impact analysis was independently undertaken by:

  • Professor Michael Woods, from the Centre for Health Economics Research and Evaluation (CHERE) at the University of Technology Sydney
  • Mr Grant Corderoy, Senior Partner at StewartBrown, an aged care accounting and business advisory firm.

We provided secretariat support.

Consultations

The public were consulted through a discussion paper, jurisdictional forums, and teleconferences in non-metropolitan areas.

A total of 244 stakeholders across the country attended the forums (including teleconferences). We received 59 written responses to the discussion paper. This included representation from various sectors:

  • aged care
  • health
  • finance
  • state/territory and local governments.

You can read a summary of feedback from the forums and see written responses (where respondents provided permission to publish) on our consultation hub.

Findings

We accepted the independent final report of the impact analysis on 31 January 2020. 

The impact analysis concluded:

  • The current arrangements do not provide a consumer-driven market.
  • Improving the ACAR and places management arrangements would provide only modest benefits for consumers and providers. Challenges associated with allocations to providers and limiting the number of residential (and residential respite) care places would remain.
  • Removing the current limits on the number of residential (and residential respite) care places and assigning these places directly to consumers could better achieve a more consumer-driven market.
  • Risks and challenges associated with major structural change can be reduced with appropriate sequencing of related reforms. 

Read the full findings in the final report.

Final report: Impact analysis – alternative models for allocating residential aged care places

This report presents the findings of the independent impact analysis into alternative models for allocating residential aged care places.

Next steps

We have not made any decisions yet about changes to how we allocate residential aged care places.

The impact analysis is an important piece of advice to Government. We are considering it in the context of increasing consumer choice in residential aged care and broader aged care reform. This includes what might arise in the Royal Commission into Aged Care Quality and Safety.

Contact

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Contact for impact analysis of alternative arrangements for allocating residential aged care places

Contact us with questions about the impact analysis project.

agedcareenquiries [at] health.gov.au

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Last updated: 
11 September 2020

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