Minister Tells HFA To Review Aged Care Pricing Model

Minister for Disability Issues Ruth Dyson said today that she had instructed the Health Funding Authority to negotiate its proposed model and assumptions for funding rest homes, dementia care units and continuing care hospitals.

The model, derived from an independent PriceWaterhouse Coopers costing study comissioned by the previous Government, assumes 95 per cent occupancy rates and 45-bed units for aged residential care facilities.

"The way the HFA is applying the model does not bear any strong relationship to reality," Ms Dyson said. "Average occupancy rates for residential care facilities are estimated to be around 87.5 per cent, while average bed numbers are around 30.

"The effect of the new model could be to squeeze out some smaller providers, or force them to merge. It could also encourage rest homes to retain residents when they might be better suited to hospital care."

Ms Dyson said the government was committed to improving the quality of care for senior citizens. She said negotiations between the HFA and service providers were in the early stages, and she would be taking a very close interest in them.

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