Sector wide impacts of changes to the Aged Care Funding Instrument

13 Aug 2012 publication

The Centre for International Economics was recently commissioned by Leading Age Services Australia to estimate the impact of changes to the Aged Care Funding Instrument (ACFI) that became effective from 1 July 2012. The changes included:

  • a change to the scores in question 3 of the Activities of Daily Living (ADL) domain, to take effect for all new appraisals and reappraisals from 1 July 2012 onwards;
  • a change to the Complex Health Care (CHC) matrix, (to take effect for all new appraisals and reappraisals from 1 July 2012 onwards; and
  • a one-off reduction in the amount paid under the ACFI at all care levels from 1 July 2012, which after indexation is applied from 1 July 2012, meant that ACFI subsidy rates will remain at their 30 June 2012 level for 12 months.

The modelling was based on detailed forecasts undertaken on:

  • the number of residents requiring residential care by age group, trends in annual admissions by age group, the impact of ageing on the number of residents with a particular ACFI score, and expected resident turnover;
  • the consequent number of residents that will be progressively assessed under the post 1 July 2012 funding arrangements;
  • the proportion of those residents that are likely to receive a different score in question three of the Activities of Daily Living (ADL) domain and with respect to the Complex Health Care matrix (CHC); and
  • the size of the change in funding that is attributable to affected residents. The proportion of affected residents and actual scoring outcomes were drawn from a separate survey undertaken by QPS Benchmarking which surveyed 275 facilities across Australia, covering 18 348 residents.

For further information about this report please contact Sarina Fisher, Director Health Economics and Policy in TheCIE’s Sydney office.