Skip to main content

Home Care - Value for Money?

Home Care - What do you really get for your money and the taxpayers?

Arguably, it's not too difficult to describe the current LNP government's approach to health services, NDIS and Aged Care as a continuing triumph of "form over function". A philosophical conviction that the private sector can provide better and more cost efficient services appears to have just created opportunities for the private sector to divert scarce resources into profits at the expense of efficiency.

It's hard to understand why so much emphasis is being placed on commercialising the care sectors - there is no identifiable increase in efficiency and the only beneficiaries are the intermediaries, who offer questionable value, and commercial care providers.

Let's just look at Home Care as an example, and just see what it deliver given your contribution, management fees and service fees - taking a closer look at Home Care Level 4, which in principle should be the most worthwhile level of care. In principle it provides a significant annual budget of $56,400, or $2169 a fortnight, bearing in mind that there are significant waiting lists attaching to almost all Home Care packages.

Home Care Level 4 Budgets and Your Contribution

Your Budget
Your Contribution
$56,400 per annum
$4,022 to $15,567 per annum * (7% to 27.5%)
$2,169 per fortnight
$154 to $597 per fortnight
* Includes Basic Fee plus - if applicable - the Income Tested Care Fee which is subject to annual and lifetime caps

What your Budget buys?

We selected at random Home Care Level 4 providers in Sydney, Adelaide and Perth and compared their fees - which are required to be published on the Myagedcare website. The Government pursues transparency in pricing and that is partly achieved by greater uniformity, but substantial complexity remains and there remains a lack of definition in certain areas.

For example, price lists differentiate between costs associated with "Care Management" - such as reviewing the Home Care agreement, coordinating activities and HSE matters - from "administration costs" which are included in Package Management. To quote, "Package management is the ongoing organisational activities associated with ensuring the smooth delivery and management of a home care package" - you would have thought this was included in the coordination of activities included in Care Management.

In any event, if you want a fully managed Home Care process, you will need to pay for both Care and Package Management - and that's (very) expensive - see below:

Home Care Budget Items
Cost Per Hour except Management Fees (Fortnightly)

Full Care Management
Package Management
Personal Care - Standard Hourly Cost
Nursing Standard
Nursing Sunday
Nursing Public Holiday
Cleaning & Gardening Standard
$49.50 + 10%

In summary, looking across the three providers, complete management of the delivery of a Home Care 4 package would cost between $17,799.60 and $11,602.50 per annum - 31.6% and 20.6% of the entire care budget respectively.

Now, let's presume that every hour of personal assistance costs $70 - based on a mixture of hours predominantly delivered Monday to Friday 9-5 but requiring some nursing care and some limited assistance on weekends and public holidays. In the worst case above - Sydney - you have a net budget available of $1,484 per fortnight, or about 10 hours of assistance per week. Bearing in mind that the cost of travel to your home is probably included in the hourly cost but "travel time" is debited against your budget, you might be limited to as little as 8 hours of assistance per week.

In Summary

  • Fees vary significantly, be prepared to do some significant comparative research on potential providers
  • Administration cost are still too high The multitude of different providers inherently means duplication without any evidence that the private sector approach is providing better quality or performance. The number of marketing intermediaries dedicated to capturing clients - just Google "Home Care providers" and look at the ads - suggests too much money is finding its way into marketing rather than the delivery of health services.
  • Contemplate, if you are brave and have the background, managing the process yourself

If you want any indication of how well the Government is able or prepared to manage the aged care sector, just look at the pace of the Covid vaccination roll out in residential care - a complete disaster. Contracting out services - which is the approach taken - does not mean there should be an abrogation of responsibility. That is a sure recipe for continuing higher costs and poorer service standards.

If you would like to arrange professional advice in relation to the above matters, please complete the Inquiry form below providing details and you will be contacted accordingly. You will receive a fee quotation in advance of any advice or services being provided.