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Early in 2010 the Deputy Treasurer commissioned the Productivity Commission to do a far ranging review of Australia's aged care system, drawing on previous inquiries to design a blue print for reforming our obviously struggling aged care system.

It was a mammoth task and the commissioners consulted extensively, received 925 submissions and held public hearings across the country. 487 of the submissions were received initially and another 438 after the release of a draft report.

Click Here to go to the list of submissions where they can be downloaded and read

During this period I worked closely with the Aged Care Crisis Centre (ACC). As we debated, our positions came closer together on most of the important issues. We made separate submissions prior to the release of the draft report. After the draft report I joined the ACC in writing two more submissions. I also wanted to more directly challenge the commissions unquestioning focus on a marketplace which in my view did not meet the necessary conditions for a market to work in aged care. I therefore wrote an additional submission of my own directly challenging the commissioners implementation of the market model.

This web page briefly summarises these submissions and provides links to them.

Submission July 2010 (368)

In this submission I gave my interpretation of the history of the aged care system to show where it had gone wrong, criticised the deficiencies in our current system, and then went on to suggest that the community be involved in and play a critical role in the collection of information, regulation of aged care and in informing prospective residents. I pointed out how this would address the underlying problems in the system and suggested how this might be done.


This submission examines what has gone wrong in the care of the vulnerable aged by looking at the social dynamics and belief patterns adopted by different participants in the system – particularly in nursing homes.

The Aged Care Act of 1997 established corporate competitive marketplace paradigms and commercial managerialism as dominant patterns of thought in aged care. These were prevailing political ideologies. As a consequence inappropriate patterns of thought became legitimate. There have been multiple consequences of this but a number stand out.

      1. The exploitation and misuse of vulnerable senior citizens - wrinkle ranching
      2. Alienation of the work force and groups in the community.
      3. The detachment of the community from their responsibility to the elderly with consequent disengagement and disempowerment.
      4. The creation of oversight processes that hid the sort of information that might have exposed the new system to criticism.

We cannot turn back the clock but we can reduce the adverse consequences of what has happened. This submission proposes two core solutions.

    1. The proper collection and analysis of information about financing, staffing, care and quality of life.
    2. Giving local communities leverage by involving them more closely in nursing home care, in the resolution of complaints, in oversight, and critically in the collection of financial information, staffing information and in measuring standards of care and quality of life.

It is suggested that care of the elderly is primarily a community responsibility and that the community should have a key role in the provision of aged cares services in each region.

It is suggested that the persons responsible for oversight, data collection, complaints resolution, and a number of other support and integrative responsibilities be sited locally in the communities where community and residential care are provided. These processes should be closely tied to the local community.

The employees and a community group would be structured as a local organization. The employees would work with and be jointly responsible to this group. The community group will be in a position to negotiate directly with the providers of care when there are issues they feel should be addressed and the employees would be in a position to monitor the outcome of this.

There would be a strong central representative and independent umbrella group. This would have important responsibilities and functions. Employees would be jointly responsible to this body. A central mentor and supervisor, to whom employees would report, would provide backup. Mentors would visit and supervise to be sure that oversight was appropriate and data collection uniform. The central organization would provide training. It would represent communities in negotiations with other large groups and with government.

Employees would be supported by their mentors as well as by a local community member. They would work closely with this local person who would be in a position to promptly mediate any disputes that arise locally and support the employees in their work with providers.

The central organization would collect information, collate it and make it available. It would report directly to government, to the accreditation agency and back to the communities. It would have an important roll in recommending increased support by the accreditation agency, sanctions, or closure to government. It would represent the community in matters such as the approved provider status of organizations.

Click Here to read the rest of submission number 368

The Aged Care Crisis Centre Submission 20 August 2010 (433)

The Aged Care Crisis Centre (ACC) made a submission on 20th August which I support. It pointed to the growing lack of confidence in the community, advocated mandatory staff/resident ratios, consultation with independent consumer groups, drew attention to the problems inherent in the market model, and pressed for transparency.

Click Here to read submission number 433 from the Aged Care Crisis Centre

The Draft Report

The draft report, released in January 2011, gave a great deal of information about the proposed funding of aged care. It was primarily a provider friendly effort.

The government had refused to release the reviews of the accreditation agency, an important document which many of us would have wanted to comment on. The regulatory recommendations lacked any detail. The community were not being given a fair opportunity to comment on the issues that concerned them.

To make our point I joined with the Aged Care Crisis Centre and we wrote to both the commissioners and the deputy treasurer who commissioned the inquiry asking that the final date be deferred until the accreditation reviews had been released and the commissioners had seen the reviews and properly redrafted the draft report for comment. Others were asked to support our request.

Not surprisingly neither agreed but the point needed to be made.

The letter is included in the ACC submission number 520 below.

The Aged Care Crisis Centre Submission 31st March 2011 (dr520)

I joined with the ACC in writing their response to the draft submission. We were critical of the increased marketization of the sector. We pressed for far more detail about the new proposed Australian Aged Care Regulator, and stressed the need for transparency. This is summarised in our conclusion.


The further privatisation and deregulation of residential aged-care homes heralded in this Draft Report as providing increased choice and diversity, fails to give real protection and security for vulnerable frail, older people. Ensuring that future aged care can be adequately funded is absolutely critical, but this cannot be achieved in isolation from the many issues which affect the quality of care.

Aged Care Crisis believes we have a collective responsibility to protect the welfare of the frail aged, one of the most vulnerable groups in our society. That collective responsibility conflicts with the notion of exposing people at the end of life to the market economy.

The market, as exemplified in the Draft Report, regards vulnerable older people as customers who, in theory, but not in reality, are able to pick and choose from a range of commercial providers. Their unique situation is devalued and their real needs ignored.

Because a market perspective has now become the reality for our community, our sense of responsibility has atrophied. Market models should not drive public policy in this sector. We believe that the welfare of residents should drive public policy.

We call on the Commissioners to give far more attention to the interests of residents and the quality of care they receive.

Click Here to read the rest of submission number dr520 from the Aged Care Crisis Centre

My personal submission March 2011 (dr568)

I wanted to more directly challenge the commissioners and the draft report, by looking at market theory and at examples of market failure. If they wanted a market then what they were doing was hypocritical and I accused them of this. The providers were empowered, but little effort had been made to use market forces to empower consumers or the community, whom I suggested should be the real customers, nor to make the oversight processes work.

I introduced the submission and challenged them in the summary. I followed this with a list of recommended changes which challenged their sincerity in using market forces.


This response to the Draft Report accepts that, while markets create serious problems when used to drive health and aged care, we now have a market. It must be made to work so that the negative consequences are minimised.

The Draft Report does make a number of major and important recommendations.

However, while seeking to make the aged care system more market like it does so on behalf of the providers and not the consumers (residents and families) and customers (the local communities).

Market theory is based on a balance of market power between the seller and the buyers. It is the buyers as a group who hold ultimate power. Their decisions determine whether the seller will prosper, survive or go under. Unless the necessary conditions are met a market will not work. Unless the buyer has market power the market will fail to work for the buyer and society. The argument against a market in decrepitude is that the necessary conditions cannot be met.

If we are to have a market then every effort must be made to meet them. Aged care will only succeed as a market to the extent that the necessary conditions for market theory to operate can be created by restructuring the system. At the moment they are not being met. Resorting to central regulation and oversight has not been effective. There are always conflicts of interest and they are too far from the customer to be effective.

The Draft Report makes no attempt to give the vulnerable consumer or the customer market power. Market forces are structured to encourage understaffing rather than reward well staffed facilities. As a consequence this report lacks conceptual integrity and intellectual honesty.

This is not because the Commissioners are themselves dishonest or are not motivated to care for the elderly. It is because they share a common background and a similar view of the world. These changes are not underpinned by any new thinking, or any new understandings. Reform is directed to patching and rearranging the pieces. This is not real reform.

What was lacking was a Commissioner with very different perspective to act as a devils advocate by challenging, opening up new ideas, and leading discussion that would open up new insights and understanding. This is a "responsive" report as contrasted with the "constructivist" one that was called for.

In my response to the Draft Report I have tried to fill this role of devils advocate by challenging the Commissioners' thinking, and then following the consequences of that to suggest logical changes to what they recommend.

Recommendations: I made recommendations for changing the draft report to make the market work for residents, families and the real customer, the community. This was essentially what I had recommended in my first submission, but I set set it in a market context and showed that it met market theory better than the model proposed in the draft report. The recommendations related to marketplace aspects of the regulating authority, staffing, complaints, data collection, accreditation, transparency, community structures, consumers, leverage, the approved provider process as well as a number of other matters.

Click Here to read my submission number dr568

The Aged Care Crisis Centre Submission 16 May 2011 (dr902)

The Accreditation agency, made a startling submission claiming that it was not a regulator, did not regulate, was closely allied with the providers, had a conflict of interest and did not want to regulate. This required a response and I joined with ACC in writing a response in which we pointed out that the agency had been central to regulation since 1997 and that the community, government and even their own reviews considered them central to regulation. We agreed with their reasons why they should not be regulating, pointing out that they were the reason why accreditation was an ineffective means of regulation. We indicated that the accreditation activities should be restricted to education. We urged that assessment and oversight should be located in the community.

Our arguments were ignored in the final Report. The Accreditation agency was simply moved to the new regulatory body and given sole responsibility for all regulation of standards of care.

The final paragraph of our submission summarises our recommendations.

Finding a way out of a dead end

One of us (submissions 368 and DR568) has suggested that the aged care system should be built around community based structures, responsible for the ongoing collection of information and for supporting their aged members. The information collected would be fed into regulatory, accreditation and policy sections of the system. A central body drawn from these groups would have representation on those administrative sections utilising the data they collect, and on those sections who operate through the community structures.

These suggestions are an attempt to resolve the core issues of independent information collection, community participation, conflict of interest in the collection of information, and transparency.

Maximum transparency can only be expected when those who need to know also control the information. Direct involvement of the community in the regulatory process, and their proximity to providers would stimulate rather than impede innovation.

If the Productivity Commission cannot meet these important objectives in other ways then Aged Care Crisis urges them to give these suggestions careful consideration. Because of its complexity, its variability and the personal issues that arise, the sector is ill suited to a simple top-down structure. We urge the Productivity Commission to move towards a structure that has a major bottom-up component.

Click Here to read submission number dr902 from the Aged Care Crisis Centre

The Final Report

The two volume Final Report from the Inquiry was released in August 2011.

Click Here to go to the web page and download the final report

A Critique of the Report

The report cannot be faulted on the diligence with which the commissioners studied all of the material and commented on it, although inevitably they focused on those issues that fitted into their market focused solution. They all come from sectors that embraced the universal applicability of a competitive corporate market.

There is a lot that is good in this report, particularly the recommendations that focus on care at home and on keeping people out of nursing homes. The market solution is sold to us by making a great play on choice and so offering a greater diversity of services to the frail elderly. The commission did take account of and quoted frequently from the submissions including the ACC and my own submissions. They attempt to address them from within the framework of the more free market solution they propose.

This is nevertheless all about creating a market and finding the money it needs. The family home is to be raided, to release the cash for the customer to use, even though fairer options are available. Choice is more about offering the market opportunities to make more money by providing services, than actually meeting the diverse and varied needs of the elderly. How meeting both diverse needs and commercial opportunity will align remains to be see. There is likely to be room for plenty of abuse.

The greater emphasis on objective data and on transparency is welcomed if this actually eventuates. The new system is not properly structured to provide this. There is no method of ensuring or monitoring it. The problem of vulnerable frail seniors, particularly those in nursing homes and those with dementia, in this free market remain. The solutions will work better for home care rather than nursing home care, where the elderly are more vulnerable.

The recommendations do seek to empower the frail aged customer by providing better and more accessible information, but I think the prospect of this making a significant impact on the disparity in power is small. The recommendation to introduce a visitors scheme will do more in this regard, but the recommendation is so sketchy that it is far from clear how much power and influence this will have.

My major criticisms of this report are

    1. The manner in which the infallibility of the free market is assumed. It is simply asserted and the commissioners set out to make aged care more market-like.
    2. The failure to properly address the imbalance in power between provider and consumer. They meet this criticism by providing more information and assuming that the frail aged can use it. While they focus on providing services locally in communities they carefully avoided empowering the community.
    3. Their focus on removing burdensome regulation effectively emasculates the regulation of standards of care. The failed accreditation agency is simply to be ported to the new regulator, be told to collect objective data and is made responsible for all regulation. This is no better if not worse than we had before
    4. All of the regulation is positioned in a single administrative if independent structure which is also responsible for advising on funding, collecting information, and disseminating that information to consumers and the community. It is far from clear how managers will be selected. There is no oversight or control over what they do. This is a recipe for a lack of transparency and for control over information that would impact negatively on the aged care system or reveal deficiencies in the new regulator.

I have written a long critique of the report. I start this by developing a theoretical basis for examining the report from an understanding of how patterns of thinking influence what we do. I put this into a separate documents but with a summary in the critique.

I then go on to show how the patterns of thinking used by the commissioners are asserted but not discussed or challenged, how the recommendation they make flow on from these understandings, and how as a consequence important considerations are ignored or discounted. This is a critique rather than a criticism. These are good men and women who worked hard and produced an impressive but deeply flawed report. This is because the commissioners were all drawn from the same establishment group and was not broadly based. They needed a devil's advocate to challenge their beliefs, and force them to confront unpalatable truths.

The Commissioners have carried out a diligent and thorough examination of aged care in Australia and have carefully studied a vast amount of information and hundreds of submissions with great care.

Their report is detailed and thorough in addressing these issues and makes a large number of important and useful recommendations that will improve the system.

The Report is created within the economic rationalist system of belief and the many assertions made in regard to the self evident validity of these beliefs are not supported with evidence or reasoned arguments. The criticism that the necessary conditions for a competitive market to succeed are not present is not addressed. The validity of a market is simply asserted.

These patterns of thought directly contradict traditional community humanitarian values and norms; the patterns of thinking and the expectations of the community who expect something very different.

Providers of care must appear to provide the sort of care that the community expects, while serving a very different and demanding master - the market.

There is consequently a deeply divisive fissure running through the new structure that the commission is recommending. It is likely to give rise to tensions, disturbances and undesirable practices

The commission has given total control of the system to a single independent structure the Australian Aged Care Commission (AACC). This body will advise government, set prices, approve providers, assist them in setting up processes, provide oversight, regulate, penalize, handle complaints, gather information, disseminate information and advise potential customers.

It is far from clear to whom the system will be accountable or how its officers will be selected or appointed. This is critically important as they will have total control over the aged care system, and of all of the information that comes out of it.

While accountability and transparency is stressed in the Report, the extent of the control exerted belies this. It is designed to protect the new aged care system and the AACC from the sort of criticism and exposure of recurrent failures that has dogged the present system.

These issues and their consequences are explored in this critique.

To set the stage for an examination of the report from an alternate point of view I wrote an introduction introducing the concepts and the ideas I used to examine the report. Many would be familiar with these concepts so I put them into a separate document titled "A Basis for Criticism" and then summarised this in short bullet form in the introduction to the Critique. This summary should be sufficient for those to whom these ideas are familiar, but available for anyone wanting to explore the ideas further.

Click Here for the introduction "A Basis for Criticism" (for those wanting to explore these)

Click Here for the critique of the Final Report (pdf file) "Caring for Older Australians" (which summarises the above)

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This page created Oct 2011 by Michael Wynne