The budget’s health check

A budget for a “more resilient Australia” is how Treasurer Josh Frydenberg framed the 2021-22 Federal Budget.

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Ongoing support to that end in the budget’s health portfolio comes from funding the four pillars of the Long Term National Health Plan:

  • Medicare and the Pharmaceutical Benefits Scheme (PBS);
  • hospitals;
  • preventive health, mental health and sport; and
  • medical research.

Continued support for responding to COVID-19 is another prerequisite for resilience in the Treasurer’s second pandemic budget.

"The aged care sector’s issues won’t – or simply can’t - be solved in the parameters of a single budget.”

Funding for a wide range of COVID-19 response-related measures covers vaccine rollout and responding to outbreaks ($A1.2 billion), testing including pathology testing ($A557.1 million), universal telehealth ($A204.6 million), GP-led respiratory clinics ($A87.5 million), and COVID-19-specific support in aged care ($A90 million).

On top of the response to COVID-19 there’s also the response to the Royal Commission on Aged Care Quality and Safety. This dominates as the extraordinary item of interest this year.

Profound, generational and transformative?

Pre-budget teaser announcements flagged new funding for aged care of around $A17.4 billion over the next four years. Post-budget night, still much detail remains forthcoming. It is not yet clear if the Government’s response is as “profound, generational and transformative” as the Health Minister described it on budget night.

Earlier this year, it was estimated the aged care system would require additional funding of $A7-9 billion per year if it were to adopt measures recommended at the lower end of the cost range by the Royal Commission.

Regardless, new funding for aged care is likely to be welcome in the sector. But as many observers noted pre-budget, the sector’s issues won’t – or simply can’t - be solved in the parameters of a single budget.

The Government’s response - and spending over the next four years - is founded on five pillars:

  • $A7.5 billion for home care
  • $A7.8 billion for residential aged care services and sustainability
  • $A942 million for residential aged care quality and safety
  • $A652.1 million for workforces
  • $A698.3 million for governance

Measures are flagged for each of these within the context of a five-year plan.

In the short term at least, some might suggest the plan really rests on three core elements when it comes to operations.

First, a material increase in the number of home care places: 80,000 places over two years, 40,000 in FY22 and another 40,000 in FY23. This will reportedly take total home care places available up to 275,600 by June 2023. While this represents a material step-up in the number of places available, will there be challenges in delivery? And which level of care will those places go towards? Will additional supply address demand at the right level of care?

Second - and another pre-announced element - is an increase in the daily fee of $A10 per resident through a new “Basic Daily Fee Supplement”. Provided there are no material strings attached, this will be a welcome funding injection for operators.

Third, $A3.9 billion in funding designed to address quality of care issues. The investment here is into increasing care time provided to residents to an average of 200 minutes per day (including 40 minutes of care provided by a registered nurse) and providing a registered nurse at a facility a minimum of 16 hours per day.

There’s much for the sector and others concerned to digest, dissect and question. For example, what will come after the Aged Care Approvals Round (ACAR) process is discontinued from 1 July 2024? At the budget night ministerial Q&A session, Minister Colbeck suggested the Government would be putting some new programs in place of ACAR but also looking for “innovation in delivery”.

How will a transition to new design standards be managed? And what is the timeline for investigating new ways of raising capital and the review of the use of Refundable Accommodation Deposits (RADs)? We’ll be watching for the details.

Expanded network

Mental health funding is another notable big ticket item. Here the Government builds on some of its response to the pandemic from last year as well as making further responses to recommendations from the Productivity Commission and the National Suicide Prevention Adviser.

An additional $A2.3 billion is allocated for improving mental health services provision and an expanded network of mental health services as part of the National Mental Health and Suicide Prevention Plan (suicide is the leading cause of death for those aged 15-44).

This includes funding over the next four years across:

  • $A248.6 million for prevention and early intervention
  • $A298.1 million for suicide prevention
  • $A1.4 billion for treatment
  • $A107 million for support for the vulnerable
  • $A202 million for workforce and governance

Treatment and services delivered via “multidisciplinary mental health treatment centres” is where the lion’s share goes, across three models: Head to Health adult mental health centres; headspace youth treatment centres; and Head to Health Kids. These services are designed to bridge a gap between those too unwell to get services via GPs but not unwell enough to require inpatient hospital services or intensive community care.

More investment in face-to-face services, prevention and early intervention are the types of steps that observers continue to call for. Still, investment in these new services should directly benefit the service providers and practitioners involved, along with their patients.

Rural health

Budget investments under the ‘Stronger Rural Health Strategy’ banner include $A123 million in rural health workforce and training and $A65.8 million to increase the Rural Bulk Billing Incentive with higher bulk billing payments based on remoteness for doctors working in rural towns and remote areas.

The remote doctors concerned will likely welcome the measures to the extent they support practice viability, while others will keep higher MBS rebates on their wish lists.

Glen Fisher is Associate Director for Health at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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