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Future options for Aged Care

Timeline for Transition of Residential Aged Care

Download a larger PDF of the infographic above: Timeline for the Transition of Residential Aged Care(1063 kb)

Download a PDF of the infographic above: Port Augusta Residential Aged Care Snapshot(481 kb)

Port Augusta City Council is continuing to explore future options for the provision of aged care in Port Augusta, following the unseuccessful call for Expressions of Interest for the Development and Management of Aged Accommodation in Port Augusta in 2013.

At a Special Council Meeting on 29 March, 2016 G88 Consulting presented a report to Council, Residential Aged Services Options Analysis, outlining options to Council for future operations of its residential aged care facilities. About 80 people attended a Public Briefing on April 28, 2016 and their comments, statements and questions can be downloaded Aged Care Briefing Comments 2016(259 kb).

For an update on the Communication Strategy and Sale Process, download the Report - Update - Aged Care Communication Strategy & Sale Process(3261 kb)

Background

Port Augusta City Council’s Ageing Strategy 2007-2012 was developed after extensive consultation with the local community and was adopted by Council on 27th August 2007.

One of the key recommendations from the Ageing Strategy was:

 ‘Initiate discussions with not-for-profit aged care providers to explore the potential for a partnership approach to developing and managing additional aged care places to meet demand for services after 2015. This may involve Council ceasing to be a direct funder of services after that time. Community support for this approach would be contingent on Council establishing and publicising criteria to ensure that the level of concessional access meets community needs and that the quality of care is maintained to a very high standard.’

 Council resolved to call for Expressions of Interest (EOI) on 22 July 2013.  This EOI was in relation to aged accommodation as well as residential aged care in an attempt to address the shortage of aged accommodation in Port Augusta using the Homestead Park land whilst ensuring sustainable residential aged care into the future.  

This call resulted in five organisations expressing interest and after initial conversations, detailed discussions were held with one organisation.  This organisation subsequently withdrew interest in August 2015.

The reasons Council are once again considering options for the provision of aged care are just as valid now as they were in 2013.

Residential Aged Care is changing, both through the nature of its residents with an increased rate of dementia and through changing legislation relating to the aged care sector.

The type of care being provided is now more aligned to sub-acute care (hospital-type care). When AM Ramsay Village was established, it was a hostel for residents that were still reasonably independent and Nerrilda catered for Medium to High Care residents.  Now Ramsay has 50 per cent of its residents classified as high care and Nerrilda has residents whose care needs are more aligned to sub acute care.  More people are entering residential aged care with complex care needs, nearer the end of life or with ‘behaviours of concern’.   This requires aged care facilities to have strong health care systems that are specifically based on the health care sector, not Local Government regimes.

With the changing aged care fee structure from 1 July 2014 to more of a user pays system, prospective residents & their families’ expectations are also higher.  There is more demand for single rooms.  Current building designs at both of Council’s facilities are not well suited to current best practice nursing, especially for residents with dementia.

  1. What does Council hope to achieve?

 Council’s vision is for a well-established and reputable approved provider of residential aged care to purchase the facilities and upgrade the facilities to current and future requirements to ensure the medium to longer term needs of our community are met. 

  1. Why doesn’t Council just keep operating the aged care facilities?
  • Aged Care is a complex environment.  The staff of Nerrilda and Ramsay Village have done, and continue to do, an excellent job but the constantly shifting goal posts of the Aged Care Accreditation Standards and also the Aged Care Funding Instrument business rules are making it extremely difficult to maintain great outcomes.  The Federal Government’s ‘efficiency dividend’ (making Providers do more with less to fund the ‘longevity revolution’) is forcing all aged care providers to consider future operations.
  • The Federal Government has removed the distinction between low and high care as part of the Living Longer Living Better Aged Care reforms.  This means that all aged care facilities are required to provide ageing in place (that is residents receive a higher level of care in the facility in which they are originally placed), placing more pressure on our facilities and staff, in particular AM Ramsay Village which historically cared for low care residents.
  • The nature of aged care has also now progressed to require a health/medical care focus rather than assisted living and thus relies on thinking and systems that are outside of the expertise of Local Government.
  • Council is not in a position to borrow the large sums of money necessary to upgrade buildings to current and future standards, being close to the maximum level of borrowings that it can make.  Council is faced with increasing demands for significant spending on infrastructure and asset management to address the mounting backlog.  There is also the possibility of rate capping legislation being introduced to effectively cap the amount that Council rates can be increased to CPI.  This in turn has a negative impact on the ability of Council to provide services to the community.
  • Both facilities are facing issues in the attraction and retention of suitably qualified staff.   The use of agency staff is an added burden to the finances of the facilities.  Local Government is not able to offer salary-packaging incentives that public sector and not-for-profit organisations can provide, which can make a substantial difference to the net pay of workers in the aged care sector.  This makes attraction and retention of staff for Council more difficult.
  • Council, staff and the community have taken great pride in offering high quality residential aged care with accreditation results and feedback, which reflect this.  Council needs to investigate sustainable options for the future of aged care in Port Augusta to protect the community and ensure the facilities and services are available in the future.
  1. What if there is no suitable interest?

Council is confident there will be interest in these facilities given there is no other competition in Port Augusta and the aged care acquisition market is now much more active and competitive than in 2013.  This was due to providers cautiously awaiting an understanding of the impact of the July 2014 reforms.  If there are no interested parties, or none that are deemed suitable, Council will not proceed with the sale of the facilities at this time.  However, it will still need to review its operations to meet the changing environment and be in the best position to meet the aged care reforms.

  1. What conditions will Council place on the sale of the facilities?

 Care of the residents and continuing employment of the majority of staff is paramount and respondents will be asked to address certain assessment criteria including their commitment to:

  • retain or exceed existing service quality
  • retain the bed licences actively in Port Augusta
  • protect the rights of existing residents (security of tenure)
  • retain the majority of staff
  • maintain access for low income people (the minimum mandated supported resident ratio for the region is 27.5per cent), and
  • achieve nil or minimal residual debt
  1. Who would Council hope to see operating its aged care facilities?

 It would likely be a well-established, reputable, approved provider that is already a specialist in the management of aged care facilities and accommodation and has similar values to Council.

  1. What does this process mean for staff of Nerrilda and Ramsay Village?

 It will be business as usual for staff of both facilities whilst processes are carried out.  Staff will be kept fully informed of the processes.

Please remember that one of the key assessment criteria is the transmission of employment of the majority of staff if/when any transfer of ownership occurs.  Staff will be subject to relevant award clauses including ‘transmission of business’.

  1. What does this mean for residents of Nerrilda and Ramsay Village?

 Residents will not be affected as all residents have Security of Tenure provisions within their Residential Agreement.  A key assessment criteria will be that existing aged care residents will not be disadvantaged as a result of any proposed transfer of management to an Approved Provider.

The Department of Health must be satisfied that existing residents will not be disadvantaged in any transfer of management.  There is a requirement to detail these arrangements as part of the application to the Department of Health to transfer bed places.  If the Department of Health is not satisfied, the transfer of bed places cannot occur.

  1. What is the next step?

If Council resolves to sell the facilities, an external broker who specialises in aged care will be engaged to support Council staff in the sale process.

  1. Nerrilda is on Crown Land, can it be sold?

 The business of Nerrilda Nursing Home can be transferred to another Approved Provider if all requirements are met.  However, the land that Nerrilda Nursing Home is situated on cannot be sold by Council as it is Crown Land.  This land has an endorsement on the Certificate of Title that it must be used for Aged Accommodation purposes.  Therefore the land/building cannot be used for any other purpose without permission of the Government.  Initial discussions have commenced with the relevant Government agency regarding the required processes.

  1. What about the Nerrilda Auxiliary?

The Auxiliary have been a vital part of Nerrilda for many years and the commitment by members of the community to actively fundraise for the benefit of the residents is acknowledged and appreciated and hopefully these activities would continue unchanged.

Funds raised by the Nerrilda Auxiliary are used to purchase equipment to enhance the quality of life of the residents of Nerrilda Nursing Home.  The existing process is that the Care Manager approaches the Auxiliary with a ‘wish list’ of equipment to be purchased.  The Auxiliary decides where the funds will be spent.  It is not anticipated that this will change.  The residents of the Nursing Home will continue to need the support of the auxiliary no matter who the Approved Provider is.

  1. What would happen to the money donated by the German Club that is earmarked for the care of residents at Nerrilda and Ramsay?

The money will be used as it was intended, which is to purchase equipment to support the care of residents at both facilities.  Council is in control of the funds, as agreed with the German Club, and this would remain the case if the management of the facilities were transferred.

  1. Will the sale of the facilities reduce my rates?

The sale of Nerrilda and Ramsay Village will only have minimal effect on rates in Port Augusta in the short term.  There will be efficiencies across some functions within Council such as HR, payroll and accounts payable and loan repayments (for 2006 building work) will cease.  However, if the facilities are not sold, the cost to ratepayers for operating these facilities will increase over time as the facilities struggle to operate within the aged care environment.

  1. Are other Council’s involved in managing Aged Care Facilities?

Of the 68 Council’s in South Australia, Port Augusta City Council is one of only three Councils that manage aged care facilities, with only one other regional Council in aged care and one metropolitan Council. 

 The City of West Torrens recently sold its ‘St Martin’s Nursing Home’ to a large national publicly listed for-profit company.

Alwyndor (134 beds) is operated by the City of Holdfast Bay under the ‘Dorothy Cheater Trust’ and is located within a relatively affluent catchment area which has supported its long term profitability and growth.

Lerwin (75 beds) is operated by the Rural City of Murray Bridge.  After an extensive period of strategic analysis and community consultation, the Council has recently decided to continue to manage the Home directly.  The confidence to choose this option was possible as a result of a lengthy period of capacity building and sound financial results.  A three-year business plan has been implemented to continue to drive performance and monitor outcomes.

There has been a trend nationally of local government leaving the industry.

  1. Where can we find out more information?

 There are a number of resources that will give you a broader view of the issue Council is facing in the delivery of aged care. 

The impact of the aged care reforms and the increased number of dementia residents is not isolated to Port Augusta.  These are issues facing aged care providers nationwide, which is one reason specialist aged-care organisations are best positioned to manage the facilities.

 

    • Council’s 2007-2012 Ageing Strategy

 

Port Augusta CEO John Banks said despite the initial process in 2013  being unsuccessful, Council needs to continue to explore future options for provision of aged care services in Port Augusta.

Mr Banks said the reasons for commencing the process to explore future aged care options are as valid now as they were in 2013 when the process began.

“As is being experienced nationally, Port Augusta has an ageing population with a growing need for service delivery to cater for older people.  This includes a rapid increase in dementia-related disorders which impacts on the way we manage care recipients and the design of our facilities as well as the need for suitable retirement village-style accommodation,” Mr Banks said.

“There is a distinct lack of suitable accommodation for older people to move into to allow them to stay at home longer, which is a key focus of the Federal Government’s Living Longer Living Better Strategy (LLLB).

 “Residential Aged Care facilities are also experiencing the flow on effects from the Federal Government’s focus on Home Care which is that more people are entering residential aged care require a higher level of care, and may have severe behavioural and psychological issues which are more difficult to manage.”

Port Augusta City Council is one of only three Council’s left in South Australia that provide residential aged care, with the others being the Cities of Murray Bridge and Holdfast Bay. The City of Murray Bridge is also exploring options in relation to future operations of its aged care facility.

 

Download a PDF of these Frequently Asked Questions:Frequently Asked Questions - Aged Care April 2016(354 kb)

  

Why Council opted to explore Aged Care Options for Port Augusta

Port Augusta City Council decided to investigate if it could attract the development of additional aged accommodation to the City in 2013.

The shortage of suitable housing for older people has long been acknowledged in Port Augusta with the need for smaller, assisted-living style housing highlighted in Council’s Ageing Strategy 2007-2012 ‘Making Port Augusta a Better Place to Grow Older’.

In an attempt to secure this style of adaptable housing, Port Augusta City Council also explored the option of having the one specialist care provider to also deliver the residential aged care services that are presently provided by Council.  This would have included AM Ramsay Village and Nerrilda Nursing Home. 

Port Augusta City Council’s Director of Community Services, Anne O’Reilly, said Council sought expressions of interest from not-for-profit Approved Providers of residential aged care and retirement housing for the development and management of aged accommodation in Port Augusta.

There have been many changes in residential aged care since Council became involved in its management.  It is now far more aligned with sub-acute care and there are an increasing number of residents with dementia and ‘behaviours of concern’.

The new aged care reforms ‘Living Longer Living Better’ also impacts on the management of the facilities and Mrs O’Reilly said a specialist aged care provider is much better positioned to respond to these reforms than Local Government.

Council's aim was to attract a specialist aged care provider that could build and manage assisted-living style accommodation on the Homestead Park site, and could align in with the specialist health care services it would have provided at both aged care facilities.

Download a list of Questions and Answers around the initial Expression of Interest process in 2013 Aged Care Q & A(157 kb)

Links to relevant documents & further information:

2007-2012 Ageing Strategy ‘Making Port Augusta a Better Place to Grow Older’ Port Augusta Ageing Strategy(367 kb)

Federal Government’s Living Better Living Longer information

Productivity Commission 2011, Caring for Older Australians, Report No. 53, Final Inquiry Report,Canberra. http://www.pc.gov.au/projects/inquiry/aged-care/report