August 12, 2022

Specialities

Albanese government supports case for aged care pay rises

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The Australian Nursing and Midwifery Federation (ANMF) says the Federal Government’s Submission supporting a pay rise for aged care nurses and care workers will finally recognise the chronic undervaluation of employees and set the platform for better recruiting and retaining workers in the sector and, ultimately, better care for older Australians.

The ANMF and the Health Services Union (HSU) have already made landmark applications to the Fair Work Commission’s aged care work-value case, for a 25% across-the-board increase in award wages for the country’s lowly-paid aged care workers.

ANMF Federal Secretary Annie Butler said the Submission by the Federal Government is a long-awaited recognition that the work of aged care nurses and carers continues to be undervalued and that an increase in award wages is strongly justified.

“We appreciate the Government’s support for our ongoing ANMF campaign to improve the wages of aged care workers, whose work has never really been properly valued,” Ms Butler said today.

“We welcome the Government’s agreement that current award rates do not adequately reflect the value of aged care workers, particularly in light of their extraordinary efforts over the last 30 months of the COVID-pandemic, which has already claimed the lives of more than 3,000 elderly Australians.

“The nature of the work required across the aged care sector has developed considerably over the years and become signifcantly more complex, requiring greater skill and responsibility under increasingly difficult conditions, with a diminishing workforce.

“That’s why we believe the Government’s support for a wage increase for nurses and workers will create the opportunity for well-paid jobs and provide a platform for nurses and care workers to be recruited and retained in the under-resourced aged care sector.”

Ms Butler said the Submission demonstrated the Albanese Government’s ongoing commitment to fixing aged care after the introduction of new Legislation which will ensure that a registered nurse (RN) is on-site in every nursing home 24/7 and that nursing home residents will receive a minimum amount of safe, quality care every day from a suitably valued workforce.

Private profit at root of global aged care crisis: PSI

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The disaster wreaked upon aged care by COVID-19 is a consequence of policies that have turned aged care into a profit-making opportunity for corporations, according to two new studies by Public Services International (PSI).

The PSI reports make it clear that long-term aged care was “already beset by multiple crises stemming from the promotion of profit-making above patient care” even before the arrival of the pandemic.

The reports say the sector had “pre-existing structural risk factors” that left it vulnerable to the coronavirus.

The two most important factors were a “privatisation juggernaut” and a more hidden trend of “financialisation”, which has led to a flood of private equity firms, hedge funds and banks investing heavily in the aged care sector.

Globally, privatisation of the sector has been relentless.

In 1979, nearly two out of three residential and nursing home beds in Britain were provided by the state; by 2017, this had fallen to one in 20.

At the same time, in most developed countries, government spending on the sector stagnated or fell.

Investors from the finance sector often “deploy tools, techniques and tricks – each quite legal, many highly acquisitive, often involving large-scale borrowing – to syphon wealth out of this sector for themselves, instead of investing for better care”.

The intersection of this financial model in aged care with the arrival of the coronavirus exposed the vulnerability of aged care during a health emergency.

Throughout the developed world, including Australia, nursing homes have been at the epicentre of the pandemic, with a disproportionate number of deaths compared to the rest of the population.

The consequences for residents have been tragic.

Within the first year of the pandemic, four out of 10 of the people who died from COVID-19-related causes were nursing home residents, according to an analysis of 22 OECD countries.

“While the pursuit of market solutions to care has been rationalised as a budgetary cost-saving measure, more than ever it is evident that the economic and social costs of reliance on private investment outweigh the benefits,” the PSI says.

Tax evasion common

PSI says aged care is widely seen as attractive for investors because it offers low risk and high returns, rising unmet demand, and a lack of regulation of the quality-of-care provision.

It is low risk with high returns thanks to government funding.

PSI says a number of investigations have shown that these financial institutional investors extract profits through ownership and business models designed to transform government subsidies and resident fees into other sources of income, including lease agreements, management fees, interest payments to owners, and related-party transactions.

The role of rental income from nursing homes as lucrative real estate assets is especially critical, often in conjunction with complex multinational company structures to facilitate tax evasion.

For-profit providers also engage in a number of strategies to minimise costs, mostly focused on reducing labour. Such methods include short staffing, contracting out, wage suppression and erosion of conditions.

A key difference that emerges from many studies comparing for-profit, non-profit and public facilities is the adequacy of staffing.

Perverse financial incentives have been found to encourage for-profit providers to limit the care and treatment that could prevent hospitalisation, instead transferring responsibilities back onto healthcare systems.

No accountability in Australia’s aged care system

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The PSI reports found Australia has a “systemic” aged care crisis where private provision and financial engineering allowed companies to hoover off massive amounts of government funding at the expense of care.

The reports found that Australia’s largest for-profit aged care companies are not accountable for the billions in public funding they receive, and instead prioritise financial returns above elderly care.

They found that the six largest for-profit providers were running more than a fifth of all residential aged care beds and were getting nearly $2.2 billion in annual government subsidies. They then used complex corporate structures, often via tax havens, combined with internal transactions, to lower reported profits and reduce their tax bills.

One company, Opal, paid $2.4 million in tax over two years while paying out an estimated $62 million in dividends. Another company, Allity, told a Senate hearing in 2018 that a loan from shareholders charged at 15 per cent annually was “market rate”.

The nine largest “not-for-profits” received $4.4 billion in gross income in 2019 from government funding, residents’ fees and other sources, and received an average A$66,000 in government subsidies per care place.

PSI says public sector facilities in Australia have been much safer than those run by private organisations during COVID.

Australian Financial Review reported in July that of the 35 COVID-19 deaths in care homes in the state of Victoria, all of them had occurred in privately run care homes – even though Victoria has over 180 publicly run care homes.

Struggling to plug the workforce gaps

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COVID is taking an appalling toll on nursing home residents and slashing workforce numbers to below the bare minimum.

For the past seven months, registered nurse Glen O’Driscoll has been a member of a COVID “Flying Squad” – a rapid-response workforce assembled by his employer, a residential aged care provider.

The Flying Squad is deployed to facilities with COVID outbreaks, to replace aged care workers who have become ill with COVID and cannot report for work.

A resident of the NSW South Coast, Glen is currently posted to Griffith in the Riverina district and has also been sent to the Central Coast and Far North Coast.

So severe is the staff shortage that he sometimes works from 7 am to 10 pm.

“Current versions of the virus appear to be less pathogenic but more contagious than earlier versions. People are now getting COVID two and three times, and facilities have been getting repeat outbreaks for some time,” he says.

“It’s hard and sometimes impossible to keep even a bare-bones workforce on the care-home floor when care staff have to isolate.”

Glen says a lot of very experienced RNs and care workers have left the sector due to inadequate staffing, bad working conditions, low pay and opposition to mandatory COVID vaccination.

He says the recent spike in aged care deaths reflects a trend observed in the UK.

“COVID contributes to the burden of disease in frail and aged people who already have multiple chronic health problems.

“While COVID may not be the single cause of death in the frail and aged, its additional physical burden contributes to a shortened life span and earlier death.”

He suspects a reduced quality of care may also be contributing to the increased death rate.

“When facilities are in COVID outbreak lockdown, residents have weeks of isolation and restricted mobility. Usual physical activity, social interaction and family contact declines.

“COVID also causes them to lose their appetite, so they lose weight.

“In aged care, most people who get COVID don’t bounce back well.”

Glen says the immediate challenge is to get enough care staff on the floor to meet minimum staffing levels and deliver essential care in a timely manner.

“Until that happens, you can’t begin to work on delivering the standard of care that the Royal Commission into Aged Care Quality and Safety has recommended.”

He thinks a pay rise from the case now before the Fair Work Commission will make the sector more attractive and improve staff recruitment and retention.

“It might also encourage people to enrol in TAFE and university courses to get their aged care qualifications.

“Even if existing workers get an immediate wage rise, it will still take time for new grads to fill the staffing gap.”

He says immigration will have to be part of the solution, but that will create additional pressure on the property market.

“Where are the tens of thousands of immigrant workers needed to fill the staffing gaps going to live?

“The rental property market is already under severe strain in all regions where aged care staff are needed.

“The low incomes of existing aged care workers mean they can’t afford to buy into property.”

Glen says the current 457 visa is unfair and discriminatory and needs to be changed.

“Good people I work with every day – Nepalese, Indians, Fijians and many other foreign workers – are effectively indentured workers.

“They are under strict visa conditions and must work wherever they are deployed.

“They won’t say anything about the injustices in the system, their difficult living circumstances, their poor wages or the extra overtime they’re asked to do, because they hope to eventually obtain permanent residency in Australia and are afraid of jeopardising their chances.

Glen says the aged care system is based on the “least cost model”.

“The deep social injustices delivered to all participants in the aged care system are a consequence of this model, which is incapable of meeting the staffing crisis.

“It cannot and never could deliver the standards of care recommended by the royal commission.

“The standards of care recommended by the royal commission must be adequately funded and staffed by federal and state governments if any meaningful change is to be effected.

“It’s up to aged care workers to advocate for change.”

Surge in aged care deaths

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By the first week of July, nursing homes had reported 2055 deaths related to COVID during 2022, Department of Health and Aged Care data shows.

The number dwarfs the death tolls of 231 in 2021 and 686 in 2020.

The 2972 COVID-related aged care deaths since the start of the pandemic accounted for 29 per cent of the COVID death toll among the total population, which was 10,190.

Departmental statistics also show a sharp upturn in aged care COVID fatalities, with almost 100 residents dying from COVID each week by early July.

This was well above the weekly average of 69 since the beginning of March, when the previous Omicron wave ended.

The surge in the weekly number of deaths was accompanied by a steep rise in the number of active nursing home outbreaks.

Annie Butler, federal secretary of the Australian Nursing and Midwifery Federation (ANMF) called on the public to wear masks, stay home while sick and ensure their vaccinations are up to date, to help relieve pressure on aged care services.

Minister ‘confident’ on RNs in aged care

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The federal minister for aged care, Anika Wells, has raised hopes that every nursing home in Australia will soon have a registered nurse on site 24 hours a day.

In the run-up to the May federal election, Labor promised to mandate RNs on site 24/7, as advocated by the NSWNMA and the Australian Nursing and Midwifery Federation (ANMF), and recommended by the Royal Commission into Aged Care Quality and Safety.

The federal minister for aged care, Anika Wells, told The Guardian newspaper in July she was confident the Labor government could meet its commitment on RNs by July 2023.

The 2020 aged care workforce census reported that of Australia’s 2716 nursing homes, 80 per cent already rostered an RN on duty overnight.

Some states already require at least one RN on site 24/7.

Others, such as NSW, require at least one RN on site for morning and afternoon shifts and in some facilities at night.

The ANMF estimates that just over 750 registered nurses would be needed to ensure at least one RN on site 24/7 in all Australian nursing homes.

The ANMF says this number could come from the existing RN workforce.

More than 80 per cent of RNs working in aged care currently work part time.

In surveys conducted for the royal commission, a majority of ANMF members working in aged care indicated they would work more hours if their employer offered them.

The ANMF has also pointed out that several hundred nursing graduates are unable to find secure, meaningful employment each year.

Morrison left a mess

Labor’s pre-election promises on aged care also included mandating at least 215 minutes of care per resident per day, and supporting and funding a pay rise for aged care workers.

Ms Wells told The Guardian that increasing the care workforce remained a challenge.

Declaring the sector to be “in crisis”, she said Labor had inherited “an absolute mess” from the Morrison government.

“It was in crisis before COVID hit, and COVID has exacerbated all of those conditions, particularly workforce,” she said.

Australia’s long border closure for COVID had stopped workers from coming in from overseas, others went back to their home countries during that time, and “a lot of aged care workers are burnt out”.

Ms Wells is in talks with the immigration minister, Andrew Giles, about how changes to the visa system could help bring in the workers Australia needs, but she said this was only “one piece of the puzzle”.

“We have to get people who have left the workforce back into the workforce; we have nurses working part-time hours who would gladly take on more hours if the money was there to make it justifiable.”

She also confirmed the Labor government would support a pay rise for aged care workers in a case currently before the Fair Work Commission (FWC).

Unions are seeking a 25 per cent pay increase and Ms Wells said the government would fund whatever increase the FWC decides.

She said aged care needs “urgent reform as quickly as possible” alongside an overhaul of the funding model to ensure the sector remains financially viable.