Aged care funding under spotlight at royal commission hearing in Sydney

The hearing in Sydney runs from Monday, September 14 to 22 and will look into the financing and sustainability of future improvements to the aged care system, the appropriate funding model or models to support the delivery of aged care services, and the prudential regulation of aged care providers.

Questions around whether the prudential regulation regime that applies to aged care providers is adequate to ensure the sustainability, stability and transparency of the aged care system will be asked, and what changes, if any, may need to be made to improve the prudential regulation of aged care services.

The hearing will include the perspectives of consumer bodies, aged care providers with different scale and operating models, industry analysts, economists, experts in comparative systems, former and current Treasury officials, lenders, and the regulator.

Former Secretary of the Treasury, Dr Ken Henry, will give evidence about the options for reform of the aged care sector and how these intersect with opportunities to support long term financing.

Leading consumer representatives, Ian Yates of COTA Australia, Paul Versteege of the Combined Pensioners and Superannuants Association NSW and Professor John McCallum of National Seniors Australia, will give evidence about the consumer interest in reform of aged care funding and financing, including how the costs of aged care should be shared across the community.

The commissioners will also hear from Professor Mike Woods, Lead Commissioner in the Productivity Commission's 2011 inquiry, Caring for Older Australians, Mike Callaghan, chair of the Aged Care Financing Authority and chair of the recent Retirement Incomes Review, and leading academics and economists Professor Michael Sherris, Professor John Piggott, Professor Flavio Menezes, Professor Stephen Gray and Professor Henry Cutler.

Professor Kathy Eagar will give evidence about how to structure funding arrangements for the aged care system, and the interaction between funding arrangements and the operation of the aged care system more broadly. Mr James Downie, chief executive of the Independent Hospital Pricing Authority will explain aspects of hospital funding that may hold insights for aged care.

Over the course of the seven day hearing, evidence will be heard about whether the funding available to providers under the current aged care system is properly quantified to support the provision of high quality aged care; and whether, how, and by whom should levels of government subsidies and private fees for aged care services be determined, and what approaches may be appropriate to protect consumer interests and public funds in the absence of effective competition between providers for some services and in some areas.

Due to the COVID-19 pandemic the proceedings can only be followed on the live webcast on the Royal Commission website.

The hearing starts at 10am local time.