The Federal Government has promised to fully take over aged care services with a $739 million spending package if the states agree to sign up to its health plan.
Prime Minister Kevin Rudd announced the package today in a move designed to put more pressure on the states and territories to back his health overhaul when they meet at next week’s Council of Australian Governments (COAG) meeting.
Mr Rudd says the $739 million will be used to support the cost of about 5,000 beds as the Government takes full responsibility of all aged care including home and community care.
About $140 million will used to give providers zero real interest rate loans to create 2,500 aged care places and $120 million will be used to fund 286 sub-acute care beds in rural areas.
And $263 million will be spent to improve access to aged care services.
Doctors will also be given incentives to provide services in aged care homes.
“Improving aged care must be an ongoing priority for the Australian Government,” Mr Rudd said. “The truth is aged care has been poorly planned in the past.”
But the money will only flow if the states and territories agree to the Commonwealth’s full health overhaul plan.
Minister for Ageing Justine Elliot says the plan is aimed at taking pressure of public hospitals, as some elderly patients currently wait in hospitals until they are found a place in a nursing home.
She has told AM the plan will stop fragmentation in the aged care system across nursing homes and other residential care services.
“What we’re saying is, we’ll take over full funding and policy responsibility when it comes to aged care so we can create a really seamless transition for people in terms of them actually accessing those aged care services,” she said.
The funds will be allocated over four years.
The aged-care proposal is the latest in a series of announcements in the lead-up to next week’s COAG meeting, where the states and territories will be pressured to lock in on the Commonwealth’s health proposals.
Yesterday Mr Rudd announced $500 million to cut emergency department waiting times to under four hours, but that money is also on the condition of agreement to the full plan.
The Government wants to claw back a third of GST revenue from the states to pay for a 60 per cent funding takeover of public hospitals.
But Victoria and New South Wales are resisting the plan, with Victorian Premier John Brumby last week releasing an alternative 50-50 split for funding hospitals.
New South Wales Premier Kristina Keneally has welcomed the funding for aged care, but remains adamant that NSW will not sign up to the full plan if it disadvantages the state.
“New South Wales wants change but it must be the right change. We won’t sign up to a plan that puts New South Wales taxpayers and New South Wales families in a disadvantaged position,” she said.
“I have been consistently consulting with the unions, with clinicians, academics, consumers, who’ve all attended our working seminar in New South Wales held a few weeks ago on health reform.
“All of these key stakeholders have identified the complexity of what we’re undertaking.”
Opposition health spokesman Peter Dutton has accused the Government of making policy on the run.
“I think when you have these ad hoc policy announcements in the lead up to COAG it doesn’t show that this is a plan that’s been properly thought through,” he told ABC2.
The Government’s full proposal is not only copping criticism from the states and Federal Opposition, with well-known businessman and Reserve Bank board member Roger Corbett also slamming the plan.
The former Woolworths chief executive is the chairman-elect of Kids New South Wales, which runs the Randwick and Westmead children’s hospitals in Sydney.
He has criticised Mr Rudd for not giving a comprehensive explanation of his plan.
And he says the use of local networks to run small groups of hospitals will create more bureaucracy.
“I think the plan and the number of districts that he’s planning to do is quite frankly, entirely wrong,” he told AM.
“You’re going to end up with some districts with half a dozen hospitals with five beds each … which is just ridiculous. ”
But Mr Rudd is not backing down and has told ABC Radio in Bundaberg a federal takeover is necessary to fix the system.
“The key thing you must do is reform the system now by getting rid of duplication, overlap and waste,” he said.
The Campaign for Care of Older Australians has welcolmed the announcement and urged state leaders to support it.