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Governance of the aged care system: what is the Federal Government planning?

Introduction by Croakey: In previous articles on plans for new federal aged care legislation, policy analyst Charles Maskell-Knight has documented some worrying gaps between recommendations from the Royal Commission into Aged Care Quality and Safety and what the Government is proposing.

His analysis below suggests the Government is also planning to establish a powerless system governor, and to re-establish the quality regulator in its current form rather than strengthening it as recommended by the Royal Commission.

Croakey readers have until 16 February to provide comments on the exposure draft of the bill for a new Aged Care Act.


Charles Maskell-Knight writes:

This is the third in a series of articles examining the exposure draft of the bill for a new Aged Care Act, released by the Department of Health and Aged Care on 14 December.

A feature of the Royal Commission into Aged Care Quality and Safety is that in several areas the Commissioners were unable to reach agreement on recommendations. (And as there were only two Commissioners, there could not be a majority report and a minority report.)

One of the most significant areas of disagreement was the governance of the aged care system.

The Commissioners agreed that “better system governance is crucial to the reform of aged care [and] requires ongoing guidance and direction, steering the system towards long-term policy outcomes, monitoring performance, addressing emerging issues and holding players in the system accountable for performance” (ACRC report Vol 1, page 82), and they agreed that there should be a “system governor”. However, they disagreed on how this should be achieved.

Commissioner Tony Pagone in recommendation 5 proposed an Australian Aged Care Commission, responsible for system management (including information provision, needs assessment, service commissioning, and funding), provider approval, quality and safety regulation, complaints handling, workforce planning and development, and:

“system governance, including the responsibility of continuously monitoring the performance of the system, informing the responsible Minister and Department about new policy and reform proposals for improvement of the performance of the system, limited authority to make subordinate instruments about the details of arrangements for the administration of funding and service delivery, and the ability to raise and recommend amendments of legislation and delegated legislation to the responsible Minister and Department”.

Commissioner Lynelle Briggs in recommendation 8 proposed a model in which a restructured Department should have a focus on “stewardship of the aged care system” including:

  1. guiding the aged care sector in the delivery of safe and high quality care
  2. building providers’ capacity and where necessary managing the exit of poor performers
  3. fostering innovation and continuous improvement
  4. leadership in support of all Government agencies and aged care and other service providers to ensure that the aged care system as a whole delivers safe and high quality aged care
  5. proactive management of the interface between aged care services, health services, accommodation services, homelessness and disability services and services for those with diverse needs to ensure that barriers to older people receiving fair and equal access to services are removed.

She also recommended that the Department should produce an annual report to Parliament on the operation of the Aged Care Act, including the extent of unmet demand for care and waiting times for care, the adequacy of subsidies for care, amounts paid by people for care, accommodation and daily living needs, and provider compliance with the Act. Every three years (starting this year) the Department should provide a state of the aged care sector to Parliament, setting out aged care system performance and identifying further reforms.

Briggs also recommended (recommendation 10) that the Aged Care Quality and Safety Commission should be restructured as the Aged Care Safety and Quality Authority, with an independent board and a CEO responsible to the board.

In its response to the Royal Commission the Morrison Government supported the Briggs departmental model:

“The Government accepts this recommendation and will establish new institutional governance arrangements to oversee the aged care service system. This will improve transparency for the community and provide enhanced market oversight. Strong, effective and transparent governance arrangements will be implemented to improve quality and safety outcomes for senior Australians, enhance trust in the aged care system, improve integration across care settings, and strengthen leadership and accountability”

and the restructured safety and quality regulator:

“The Government accepts this recommendation… A new independent Aged Care Safety and Quality Authority will be established. This will be informed by the outcomes of the capability review of the Aged Care Quality and Safety Commission.”

Absent any statement from the Albanese Government abjuring this position, I could only assume that it remained government policy.

However, the exposure draft sets out a different policy position, particularly in relation to the regulator.

The system governor

Chapter 5 of the draft covers system governance, and part 2 of the chapter deals with the system governor. It provides that the secretary of the Department is the system governor, and then sets out the functions of the role at subclause 132(1) as including:

(a) facilitating equitable access to funded aged care services…

(b) supporting the continuity of funded aged care services when the delivery of services by a registered provider is disrupted

(c) providing stewardship of the Commonwealth’s administration of the aged care system and encouraging the delivery of high quality care by:

  1. developing policy to make ongoing improvements
  2. promoting the availability of funded aged care services in areas of unmet demand
  3. promoting diversity of registered providers
  4. providing education to build the capacity of registered providers to adopt best practice.

(d) protecting and upholding the integrity of the Commonwealth’s administration of the aged care system and the Commonwealth’s investment in the system, by:

  1. collecting, maintaining and providing accurate information about the Commonwealth’s administration of the aged care system, including on expenditure by registered providers on the delivery of funded aged care services
  2. providing oversight of the Commonwealth’s payments to registered providers, including ensuring compliance with this Act and other relevant requirements.

(e) monitoring and encouraging the training and development of aged care workers

(f) reviewing the Commonwealth’s administration of the aged care system, or a part of that system, including undertaking research, evaluation and analysis…

But despite these broad-ranging functions, the system governor is given no particular powers to achieve them, other than the powers to administer the Act. Indeed, replace “system governor” with “secretary” throughout the exposure draft, and it sounds very much like the current Act.

The only explicit power conferred on the system governor under chapter 5 is the power to request information or documents from persons. Clause 136 provides that “if the System Governor reasonably believes that a person has information or documents relevant to the System Governor’s functions, the System Governor may request the person to give the System Governor any such information or documents (or copies of any such documents)”.

But the clause goes on to provide that “the person is not required to comply with the request”. So it isn’t a power to obtain information, it is a power to ask nicely. (Clause 279 empowers the system governor to obtain information on a compulsory basis in relation to compliance with the Act.)

Former British PM Stanley Baldwin referred to the press barons of the 1930s as “seeking power without responsibility”. By contrast, the exposure draft confers on the system governor responsibility without power. It is likely to be a thankless task.

Commissioner Briggs’ recommendation about annual reporting by the system governor is reflected in clause 411 of the exposure draft, but the recommendation about a triennial “state of the sector” report has vanished. Perhaps the Government believes that such a report would reveal too many inconvenient truths.

The regulator

The exposure draft establishes the Aged Care Quality and Safety Commission on the same basis as the current Aged Care Quality and Safety Commission Act 2018. (It hasn’t even changed the name to put safety before quality.) The Commission is constituted by the sole Commissioner appointed by the Minister and the staff of the Commission.

The recommendation to re-establish the regulator as an authority with a board and a CEO has fallen by the wayside.

This was not unexpected. The capability review of the existing ACQSC carried out by David Tune AO PSM concluded that:

“There are strong arguments, however, to more effectively and efficiently achieve the objectives expressed by the Royal Commission by retaining the current Commission. This approach involves a less disruptive and more efficient and cost-effective approach by building on the strengths of the current Commission and the work already underway to achieve modern, world class regulation.

“Therefore, I am not convinced that the creation of a new Authority and Board is either necessary or advisable at this time. What is more critical is to successfully implement the changes I have proposed”.

However, Tune went on to recommend that the membership of the Aged Care Quality and Safety Advisory Council (the Advisory Council) should be substantially strengthened and refreshed. He also recommended that the Advisory Council should be given more independence and autonomy to enable proper scrutiny of the Commission, and the opportunity for direct engagement with the Minister.

While Minister Anika Wells did not explicitly accept these recommendations (the only recommendation she accepted was establishing a steering group to advise on prioritising the other recommendations), they have been adopted in the exposure draft.

The functions of the Advisory Council set out in clause 169 have been expanded to include monitoring the performance of the regulator’s functions, providing advice to the Minister directly on matters arising in relation to the performance of the functions, and “identify[ing] systemic performance issues within the Commission and mak[ing] referrals to the Minister if appropriate”. It will have the power to be an effective watchdog, rather than an adviser called on if required.

However, a stronger Advisory Council cannot replace an Authority with a governing board of clinical, professional and community representatives envisaged by Commissioner Briggs.

Comments on the exposure draft are due by 16 February.

• Charles Maskell-Knight PSM was a senior public servant in the Commonwealth Department of Health for over 25 years before retiring in 2021. He worked as a senior adviser to the Aged Care Royal Commission in 2019-20. He is a member of Croakey Health Media, and author of The Zap column.


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