The True Cost of Providing Quality Aged Care

With the recent media spotlight on reported “average” food costs in aged care and the public perception that at least some aged care providers are making huge profits (as highlighted in the StewartBrown benchmarking survey reports), I have had a closer look at some of the other bench-marked costs of the so called “1st percentile” performers to see if there is any correlation between what is being reported and a practical operational application.

Would my home pass the pub test (and could I sleep at night) if I stuck to the financial benchmarks I am supposed to aspire to?

I will start by saying this is not a StewartBrown bashing exercise. StewartBrown simply reports what aged care providers report to them. As I have previously stated publicly, StewartBrown by their own public admissions do not claim that the top performers represent a quality service. They simply take what the sector says they are spending and churn out averaged results. Quality of service or Resident, Family and Staff Satisfaction is not a consideration.

The problem I have is that the averages in the reports are wildly misleading, they compare apples with oranges and do not correlate to the provision of quality … and it is this quality that is expected by taxpayers, the government and consumers of aged care services and the lack of quality is the cause for many of the sectors very public woes.

The reports, in my opinion, present figures that can only be achieved by cutting corners and then through their publication, promote these financial achievements as the pinnacle of aged care operational performance. The words StewartBrown have now become part of the aged care vernacular in this country, much I am sure to the delight of StewartBrown itself, but to the detriment of aged care recipients, and the staff and providers who attempt to provide quality care and services beyond a flashy fascade.

This devalues the true cost of providing care to older Australians and sets up a situation where the government concludes that aged care is adequately funded because “some” can turn a healthy profit. I honestly believe that if we had a robust regulatory system with clear measurable outcomes and where assessors did not have painted on eyes, the aged care story would be markedly different and the general public would understand that you simply can't make a silk purse from a sows ear.

One of the immediately obvious flaws in this methodology is that homes are “grouped” by income and reported as broad averages, without any consideration of physical environment, age of the home, building design, mission of the organisation, ability of the service to claim funding correctly, quality of service or skills of available staff. It is because of the multitude of variables that I believe these reports lack the rigor to provide a reliable comparison for aged care providers to use with any certainty and will always produce a skewed view that will be fodder for the media.

As my services have traditionally fallen into Band 2 (ACFI of approx. $175), I have used this band (top 25% average) as my comparison in the StewartBrown reports. I have used the top 25% average (1st Percentile) as this is what everyone appears to be striving for because homes in this group are considered the most ' efficient' and the 'leading financial performers of the industry'.

Let’s look at some of the other benchmarks and compare them to the reality of a 100-bed aged care service delivering a high level of care:

Nursing Management

According to StewartBrown, Nursing Management includes:

Wages, allowances, leave, fringe benefits, superannuation, workers compensation excesses and wages paid to, or in respect of, care management staff. Typically, this would be the DON, DDON, Facility Manager, Clinical Manager and in some cases a specialist position relating to care plans or ACFI assessments. This would also include an allocation of the costs of this position should it be shared between facilities but typically these would be included as part of the administration recharge. DO NOT allocate between administration wages and care management. Total cost of facility manager should be allocated to this position.

For my new facility, I am covering the role of DON and CEO so have excluded my wages from the equation, leaving only one DDON (5 days a week), one Clinical Care Coordinator (5 days a week) and one Nursing Manager in Charge on Weekends (2 days a week) that fit this category.

There is no specialist ACFI position and no specialist care planning position.

My resident per day cost for just these three people is $8.82. If I added in a Director of Nursing at the lowest current market value this cost would jump to $12.65. The StewartBrown average is just $7.40 and supposedly includes a DON position and an ACFI position, so either everyone is working two days a week or simply volunteering their time – neither of which is true.

In the real world, DON’s are wanting $120K+, DDON’s are expecting $100K+ and a Care Coordinator expects at least $45 an hour … and rightly so when a standard on the floor Registered Nurse in a public hospital with a nurse to patient ratio of 1:3.7 (yes that is no specified in the new award) and no management responsibility earns $43.26 an hour (2017 Award).

Registered Nurses

According to the StewartBrown reports, Registered Nursing costs include:

Wages, allowances, leave, fringe benefits, superannuation, workers compensation excesses and wages paid to, or in respect of, registered nurses

I have a 4-storey building with three resident occupied floors and while I was informed yesterday by one of my RN applicants that she is currently responsible for 79 high care residents on an afternoon shift in a major NFP groups flagship home, I refuse to put my residents and staff at risk in this manner.

My Registered Nursing allocation provides for what I feel is the minimum qualified staff required to meet the clinical care needs of my residents and provide a safe work environment for staff. It also allows me to offer a supportive mentoring environment for new graduate clinicians.

I would like to have more Registered Nurses but I simply cannot afford it. I have settled on 32 minutes per resident per day as a balance between affordability and clinical care coverage which equates to 3 Registered Nurses on morning and afternoon shift (1:33) and just 1 Registered Nurse on night duty (1:100).

My resident per day cost for Registered Nurses is $30.36. Adding a second Registered Nurse on night duty would make this cost $35.58. The StewartBrown average is $18.87 which also supposedly includes wages for when staff attend education.

To reach that benchmark, I would be required to roster only one Registered Nurse, morning, afternoon and night duty so that each would have a nurse to patient ratio of 1:100 around the clock which is clearly absurd and not going to happen.

Aged Care Workers / Personal Care Assistants / Assistants in Nursing

While Registered Nurses provide an important level of clinical security and senior clinical leadership, one of the most important groups in my opinion is the aged care worker group because of their direct contact with residents, visibility to relatives and their ability to either make or break the resident experience.

According to the StewartBrown reports, this grouping includes all:

Wages, allowances, leave, fringe benefits, superannuation, workers compensation excesses and wages paid to, or in respect of, other nursing and/or personal care staff

There is much talk about staff to resident ratios and the pros and cons of using blanket ratios to determine staffing levels. It is true that there are many variables that must be considered (such as mix of residents, experience of staff, layout of building, financial arrangements of the company) so that there is no one fits all solution but there are also several fixed aspects that can be used as a guide to determining appropriate staff levels:

• The care needs of the residents as determined by their ACFI funding
• Policies and procedures that are considered generally universal (like having 2 staff to lift residents or use mechanical lifting devices)
• The time it takes staff to respond to resident call buzzers because they are too busy attending to other residents

Instead of mandating staffing levels, I would welcome the publishing of staff ratios (differentiated by morning, afternoon and night duty) so that consumers have the information to make informed decisions about what home is appropriate for their loved ones needs and expectations. The current cloak and dagger approach to staffing is not helpful to the sector or those seeking care.

Working on a care worker ratio of 1:8 in the morning, 1:10 in the afternoon/evening and 1:20 on night duty, the cost per resident per day is $78.75. This level of staffing would be the bare minimum I would comfortably roster so that I can sleep at night.  

My preferred ratio of 1:5 in the morning, 1:6 in the afternoon/evening and 1:12 on night duty would blow this cost out to over $120 per resident per day. It is noted that this amount is based upon the Aged Care Award 2010 rates which are lower than all Enterprise Agreements currently in force. The StewartBrown average is just $73.09.

Education

According to the StewartBrown definitions, this grouping includes:

Wages, allowances, leave, fringe benefits, superannuation, workers compensation excesses and wages paid to, or in respect of personnel carrying our duties such as education, quality control, quality improvement, policy development and WH&S.

Ongoing professional development for all staff is considered a fundamental part of providing quality aged care and quality improvement is supposed to be the foundational principle of our accreditation system. Given that this is the case, I expected considerable spending in this area to be evident.

Some services choose a qualified nurse educator (that commands in excess of $45 an hour) while others, including myself choose an Education Coordinator with Training & Assessment Qualifications at a considerably lower rate of pay but who is available to coordinate a range of internal and external education opportunities that have been negotiated with suppliers, RTO’s and local hospital networks. Some obviously choose no education staff at all.

I have one full time position available for my 100-bed service paid at the award rate. There is no designated quality person, or a designated WH&S person, or someone (other than me) doing policy development. The cost of this single person equates to $1.63 per resident per day. The StewartBrown average is just 68 cents indicating that many aged care services have no education staff member at all.

Education Other

Well maybe instead of providing an onsite educator, providers are investing in external education services?

According to StewartBrown definitions, this grouping includes:

All other costs associated with areas such as education, quality control and improvement, policy development and WH&S. This will include the cost of consultants, materials, software (not capitalised) or course costs for courses run by 3rd parties.

The Aged Care Channel (which is almost universally seen as the main education resource for aged care) investment for my site is equivalent to 53 cents per resident per day. To ensure my staff have at least some access to educational opportunities beyond watching a DVD or webinar, I have allocated a further $15,000 to pay for clinical specialists to deliver education, and my staff to access workshops and conferences etc and mandatory courses like the Food Safety Supervisors Course and WH&S Committee training which works out to be an almost embarrassing $166 per staff member. I pay for the vast majority of my ongoing professional development and usually only attend conferences when I am speaking because I get in free.

So, my total allocation for training is equivalent to 94 cents per resident per day and in my opinion barely enough but it’s all I can afford. The StewartBrown average is just 31 cents.

Cleaning & Laundry Services

The StewartBrown benchmarks include a number of items under cleaning and laundry services:

Wages, allowances, leave, fringe benefits, superannuation, workers compensation excesses and wages paid to, or in respect of, cleaning and laundry staff

All cleaning materials including solvents, liquid and powder cleansers, brooms, mops, buckets, paper towels, toilet rolls etc.

Contract cleaning and laundry

Cost of permanent or casual contract cleaning services. Include carpet cleaning and window cleaning services.

Almost everyone has had at least one experience of entering an aged care service and immediately regretting they did because of the overpowering smell of urine or faeces. Similarly, I am sure many have seen residents wearing clothes that need a good iron, or are stained or are in fact not even owned by that resident.

Thankfully in recent years there has been a growing acceptance that cleaning and laundry services are important and that quality service costs money. Again, there are many variables (floor covers, age of the building, layout of the building, how many complaints a provider is willing to deal with) that affect spending but at the end of the day I believe that if you respect those you care for, you will spend an appropriate amount to keep the place clean and residents well presented.

In some recent discussions with a national cleaning and laundry provider, their summation of the sector was spot on …

“We can do whatever you are willing to pay for but it all comes down to the time we provide for staff to do their job and the equipment they need to do it successfully. I can give you a service that meets the benchmarks but you will not be happy, you will scream at me, your home will smell like a public toilet and you will need new carpets in a couple of years. I can also give you a service like some 5-star groups are demanding but it will cost you more. But you can’t have 5 star outcomes and pay the StewartBrown benchmark”.

Our cleaning and laundry services will cost $10.20 and $7.00 respectively because I have a $30 million asset to look after, we have carpets (like at home) and I have residents who deserve an environment suitable to live in. The StewartBrown averages are $6.42 and $3.39.

Insurances

While we are yet to quantify our insurance costs, I did recently meet with a major national insurance broker recommended by one of the aged care peak bodies.

When we were asked what our expected budget would be, I stated “The StewartBrown average” more tongue in cheek than anything else. When I gave them the figures of this average (79 cents per resident per day), they more or less just laughed nervously and while they said, “that will be a challenge”, their eyes said, “not going to happen”. Let’s see what they actually come up with once they go out to the market.

Unfortunately, a full P&L comparison with the benchmarks is near impossible because the categories used are limited and the reports use subcategories such as “Other Resident Care” costs which are a catch-all for any number of different expenses that are not specified.

Aged Care has become a smoke and mirrors game with the regulatory bodies either unable or unwilling to rid the sector of the poor performers and ensure that all older Australians receive a quality aged care experience with people to look after them and an environment worth living in. If the general public only knew the amount of effort that went into vetting homes that the Minister or other dignitaries visit to ensure they are aesthetically beautiful and don’t stink they would be horrified. We seem so scared to admit that some in the sector are not meeting community expectations and instead of dealing with that issue, we all cop the wrath of God every time it hits the media.

It’s time we stopped trying to defend the indefensible (although I note only one peak body tried to defend the food spending issue publicly with the other two remaining completely silent) and start ensuring as a sector that those who are unwilling to provide quality services are pushed out.

With the recent closure of two homes in Sydney, the fact it took the Department over 15 years to rid the sector of a provider everyone knew was a disgrace is appalling. That provider was on the list of undesirables back in 2000 when I first joined the Department and was still there when I rejoined the Department in 2011 and when I left again in 2015.

While we will always strive to do things efficiently as possible and are constantly looking for better ways of delivering care, my homes will never be at the top of the financial performers list, and I make no apologies for that. Maybe its because the expectations are unrealistic, maybe because at the end of the day I am a nurse and have a conscience but mostly because I have to look my staff, residents and their relatives in the eye every day and cannot hide in an ivory tower somewhere in a capital city (or another state) and just push out numbers. Its about time the message got out that the sector is struggling to provide QUALITY care with the funds available and if the community wants better aged care, we need demonstrable, clear, outcomes based targets and the money required to deliver them.