No surprise about the aged care scandal — it comes after years of warnings

The surge of COVID-19 cases in Victoria’s aged care facilities is a crisis many people saw coming. There are more than 700 cases linked to the sector and nearly half the Victorians who have died from the virus are aged care residents. 

This comes after years of warnings being sounded. Last year the Royal Commission into Aged Care Quality and Safety released a damming scathing interim report which said older people had been “left isolated and powerless” in a “cruel and harmful system”.

But who’s responsible for the deterioration of the sector, and how did it reach this point?

Who’s in charge?

While Premier Daniel Andrews has had to face the media after each day of rising cases in Victoria, he’s not responsible for aged care. It is run by the federal government. 

“We don’t run this sector, but the residents in these homes are all Victorians,” Andrews said yesterday.

Aged care gets funding through a typically confusing public-private system.

In 2018-19 the Commonwealth spent $20.1 billion on the sector, about 70% of which goes to residential aged care. That money largely subsidises work done by private providers, although some services are delivered directly by state and territory governments. 

The amount of subsidy paid is based on a facility’s assessment of each resident’s needs, based on the aged care funding instrument. 

Those providers are a mix of charitable and religious institutions and private companies — and the top six companies operate more than 20% of residential care beds in the country.

One particularly damning figure emerged yesterday: just five of the 769 active COVID-19 cases linked to aged care in Victoria were in public facilities, about 10% of which are government-run. 

Is it underfunded?

Well, yes and no. Commonwealth funding has actually increased over the past few years. The bigger problem is where that money is going.

Crikey’s analysis of a productivity commission report released in January pointed out that the biggest beneficiaries of funding increases in the sector were private providers.

But it’s a more complicated picture than that. Documents obtained by The Australian under freedom of information last year indicated that the government, despite increasing funding, was trying to create “winners and losers”.

There are also issues with the aged care funding instrument — it pushes providers to over-claim by categorising certain residents as more expensive, allowing them to get more funding without it correlating with an increase in quality of care. 

How did we get here?

Many issues around aged care can be linked back to marketisation, which kicked off with the Howard government’s Aged Care Act in 1997. That opened the door for private equity and other firms to break into the aged care sector while winding back staffing safeguards.

But other big structural factors have hindered the sector for years. It relies heavily on insecure, often migrant, labour and, increasingly, staff work in more than one facility.

That reality has allowed the virus to be spread through facilities across metropolitan Melbourne.

The royal commission is due to hand down its final report at the end of February. But there have been commissions and reports and inquiries into the sector for decades, with little clear improvement. It’s hard to imagine the pandemic being any different.