Ratings system more than box-ticking

The federal government’s recent introduction of star ratings for residential aged care implements one of the Aged Care Royal Commission’s important recommendations.

All residential aged care services in Australia now receive an overall rating between one and five stars across four sub-categories: residents’ experience; compliance; staffing; and quality measures.

This is exciting stuff. The aged care system is complex and navigation by consumers is difficult.

Decisions to move into a residential aged care facility are not made lightly and are hard to undo.

So, star ratings are not intended to be another customer satisfaction score press release, they are intended to help older Australians and their families compare the quality and safety performance of different residential aged care services and help them make important decisions about their care.

The first star ratings were released in December 2022 with the bulk of the sector receiving three stars (54 per cent) and four stars (36 per cent).

Those ratings were assessed during a period of massive upheaval caused by COVID-19, ongoing and relentless reform arising out of the royal commission, significant challenges around workforce, and more than five successive years of significant aggregate operating losses.

(A new StewartBrown analysis revealed residential aged care facilities lost an average $21.29 a bed a day in the September 2022 quarter compared to $7.30 in the same quarter in 2021.)

There are some teething problems.

Some providers have received surprising ratings (low) and the Department of Health has admitted that several ratings had been “amended” after “further data validation”.

Arguably, data errors are to be expected in the early days of a roll-out.

Of more concern are reports of a rushed resident interview process, particularly regarding the ‘resident experience’ component, which required interviews with more than 20,000 residents across 2,700 locations.

This speaks of a process that needs more care and thought, not only to alleviate resident distress but to ensure the community and the sector trust in and respect the outcome.

A further concern is that the resident experience component of the rating is unable to be appealed by providers.

Other issues relate to the lag in data.

Quality assessments are generally only carried out annually, as is the case with the resident experience surveys.

A service that has made significant improvement will continue to be penalised by a low star rating until their next assessment or resident interviews.

Finally, there is the way in which the star rating for ‘staffing’ works.

Effectively, the Australian National Aged Care Classification funding model funds the care-minute requirements for each service up to three stars.

So, if a service wants to achieve four stars or more for staffing, it will need to find the funding to resource this from somewhere else.

That might be fine in the private sector where the supplier effectively decides what and how it might charge a consumer.

However, in aged care, pricing is heavily regulated and opportunities to maximise revenue on this front are limited.

The extra funding required to fund a four- or five-star staffing rating would generally need to be achieved through cost-cutting in other areas of the service, or through crosssubsidisation from other businesses operated by the provider.

This presents a significant challenge, particularly for the regional, remote and smaller providers.

And given the extraordinary workforce challenges, along with the costs and operational issues associated with agency staff, my bet is that most providers will choose to sit on three stars rather than strive for higher.

However, it is early days. Presently we have a single point of data, no trend, or other comparison points.

Much of the data was also collected under a now-superseded funding model, which influenced certain operational decision-making by providers in a different way to the new funding model (AN-ACC).

Star ratings will be a powerful tool to help navigate a complex system.

First, though, these teething problems must be ironed out and accuracy of data input assured.

Only then will the scheme have the trust and respect of its two main stakeholders: our older Australians and our providers.

Thanks to Andreas Geronimos, solicitor, aged care and disability, for his contribution to this article.

• Amber Crosthwaite is a commercial lawyer specialising in seniors living, aged care and disability