Residential Aged Care in Australia is being handed to big corporations by the Abbott Government.
Private for profit companies like Japara, BUPA, Allity, Regis and Estia are moving in at a rapid rate, backed by Macquarie and other banks to prey on the frail aged's vulnerability.
These companies are attracted to the sector by the Abbott Government's deregulation of funding of the sector towards a user pays system for residents. Residents entering an aged care facility now pay a Refundable Accommodation Deposit (RAD) of up to $550,000 to enter a residential aged care facility. In fact some RADs are as high as $900,000 or more where the owner offers additional services, but not necessarily higher quality care.
So the big corporations moving in to aged care build new facilities or takeover and renovate existing facilities which ,like some hotels, look pretty good on the outside, but in essence are pretty ordinary. The big corporations under current laws are able to use up to 15% of the Refundable Accommodation Deposits to fund capital works but not for wages for staff. When the resident passes away, the balance of the Deposit is returned to the family. However it is the interest gained from the Deposit that is scooped away by the corporations.
The other way they make profit is to maximise the money they can obtain from federal government funding for caring for residents, based on the acuity level of the resident. They engage specialist consultants for this purpose. This federally funded money translates in to an amount per resident per day to pay for staffing hours and staffing mix (registered nurses, enrolled nurses, carers, therapists) and for the cost of food, cleaning and other utilities associated with the quality of care of the resident.
This amount from the federal government can vary from $140 per day per resident to $170 or more per day per resident.
Once the money is authorised by the federal government body, the aged care facility owner is free to use the money how they wish. Cheaper food, non-replacement of staff who are sick, reduced hours on the rosters, infrequent showering of residents to reduce labour hours of staff are just some of the ways that the private for profit owners in the aged care sector make more profit.
Their access to capital funds from banks is possible because they know aged care is a growth industry and that when the private for profit corporations float their companies on the stock exchange, the share price rises rapidly. Japara, Regis and others are recording record increases in the rate of profit.
The not for profit aged care providers such as Uniting Church, Southern Cross and Anglican Church are forced in to a race to the bottom to compete with the private for profits but without the same financial backing of the latter players.
The introduction of the user pays aspect of the system with the Refundable Accommodation Deposits has prompted the not for profits to cut back on staffing level dollars that have traditionally been higher than the dollars provided by the federal government funding.
Now the not for profits use any excess dollars, not for reasonable staffing level, but to upgrade their aged care facilities or build new ones.
(2013 Rockhampton protest against nursing home privatisation)
The losers in all this are residents and staff. Residents are paying more, but staffing hours are being cut across the country. These cuts are being resisted more strongly as aged care workers enter early stages of becoming a well organised sector of the working class. At each stage of their struggle, these workers have two concerns in their mind - the care needs of the residents and their own need of a liveable income. Where they stick together, they are making small gains in clawing back lost hours of work and lost income.However a united campaign of workers across all the unions involved in the sector with community support is needed to defeat the race to the bottom with respect to both resident care and aged care workers pay and conditions.