Speech by Hon Kevin Andrews MP

Launch of the South Australian Innovation Hub Trial, BioSA Conference Centre

Location: Adelaide


Thank you Carolyn for your warm welcome.

I acknowledge the many members of the aged care sector who have gathered this morning. In particular, I acknowledge

  • Mike Rungie, the chair of the Hub group, and the other members of the group;
  • Ian Yates the CEO of COTA;
  • Nick Ryan, the head of the Aged Care Quality Authority; and
  • Lynda O’Grady, head of the Aged Care Financing Authority,

all of whom have been closely involved in this initiative.

Before speaking about the exciting new development that we are launching today, I would like to spend a few minutes tracing the journey that we have been on in aged care over the past few decades.

The development of Aged Care

As a child growing up in country Victoria, I recall my parents caring for their elderly parents.

When my grandparents could no longer care for themselves at home, they moved in with their children. This was commonplace.

Only when acute care was required would they leave home for hospital.

Gradually this situation changed. The first aged care homes, as we know them today, can be traced to the 1950s.

For the first half of the twentieth century, State institutions such as asylums and hospitals were the main source of accommodation security for older people.

Some housing units for pensioners were provided through the Commonwealth State Housing Agreement, but these units formed only a very small proportion of the total buildings.

In 1954, the Menzies Government moved towards more efficient and effective ways of assisting older people in need of adequate accommodation through the provision of capital grants to religious and charitable organisations to subsidise the construction of ‘homes for aged persons’.

In the early years of the Aged Persons Home Act 1954, the emphasis was on housing suitable for older people, rather than aged care as such. In particular, the Act emphasised “homes at which aged persons may reside in conditions approaching as nearly as possible domestic life, and, in the case of married people, with proper regard to the companionship of husband and wife.”

In those early years, residential aged care was literally a cottage industry. Small blocks of flats and cottages were constructed with the new funding.

In 1966, the Australian Government decided to modify its capital strategy to give greater encouragement to the inclusion of nursing accommodation in homes for the aged. Large old houses were converted into hostels and nursing homes. Verandas were enclosed and extra rooms added. I still recall some of them in my own electorate when I was first elected.

Over the following decade, significant change occurred as private investment was also encouraged.

Today, there are 2,718 residential services housing some 173,094 people in Australia. In 2012-13, 226,042 people received Permanent Residential Care and 48,182 people received Residential Respite Care.

Approximately 58 % of residential places are provided by non-for-profit organisations and 36 % by for-profit organisations, reflecting the origins some six decades earlier.

Over the past two decades, home care has also grown significantly, both in response to demand from people who wish to remain in their own home, and to the cost pressures of providing more and more services.

In 2012-13, 82,668 people received care through a Home Care Package from 2,131 Australian Government subsidised Home Care Services.

The past two decades have seen significant change. Purpose-built homes began to replace the earlier structures, and a new system of accreditation, certification and regulation was introduced nationally in 1997. The changes also included new arrangements for accommodation payments.

Although there were significant ‘teething’ problems, the aged care system we see and know today emerged. Further changes have been made in recent years, including greater emphasis on consumer-directed care and funding choices.

The system that emerged was highly regulated, compliance oriented, rather than performance driven, and inflexible. Risk has been managed by government and its regulators, more than the sector itself.

While the reforms were an important stage in creating a modern, extensive and well-resourced sector, they also stifled innovation, became process-driven, restricted consumer choice, and neglected the development of good governance by the boards of providers, whether not-for-profit or for-profit.

Process and red tape became the hallmark of aged care. Regulatory requirements were duplicated at a State and Commonwealth level. Form-filling, rather than resident care, seemed more important in this regulatory environment.

Which brings me to today’s launch.

The Aged Care Innovation Hub

For the past nine months, I have been working with a group of providers here in South Australia to explore the challenges facing aged care.

As you know, we have an ageing population. The number of people needing some form of aged care is projected to increase to 3.5 million by 2050.

If we are to continue to provide high standards of care, we must also ensure that regulation is appropriate and not burdensome. We will need innovative ideas, if only because the future generations of the elderly will demand more choice, not less.

The choice of South Australia was serendipitous. A chance conversation with Mike Rungie, Ian Hardy and Richard Hearn during my ‘get to know you’ national tour after being appointed to this portfolio turned to the tentative deregulatory reforms that I had sought to enact when I was the Aged Care Minister in 2001 – 2003.

They expressed a common view about over-regulation, the squashing of innovation, the changing needs and wants of the elderly, and the desirability of working towards a concept of ‘earned autonomy’. I also had the view that South Australian providers were some of the best in the nation.

I convened subsequent meetings with them and other providers in South Australia, from which the idea for this Hub we are launching today emerged.

At the heart of this trial is the desire to allow providers greater independence in governance and quality assurance as a reward for sustained high performance in relation to regulatory obligations.

In other words, providers who consistently provide quality care to older Australians and meet their regulatory obligations will be freer to devote more time to delivering quality care and less to unproductive paperwork.

I would like to thank and congratulate the South Australian providers who have been involved in developing this initiative.

The following ten providers are taking part in the trial: Aged Care Housing Group, Barossa Village, Boandik Lodge, Helping Hand Aged Care, James Brown Memorial Trust, Resthaven, Southern Cross Care, The Society of Saint Hilarion, Glen Eagles and Monreath Aged Care.

They will all be looking to deliver innovative models of care that show improved efficiency levels and enhanced consumer benefits. In return, they will attract ‘lighter touch’ regulation.

This means that from today businesses taking part in the trial in this State will have:

  • an opportunity to have less frequent audits
  • more efficient assessment of accreditation standards
  • increased opportunities for consumer complaints to be resolved by the provider
  • opportunities to work with the Aged Care Financing Authority to improve financial data collection and reporting and;
  • potentially fewer Aged Care Funding Instrument reviews

All ten participants in the trial have agreed to commit to high levels of consumer engagement and a better practice approach to governance.

And their Boards have agreed to take a more active role in influencing future standards of care and services. Deregulation does not mean less responsibility. It means having the time to be more responsible for the things that matter.

Boards will need to provide strong leadership in relation to organisational performance for example, and take responsibility for quality outcomes for care recipients.

Boards must also be active in involving consumers – care recipients, their families and representatives – more in their services.

The wellbeing of care recipients will be critical to the success of this venture. And it is why consumer engagement is a key focus of the Hub.

I would like to thank Ian Yates and the Council on the Ageing (COTA) for helping develop a consumer engagement strategy which will support Hub providers to actively engage with consumers in the design, delivery and evaluation of care.

While we are looking to remove oppressive and unnecessary regulation, ongoing monitoring to ensure quality care and provide a check point and safety net will continue through the government’s aged care regulatory programmes.

An appropriate level of effective government regulation is essential, particularly given over $13 billion of tax payer dollars are spent annually on aged care programmes and services.

The Government will also ensure that providers continue to meet the Hub criteria. If they don’t, they will no longer be given the opportunity to participate in the trial. Should concerns arise the usual regulation processes will, of course, apply.

The goal is to strike a balance between the obligation to protect the community and regulation that hinders productivity and stifles innovation.

The importance of the role that the aged care industry plays in caring for our older Australians cannot be underestimated. To hamper this work with onerous regulatory requirements is counterproductive and not in the community interest. The industry’s expertise is better spent dedicated to providing quality care.

I look forward to the experiences of the Hub as we seek to get the balances right. It is an exciting venture.

Importantly, the whole approach has been one of a partnership between government, regulators, industry and the community.

We have worked together to develop the ideas and concepts with the providers, my Department, led by Carolyn Smith in this area, the Aged Care Financing Authority led by Lynda O’Grady, the Australian Aged Care Quality Agency led by Nick Ryan, and the Council on the Ageing.

It has been a great collaborative effort.

I look forward to hearing about the best practice strategies that develop from the Hub initiative to further improve the quality of care provided to older Australians.

Hopefully this initiative, which began with the providers themselves, will lead to a model we can roll out across the nation.

Again, my thanks and congratulations to all involved, especially the leadership of Mike Rungie from the Aged Care Housing Group.

Accordingly, I have pleasure in launching the Aged Care Innovation Hub.