CTO response to payment in arrears

Aug 3, 2021

The Community Transport Organisation (CTO) states that a funding model based upon payment in arrears for services delivered, will be detrimental to community transport service delivery. It will be unsustainable for small community based providers and those providers located in rural and remote NSW. If the funding model needs to change to support a new in home aged care system, the CTO encourages the Government to explore a model that reflects the nature of community transport as a social and community service for good, with a combination of fixed and variable costs.

Throughout the past 12 months, there has been a lot of discussion, even outrage about the Australian Government’s inability to deliver care and support based services to the elderly Australians.

During which time, Commonwealth Home Support Programme (CHSP) service provision continues to deliver quality, client centred services to 850,000 Australians at the approximate cost of $2,800 per person each year, totalling approximately $2.5 billion.

The recent conversation between the Government and the media paints the aged care sector as needing complete reform. The age care sector is made up of three complete and very separate forms of service delivery, two of which are buckling under many pressures, however the CHSP sector is not.

Bulk funded to deliver services to as many people as possible, the CHSP service provision model is working. CHSP is the stand out model for delivering in home care to elderly and vulnerable people within Australia.

Focus change where it is most needed

Community transport providers find themselves, amidst speculation and uncertainty because the Government perceives the whole age care sector to require re-structuring.

There has been continual change within this sector for the past decade. Changing the system without a defined and articulated goal is a waste of taxpayer’s money.

The CTO is working on the assumption that transitioning to an arrears-based funding model will ensure that the administration of the whole new-in-home aged care model (budget based and grant based) will be remitted in the same way, therefore achieving administrative consistency for the Government.

The cost of administrative consistency is too high for community transport.

Developing a Solid and Accountable Funding Model

The CTO believes that until there is a scientific basis for the nexus between the unit costing and projected outputs (trips) that is socio-economic and demographically relevant – the discussion about transitioning to an arrears based funding model is not community supportive. It simply causes anxiety and promotes outrage that is not helpful for the conversation.

In order to achieve an accountable system, the foundations of the system must be built upon a place based approach. The model must be achievable, scalable and sustainable. Accountability cannot be achieved by simply changing the whole funding model – one size does not fit all.

It is the CTO’s position that an arrears based funding model, implemented within the community transport sector, as outlined in the document ‘Commonwealth Home Support Programme (CHSP) – Payment in Arrears and Unit Pricing Fact Sheet’ would result in a contracted, non-responsive and inflexible service. An arrears based funding model creates an incentive to prioritise short, easy transport, over long haul, complex transport for socially isolated communities.

Community transport is a service that has very high fixed costs. Not just a vehicular fleet but a highly trained and heavily regulated and safe work force. Community transport can not simply be turned off and on to meet a volatile market.

Working within the wellness and reablement service delivery model means that community transport needs to be able to offer maximum flexibility and responsiveness to consumer needs. The service needs to be able and ready to surge and contract to meet changing conditions and client specific needs.

The proposed model will ensure providers, who want to stay in business, will need to focus on ‘trip’ numbers and not on social service outcomes.

Community transport is a Quality of Life Service: Funding Complex Social Policy.

Social isolation is the most systemic social problem facing elderly Australians. Community transport is exceptional at meeting the needs of the most vulnerable community members.

Elderly, frail, disadvantaged, socially isolated and those isolated by distance, need transport equity to be able to engage in their social, medical, commercial and civic lives. The current funding model measures this work against an output called a ‘trip’. This work is much more than a ‘trip’. Every transport is different. Clients are individuals, with different needs, physical, social, emotional and financial. Trips take different amounts of time and often require different levels of service. Bulk funding has allowed community transport to balance the cost of service delivery across the diversity of client needs to achieve the individually responsive and place based service that is required.

Currently the cost of a long haul trip or a trip that will take additional time due to a client’s individual circumstance, is simply reflected in a providers’ inability to meet outdated output numbers. To flip this and require a provider to invoice the true cost of these services (within a potentially complex tiered system) may see the cost of community transport service delivery surpass current budget allocations.

One of the costs of moving to a strictly variable funding model is loss of certainty. The CTO has a major concern that workforce casualisation will be a result of providers chasing scalability and sustainability.

The sector saw workforce casualisation as a result of the introduction of the Home Care Package Program (HCP) funding model. Providers trying to respond to volatile client numbers introduced higher rates of casualisation to mitigate the surge and contract nature of the industry. To see casualisation permeate community transport in any major way would risk, quality, safety and compliance standards.

A future funding model needs to recognise the nature of community transport as a delivery mechanism for social policy. There are fixed costs involved in having a service ready and able to provide a transport solution. There are variable costs related to direct service provision. A funding model must recognise these two fundamental elements of community transport as it is delivered in place.

A New Funding Model: An Opportunity to Build a System that Promotes Wellness.

Certainty of funding ensures continuity of service. The CTO urges the Government;

  • To build a funding model that encourages providers to prioritise community service outcomes over commercial outcomes.
  • To seek accountability against the wellness model of service delivery, not against outdated output numbers.

The CTO encourages the Government to take this opportunity to break the link between funding and output, and instead aspire to a quality of life outcome.

The CTO encourages the Government to explore a variable plus fixed cost approach. A new funding model, if required, needs to recognise place as well as complexity of service. It needs to encourage the best in quality and individual care to support our ageing population to remain independent, connected and living at home. We can afford to be aspirational in our approach. The CTO encourages you to not limit our providers, instead, inspire and incentivise for desired outcome.

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