Senate Community Affairs Legislation Committee, , 3:27:22 to 5:00:05
Senators question the implementation of price caps for home care services and the processing of hardship applications for vulnerable participants.
Topics: Health, Social services
Speakers: Hon Anne Ruston, Prof Michael Pervan, Sonja Stewart, Blair Comley PSM, Susan Trainor, David Pocock, Dorinda Cox, Erika Barnett, Greg Pugh, Jasmine Snow
>> Thanks.
>> Thank you, Senator PCO. Senator Ruston, thank you very much. Do we have Prof. Ferven on? >> Hey, how are you?
>> I'm very well, thank you.
>> Good, good, good, good. Um, just a few questions around your um price cap work. Just wondering um have has there been any um start of the stage implementation of price caps yet?
>> Um thank you, Senator. The uh implementation of price caps is a matter for the department. We provided um some pricing advice on the 27th of November to inform the development of price caps. My understanding is they are still working through the policy issues around that implementation. So as far as I'm aware, there are no price caps in implementation um as yet.
>> Okay. Well, I will not address you on those and save them for the department. Um, so so you do um data collection?
>> Yes, we do.
>> So when is your latest data collection report when was your latest data collection report released?
>> Oh, released. Um if you'll give me just a moment, I will check on that for you. Um we have submitted um a uh a cost collection report on uh forgive me Senator on residential care or on support at home.
while you're looking for that. Can I just quickly check um uh Mr. Comley. Um your officials agreed to confirm what the average wait time is now for um getting home care packages after assessment. Just wondering if anyone had
>> Senator, I can confirm that following approval by the pricing authority, a supported home um cost collection report was provided to our minister for approval to publish on the 27th of November last year.
>> So the 27th of November. Um and what what report was that one? That was the
support at home. Um, uh, let me just get the title correct. >> Yes, that was the, um, supported home costing study for, uh, 2025.
>> 2025. When was the 2024 one released or didn't you do anything in 24?
>> I don't believe we've released one in 24, but I can check that and get that answer to you before the end of the day.
>> Okay. So the 2025 um when was that report due to be released? The the one that you provided to the minister on the 27th of November.
>> Uh there's no specific release date as part of the um letter of expectations that the minister provides to us. The matter is now at his discretion.
>> Okay. I'm sorry I've just gone and got some be two seconds. Did you have that number?
>> Uh yes. So I can confirm it is that average interval of nine months we
>> Nine months average >> across all >> across all. >> Okay, no worries. And thank you. Um in terms of the the the um this report when is it expected that the data that's contained in this report will be um used in terms of informing the sector. What is your expectation of when it's to be used?
So it is already being used and in fact we were using that data that was provided in the final cost report as part of our November advice to the minister and the department to inform the development of price caps. Uh and Senator, one of my colleagues has just reminded me that we published the previous supported home costing study that was the 2023 study in May of 2024.
May 204 and the 20 25
>> costing study and the 25 report is with the minister now.
>> Yeah. Um just in like I understand you only can do the work that you can do but so are you relying on cost data from home care packages to inform your support at home data >> or to inform support at home?
>> Yes. But not just um home care packages. We also cross reference um with uh other data that the department provides and of course you know we will reference uh Stuart Brown reports and other documents other sources that we can just to get um relativity checks uh so that we can have a higher level of confidence in our own cost studies.
>> Yeah. I mean I think that the thing that sort of and it's sort of the chicken and the egg or the cart before the horse or whatever you analogy you want to provide but there are significant changes in support at home as opposed to home care particularly in terms of the um the consumer interaction and consumer costing costs that are that are embedded in the model. Um, I sort of been keen to understand how you've informed yourself in terms of the the recommendations you've made around understanding how consumer behavior is likely to change and how you can adjust what you're doing to actually try and understand or reflect what that consumer behavioral change might look like.
>> Thank you, Senator. That's a really excellent question and it is an issue that we consider a lot and talk about a lot. Um so all we can do at this point is collect that cost data >> and track the movements within it. Uh, of course with um policy changes around co-contributions and price caps, there will be um change in the market and all we can do is monitor that >> uh and make sure that uh as far as all sources of data can support the work that we do. Make sure that the price recommendations we make to the minister reflect the costs of the delivery of the service. There may come a time when policy changes take us beyond just pure costs of service um to other issues. They could be almost anything but certainly we are always um looking at issues around uh location um adjustment for indigenous services or indigenous specialist services and so on. So at the moment uh we're not preempting anything. We're not trying to uh forecast what the market is going to do in response to the policy changes. We're just collecting the data and observing them. One of the advantages that we have with age care um when you compare it to our work in hospitals is that the data that we are looking at for hospital services is two years old. >> We then um project forward using an indexation method to get a current price. whereas we're able to get much more current data in the age care support at home and residential age care costing studies. So we we are very close to keeping up where market behavior is going.
>> Yeah, sure. Um look, many of my questions are probably go to the department because you know you've done your piece of the work. It's up to the department and then the minister to interpret how to use it. But um one of the things that we've been hearing though is that there is a sort of a concern from providers that um they don't really have the well or they haven't got the information necessarily that is allowing them to have any great confidence um in terms of the their viability and profitability going into the the future. whether that's because of them not having certainty or whether that's because they're concerned about um some of the prices that they're seeing. Is that something that you've been seeing at all?
>> Uh we haven't been observing it, but we have had that feedback. >> Yeah. Uh one of the the challenges for Ihackin providing advice is that um the the whole model underlying the advice that we provide calls for a costbased price or costbased pricing and and um margin uh return on investment all of those wonderful things. Investability is a word that's used a lot at the moment um doesn't appear in the costs of delivering a service. So in terms of their um their viability which is once again got different definitions uh from ASICH uh these are are issues slightly beyond our brief but I know that the department is also listening carefully to those messages from the sector and are actually doing work around that at the moment and and consulting with us and engaging with us in a very collaborative way
>> in um in developing your recommendations in relation to the pricing for price caps. What evidence is there um to suggest that price caps actually have a cost containment mechanism to them as opposed to just turning the cost cap into the the floor pricing. Everyone just moves straight to the to the cost cap and the that you sort of take all competition out of the market. And whilst you may stop the rogue outliers that are above the cost cap that you actually in effect are putting a price into the market that everyone moves to. What what work did you do around determining that? And in your experience obviously this is your area of expertise. What what is your experience or view in relation to the um the resulting impact of cost caps when it comes to cost containment?
So the um the experience is varied uh not only within Australia but internationally around the effectiveness of cost caps but what it comes down to is how you structure the signal to the market. So if you um for instance if you brought out a cost cap which was just a single digit or a single number um that has a tendency to become a new floor very quickly. If however you signal a range of of figures um and and give if you like a a cost cap bracket that sends a different signal and if you accompany that with the right messages to the market then that will have a different impact. It also depends on the nature of service um and what you're including in the price. So we we did provide some pretty comprehensive advice to the department around how you would implement price caps or um uh cost growth limitation numbers. Uh there's all sorts of ways you could describe it and I'm aware that the department's currently considering that advice with regard to how they'll proceed on the issue of price caps.
>> Yeah. Yeah. Yeah, cuz there sort of So, have you do you see any difference between in your experience around price caps that are um I mean I assume that most price caps are are government sort of initiated price caps. You don't see price caps in other areas of the the
>> They're almost entirely in government.
Yes. >> Yeah. Okay. All right. Well, I might move to the department and just ask a a couple of questions in relation to um to price caps and where where everything's at in terms of advising the um the sector around um this information and perhaps most pertinently to go to the point um around the concern of the impact of the uncertainty on the sector.
>> Yeah. So um government set price caps for the support at home uh services are going to apply from the 1st of July 2026 and as um u Mr. Pavan has said um uh he his organization has provided advice to government and that will be a decision um for government about those caps as an input into it. Um you know we would be well aware of the need for consultation. It's a really important uh uh consumer protection mechanism and uh you know we would uh be mindful of the need to uh communicate when that decision is made and to ensure good implementation uh for
>> So you're on track to meet your requirements for the implementation of price caps by the first of July 2026.
>> Yes. So we have a plan in place um to meet that commitment that government has made. Yeah.
>> No, that wasn't my question. My question is are you on track to implement it? You may have a plan but is your plan on
track? >> Sorry, my apologies Senator >> It is I feel that we are on track to enable government to make that
commitment. so equally um has the government taken into or sorry has the department provided advice or in terms of your deliberations taken into account the fact that um there is a potential for caps to become effective floors and so have you done um any analysis around what the likely cost impact is going to be of this? I mean clearly we're putting price caps in for a purpose of savings. what sort of savings and how has that been determined in relation to why you are seeking to put price caps into a
>> Yeah. So I the way that I consider the price caps is more around consumer uh protection uh rather than a a savings mechanism but I'll get my colleagues to talk about that further.
>> Probably just to supplement by saying these are all considerations that are forming part of our advice to government. There's not much more I can go into other than that. Sorry. Can I
make another observation, Senator? And it it not only cuts across this area, it also cuts across, for example, disability where you have individual There's a very significant interaction between whether price caps are likely to lead to everyone going to that and how you construct the underlying funding packages. If individuals who receive packages have an incentive to shop around, then it's more likely that the price cap doesn't become uniform across the across the basis. If, for example, people have funding packages with significant underutilized funding, then it is much more likely you will end up at the price caps. So in in both this area and disability you have to think about the interaction of what you are funding individuals with packages and the way the market is regulated and the two have to go hand in hand.
>> Absolutely totally agree with you. I'm just understanding how you've managed that process in terms of your understanding because um everything sounds good as a headline but as you well know it's about what sits underneath it that that makes a difference. Um, so we're hearing from providers regularly that they have had no information on the implementation of price caps which are only 4 and a half months away. So I'm just am keen to understand whether um you've had the same feedback or are they only talking
So the feedback that I'm aware of is that we are going through such fundamental change with the brand new program and a legislative basis and brand new systems. Uh and um so I'm not I have not heard directly uh around um a concern around this um given the stage of implementation. Mr. Pew, I'm not sure you've got anything further to add.
>> Uh just to um to supplement both Mr. Comley and Miss Stewart. Uh we have heard um from uh some elements of the sector that think that the implementation of price caps 8 months into the program is too soon and we should let the the market mature. But then on the other hand, we've got our um very important consumer advocates and Mu spoke about the consumer protection angle previously. So it's a matter of being able to balance those um those views along with the um you know economic realities of what the price caps will or or may not do and all of that forms um holistic piece of advice to government.
I'll look forward to seeing you at estimates in May to see how it's all going. Um, so just has have you been able to put together anything to try and let me understand whether the funding that was included in the myo 245 in the 83,000 packages.
>> so we do um m Mr. Q has it to read out, but if you just give us five minutes,
No, that's fine. I'm I'm happy to leave it until um I get the hard copy. That's really cool. Um so just just some quick ones here in relation to participant drop off and hardship applications. That's you guys. No, different people.
>> That was uh services Australia had answered some questions yesterday and um about hardship applications, but you'll be able to.
>> So you can't answer for me.
>> No, no, I wasn't just saying that. I was just saying
this model
>> services Australia deal hardship applications. Um but we please answer please ask a question and we can see what we can answer.
>> Sure. I was just wondering um how many people have declined a supported home package after they've been approved to
>> Uh Senator, that's not something that we have any information on. Um understand services Australia provided advice last night at their appearance um in in in the finance committee um about the number of applications and the the approval rates. We don't have any information about how that translates across to people who may or may not accept a package.
>> So you don't know how many people have ce ceased to supported home service since the 1st of November 2025?
We we don't have any information about who's who's exited the pro who's exited the program um for all the reasons where they have but noting that it could be about um a range of factors including entering residential aged care or or or a range of other reasons.
>> So you don't seek to understand that.
>> Uh we wouldn't ordinarily ask a person the reason that they've left the program. No.
>> Okay. But wouldn't that be fundamental in informing you if the program was
>> We haven't passed away, >> Senator. It's definitely information we will collect. We just don't have a hand at this point in time.
>> Okay. We I'm happy if you take it on notice. That's absolutely fine. Um and and equally, I can chuck the same questions on notice to Services Australia. I just thought you guys would be across the details of particularly because we're talking about the implementation of a new program. I thought you'd have been very very close to that information. Um so happy for you to take that on on notice. Um and then the same thing goes for you know the hardship applications. You know how many have been lodged? How many have been approved? How many have been declined? Is that also information you don't have? >> I'm talking about since the support at home sort of trying to draw a line
there. I I mean I understand services Australia answered substantially similar questions. I could provide again what they um provided under questions yesterday which was that um uh in November they reported that that hearing 1,326 claims in November um 1,272 claims in the month of December. they they noted that they they have taken on notice through a different committee um for more recent data um and that they noted that in the month of December 68.4% of finalized claims were approved
>> 68.4% claimed >> approved. Okay. So how does that compare to um the volume of hardship claims that were lodged like in in months pre prior to that on support at home? Uh again,
Senator, I'm um quoting what Services Australia said last night um which was that it was an increase. They were sort of running at 500 to 800 applications a month.
>> Okay. So, we're talking about somewhere close to double the amount of hardship applications in that period of time.
>> That that's based on what services.
>> I'm just interested that you don't you know you Yes, sure. I could have gone and asked Services Australia, but this is the inquir the hearing the estimates hearing into age care. Um, I just find it really surprising that in the implementation of a new program that these kinds of pieces of information aren't actually fundamental to informing you about the roll out of your program. >> yeah. Anyway, um,
>> can I just clarify um, you know, that hardship is an um, is a matter that we are considering. I think what we're doing is doing our best to answer in terms of the the the budget estimates ahead of us. So um if we have um not dealt with that question in the right way but um you know we do speak to our services Australia's colleagues um regularly uh we worked with them and older people advocates around streamlining the process and improving the process which was direct feedback from older people around getting that ready for that implementation and we we do talk to them about that because they are a very key service delivery partner. It was more about the specifics um of that activity given that is not something that we uh are funded or in our budget to do.
>> But we are very interested in it for the reasons I think you're alluding to Senator because >> the hardship program was always put as a safety valve and so it is very use it is very important to understand how often is the safety valve used because then that's >> puts light back on >> the underlying design. So we are genuinely interested that question. It's obviously still early days and we we will look at it closely.
>> Yeah. So at the moment do Service Australia provided you advice as to what the average wait time that is between somebody lodging a request for a hardship application and them receiving it.
>> So they I think they target the performance measure is 28 days and I'm advised by my peer that they are getting um that average to 22 calendar days. So um below the performance measure.
>> Yeah. So do you do you have any idea of how many applicants just completely exit care in that period of time because they
>> I think as Miss um Trainer has said that is one um category of exit that we aren't reporting.
>> I'm sorry I didn't hear what you said.
>> We we don't have um that sort of uh we're not sort of able to join up different pieces of data in that way at this point in time. Um so so no we're not able to provide that at this time.
>> Okay. Hey um are you planning to do a review of the implementation of support at home? Um I mean obviously there are statutory requirements in relation to reviews etc. But I mean what is your process of reviewing the implementation of the program?
>> I'll just ask my colleagues to come up. there is a planned review of support at
Uh Senator Erikica Bett, acting assistant secretary reform implementation division can give you some information on that in just a second. Uh so there's a range of evaluation activities happening across the department to look at the new age care act and supported home. Uh we just recently commenced the supported home and single assessment system evaluation uh piece. We contracted now group on the 3rd of October 2025. Uh they have been on boarded now and they started their work on the 4th of December. Uh their scope includes designing the evaluation. uh they have a report due to us before the end of the calendar year and there will be further work going out uh to October 2027.
>> Okay. And so I'm assuming the review undertakes the sort of the um analysis of the everyday living independence and um and um clinical care services.
>> Uh so it's looking at a range of different things. So equity, access, everything aligned to the benefits claimed to do with support at home. So we would be looking at uh the service uptake for different people. uh things like you've just been discussing there around hardship applications um providers and how they've um experienced uh the transition and how their businesses are operating. Um we're also looking at the implementation itself and how that went uh to inform lessons learned for future stages.
>> Have you got that piece of paper yet or would you like me to keep going on my next load of questions?
>> I think they're trying to find a print somewhere somewhere. Sorry, but um sorry about that. Hopefully won't be long.
Y um okay. Um, one of the things that we have um heard frequently from providers is that in the interim period where people are only receiving the 60% of their package um that they're finding that they're spending an inordinate amount of time administering the the 60% piece of it because they're having to try and work out what they're not going to be providing that they will be providing into the future. So um have you I mean I know the feedback that we've received but what's the feedback that you've received about the additional ads that are being required to administer 60% packages on providers.
>> So we've re received some general feedback that mirrors what you've just outlined Senator about some of the complexities about the 60% and and the care management piece that sits there. To my knowledge, we haven't been provided any specifics about this cost. It's taking us an extra x amount of hours to do.
>> Okay. But you have received the same sort of feedback that we have about the extra >> That's right. >> complexity. So in terms of that extra complexity, who is ultimately wearing the the burden of that additional cost? Because if you are putting a burden of additional administration onto a provider um they either charge the client for it or the provider accepts the burden. It's
I I haven't had it put to me that it's a burden. We has
>> extra hours as there is a burden in an ex in extra hours whether it be a financial burden a time burden whatever there you know if you are spending longer to do this than you used to do
>> So Senator I probably just build on Miss Snow's point uh it has been feedback that has been received but it hasn't been um in the volume or quantum and supported by any data or evidence. uh that uh would help us make an assessment of that. So we do ask our provider peaks to help inform um that assessment and we do put those questions to some of our advisory councils as well. Um but at this point in time it's not quantifiable around how much of it administrative burden if there is one um that that is taking on but we something that we will look at um as part of uh the evaluation
So I I'll just quote you know a comment that I received that you know by rolling out 60% packages with a claim system that is not attuned to the 60% the government has shifted hundreds of thousands of dollars a week in unfunded administration costs onto age care providers pulling staff and time away from frontline care. a sort of like a just a general comment that would fit into many comments that we have seen. So you know if if you know a operator which obviously have been of some size is spending you know and it's here and I've got one operator who told me they are spending an additional $450,000 a week in administrative burden. Sounds an incredible amount but that's what what are you going to do about that? I mean it seems to me that in a process of unexplained demand that you have said is why the the decision was made to roll 60% not 100% out. Not only have you denied the person their full care that they've been assessed as needing, they're only getting 60% of it. You've then gone and whacked another administrative burden on the people that are providing those services that's taking them away from providing the care. I mean like who has done the analysis on the value proposition of a 60% roll out?
>> So I think um I just wanted to make two comments and my colleagues might go into further details. I think it's important to note that the vast majority of older Australians are not on the interim um packages and that the um and those that are receiving an interim package, the focus of it is to ensure that they're getting um the care earlier than what they other would if they weren't getting that. So, it wasn't about um uh it was it's f it's focused solely on on the older older person, but I think it's important in terms of context that the vast majority of older people are not on interim packages.
>> I think it's also worth um Senator I mean I'm not doubting you've received that representation, but I agree it's we haven't had estimates put to us >> and certainly $450,000 a week. I mean that is the equivalent of having 200 staff permanently engaged on the incremental administrative burden of having people on packages of 60% for an average of 10 weeks. So you know we we are very happy to engage with providers about what the genuine administrative impact is but I think we just have to be very careful about um and I suppose I'm not doubting that someone's made that representation. I find it quite hard to
>> Yeah. I what I might do is I I have the name of the provider. I'm not going to now. I might see if they're happy for me to give it directly to you and you can have a conversation with them because I'm sure you probably can even work out who it is if you're clever enough. Just a couple of things. Um,
>> on that note, I'm sorry. It is now 1:00 and we are going to break for lunch to keep us on track. I do know you have further questions, Senator Ruston. We will return uh back to 3 um at 2 p.m. But I have some good news for those folks out there that are uh sitting waiting um that we can release uh today from the hearing uh the age care quality and safety commission uh in outcome three. uh the uh Independent Health and Age Care Pricing Authority um in outcome three and the National Rural Health Commissioner uh who was due to appear uh later on this evening in outcome one are are all now released. Uh we will return. Sorry.
we asked like during the the the previous questioning this morning about um all of the stuff around support at home but the questions that we had actually put to you earlier um and I outlined in my opening comments we haven't I haven't specifically asked for them in the cor the subsequent questioning but I still did want the answer to them about the packages that were broken down in terms of um you know support levels and the like. Is that a is that information able to be tabled given you had it with you
>> on the return from
>> I just
staff
>> I think officials gave the undertaking that they would work uh very hard to try and get you some of those answers back uh this afternoon. So um we'll check in
>> No, we would we're happy to take questions on those things. I don't think I took the table those documents.
>> Oh, right. That's right. Yes. That you were answering questions in relation to those. Is that the Is that the
>> Well, no. I I the secretary came in and and said that that that you had the information and that you would provide the information in the sections where that particular information was relevant. Um I outlined questions. I mean, I can ask it all again.
>> That's right.
>> Answering your question. I I didn't say we necessarily had it in the form that was prepared to table. We were happy to answer the questions.
>> That was my understanding of Mr. Comley's
>> Well, I can come back and ask you all those questions, but like seriously, if you've got the answers, why don't you
>> I think as Mr. Comley has just stated, it is not in the form for it to be prepared and to be tabled. Um so, uh it's uh there I think officials were and going back to Mr. um response to that was that they were happy to answer questions. So, we will be returning at 2:00 p.m. um uh from the >> Everyone uh the committee is back in