Aged care: new model deals with issues spotlighted by COVID-19

COVID-19’s deadly progression through Victorian aged care facilities has focused the public’s attention on the devastating consequences of having a funding system for the aged care sector which is “no longer fit for purpose”, according to an expert who has led efforts to develop a new casemix classification model.

“COVID-19 has brought to the attention of the public issues that advocates in the industry – that is families, consumers and other aged care advocates – have been saying for a really long time,” said Professor Kathy Eagar, Director of the Health Services Research Institute at the University of Wollongong.

Professor Eagar is lead author of research published in the MJA outlining the Australian National Aged Care Classification (AN-ACC).

The AN-ACC comprises 13 aged care resident classes reflecting differences in the care needs of different types of residents and in the amount of care that each resident needs each day.

“There is one payment class specifically for people moving into residential care in order to receive palliative care. Apart from the palliative care group, the primary branches were defined by the resident’s mobility; further classification is based on capacity to manage activities of daily living, cognitive function, mental health problems, and behaviour,” Professor Eagar told InSight+.

The authors wrote that a 2017 review of the Aged Care Funding Instrument concluded that the model, which has been used since 2008, was “no longer fit for purpose”.

To design the new casemix classification, the researchers conducted a cross-sectional study involving 1877 aged care residents and 1600 staff in 30 non-government residential aged care facilities in Melbourne, the Hunter region of New South Wales and northern Queensland.

Professor Eagar said there was “widespread anticipation” that the AN-ACC classification, as well as a broader funding model, would be adopted as part of the federal government’s response to the Royal Commission into Aged Care Quality and Safety.

The Commission’s Interim Report was released late last year, and final submissions closed on 31 July 2020. The final report is expected in February 2021.

Professor Eagar said the classification was part of a new funding model that had six core principles:

1. Funding assessments and care planning assessments must be separate to eliminate any perverse incentives.
2. Care planning assessments conducted by residential aged care facilities need to be resident-focused, and not funding focused.
3. Funding assessment should be undertaken by independent, expert clinician assessors (these include registered nurses, occupational therapists and physiotherapists).
4. Facilities should receive one-off adjustment payments to account for the additional costs associated with residents moving into a home. “Many residents will be quite disoriented and may need some additional orientation time,” Professor Eagar said.
5. Fixed costs (“base care tariffs”) should be recognised and should vary according to the type and location of the facility. For example, the base care tariff for an Indigenous aged care facility in remote Australia would be 460% of the tariff for a metropolitan facility.
6. Variable costs per day would reflect the 13 classifications in the AN-ACC.

Professor Joseph Ibrahim, Head of Monash University’s Health Law and Ageing Research Unit, said aged care funding was extremely complex, and a casemix model was able to account for the variations in the patient populations in aged care facilities.

He said it was important to explore different models to resource aged care and to debate the goals the models were seeking to achieve.

“There are two things to be mindful of. The first is the objective of funding and resourcing – is it to encourage residents and facilities to improve people’s function, and not just simply based on a level of deficit?

“The second thing is, it doesn’t matter what model you use, if the total amount of money available doesn’t change; finding different ways to slice up the same pie isn’t going to be that helpful.”

Professor Eagar said the new model had embedded incentives for care providers to improve the independence of residents wherever possible.

“We have recommended that there is no requirement to seek a reassessment for residents,” Professor Eager said. “So, if a resident is assessed as being in a high paying classification, they will remain in that classification regardless of any improvement in their independence.”

Facilities could, however, apply to have residents re-classified if their care needs significantly increased.

Under the current Aged Care Funding Instrument (ACFI), assessment is conducted by the aged care facility so there is an incentive to categorise the resident into the highest paying classification.

“At the moment, a facility gets paid more if a resident has challenging behaviour or has a pressure injury, and if you actually manage that behaviour or heal that pressure injury then, in theory, funding will be reduced,” she said.

Professor Eagar said the AN-ACC model could also underpin mandated staffing ratios in aged care. She noted that her team’s research had recently shown staffing levels in Australian aged care to be “unacceptably low”.

“There is a very strong push for better staffing in residential aged care,” Professor Eagar said. “One of the arguments mounted against mandated staffing ratios in aged care has always been that some residents need more care than others. But we can use this AN-ACC classification to adjust mandated staffing ratios to take into account the mix of residents because the classes are predictive of the amount of care the residents each class needs.”

Professor Eagar said the classification would also assist in outcomes measurement.

“It’s important that we have public reporting of outcomes like pressure injuries or falls, but clearly the likelihood that you fall depends on how mobile you are to start with,” she said. “You need to be able to risk-adjust quality indicators and adverse events to take into account the mix of residents and you can use the AN-ACC classification for that as well.”

Professor Eagar said more work was needed to build a stronger evidence base for aged care in Australia, and this model should be regarded as “version one”.

“It needs to be regularly updated to take account of the changing needs in the sector.”