Rudd unveils $739m aged care plan

Prime Minister Kevin Rudd has continued to sweeten his health reform plan ahead of a states and territories meeting, today announcing a $739 million takeover of aged care services.

In a statement today, Mr Rudd announced the investment will support around 5,000 aged care places or beds, and "help end the blame game" between federal and state government over hospitals and aged care services.

Under the package, the Rudd government will take full responsibility for aged care, support the development of 2,500 aged care places through zero real interest rate loans and provide $280 million to states and territories to fund older Australians stuck in hospital waiting for an aged care place.

The government will also increase incentives to GPs to provide more services in aged care homes and expand the capacity of multi-purpose support services, which provide aged care and step-down services in rural communities, by 286 sub-acute beds or bed-equivalents.

The aged care proposal follows yesterday's announcement that the federal government will inject $500 million to cap emergency department waiting times to four hours, only if the states and territories agree to the health reforms.

Under the reform, the states and territories will have to agree to forego about a third of GST revenue in order for the federal government to increase its control and funding commitments to the health system.

States and territories will vote on the reform at next week's Council of Australian Governments (CoAG) meeting.

The announcement is below:

The Rudd Government will invest $739 million in aged care to better support older Australians.

This investment will support around 5,000 aged care places or beds, and help to end the blame game that hurts hospitals and aged care services.

Through this national aged care package the Australian Government will:

-For the first time take full responsibility for aged care, including home and community care provided to older Australians.
-Support the development of 2,500 new aged care places through Zero Real Interest Rate Loans.
-Provide an estimated $280 million to the states and territories to fund older Australians who are stuck in hospital waiting for an aged care place - freeing up valuable health funding and helping to end the blame game.
-Increase incentives to GPs to provide more services in aged care homes.
-Expand the capacity of Multi-Purpose Services - which provide aged care and step-down services in small rural communities - by 286 sub-acute beds or bed-equivalents.

The health and aged care systems face a range of challenges:

-The aged care system is fragmented, with divided responsibilities between Commonwealth and state governments. This makes it difficult for older people and their carers to find and access the care that best suits their needs.
-Too many older Australians spend more time than they need to in public hospital beds because of a shortage of aged care beds - in 2006, there were 2,400 patients in hospital beds waiting for an aged care place to become available.
-Too many older Australians are unnecessarily admitted to hospital because of a lack of adequate GP and primary care in aged care homes - it is estimated that 31 per cent of transfers from aged care homes to hospitals (about 27,000 admissions per year) could be avoided through better GP care in aged care homes.
To respond to these challenges, the Rudd Government is reforming the structure of the aged care system, and making a range of investments to improve quality of aged care and expand services for older Australians.

The Government's investment in aged care will address pressure points in the system today, as well as setting out the path for further reforms.

Taking full funding and policy responsibility for aged care

For the first time, the Commonwealth will take full funding and policy responsibility for all aged care services, to end the fragmentation of aged care and to stop older Australians falling through the cracks.

This includes a transfer of resourcing for aged care services currently provided by the states under the Home and Community Care Program to the Commonwealth from July 2012. The Government will also provide an additional $34 million for the transition of the Home and Community Care Program.

This will enable the development of a nationally consistent aged care system, covering the full spectrum of services from basic home care through to high level residential care.

To help older Australians and their families more easily access information and assessment for aged care services where it suits them, the Commonwealth will also invest $32 million over the next four years in one stop shops located across the country.

More aged care places

The Government will increase the capacity of the aged care system through:

-Investing $143 million in providing more Zero Real Interest Rate Loans to support the development of 2,500 additional aged care places, and working with States and Territories to release more land and accelerate planning approval processes, so aged care homes can become operational more quickly.
-Investing $120 million in capital funding to expand the capacity of Multi-Purpose Services - which provide aged care and step-down services in small rural communities - by 286 sub-acute beds or bed-equivalents.
Taking pressure off hospitals through better services in aged care homes

The Government will expand and improve services provided in aged care settings and assist states and territories meet the cost of older patients in public hospitals by:

-Investing $96 million over four years to improve access to GP and primary care services for people in aged care - this is expected to support around 105,000 additional GP services being provided to older Australians in aged care homes over four years.
-Providing an estimated $280 million over the next four years to the states and territories through the allocation of up to 2,000 time-limited flexible aged care places for Long Stay Older Patients in public hospitals who have been assessed as eligible for an aged care place.
These measures will help take pressure off public hospitals.

The Government will also:

-Provide $10 million in additional funding to improve the viability of community care providers in rural and remote areas;
-Make 1200 Consumer Directed Care packages available, through which care recipients have a much greater say in how care services are provided to them.
Improving consumer focus and protection in aged care

The Government will invest $25 million in improving the consumer focus of aged care and reduce the complexity of current arrangements by:

-Better equipping the Aged Care Complaints Investigation Scheme to improve complaint handling and provide access to mediation and conciliation;
-Strengthening the regulation of aged care providers who hold accommodation bonds, with effect from 1 July 2011.
Planning for the future

These investments will tackle pressure points and increase capacity in the aged care system now.

To set out the path for further structural reforms, the Government will also provide terms of reference to the Productivity Commission to undertake a major inquiry into the aged care system to ensure that it is equipped to meet the challenges of tomorrow.

The terms of reference will be released at COAG following consultation with the states and territories.

The Government also recognises that one of the challenges facing the aged care system is building an adequate workforce to meet increased service demands, including boosting the number of nurses - and will have more to say on this in the near future.

Australia's aged care system provides targeted, affordable and high quality care.

These measures build on the Government's existing investments in aged care which have resulted in a nearly 20 per cent increase in funding and the addition of more than 10,000 aged care places.

In building the National Health and Hospitals Network, the Government is determined to get the hospital and aged care systems working together to ensure better health and better care for older Australians.