Aged care financing is a vexed problem for the Australian government. It is already underfunded for the quality the community expects, and costs will increase dramatically. There are also significant concerns about the complexity of the system.

In 2021–22 the federal government spent A$25 billion on aged services for around 1.2 million people aged 65 and over. Around 60% went to residential care (190,000 people) and one-third to home care (one million people).

The final report from the government’s Aged Care Taskforce, which has been reviewing funding options, estimates the number of people who will need services is likely to grow to more than two million over the next 20 years. Costs are therefore likely to more than double.

The taskforce has considered what aged care services are reasonable and necessary and made recommendations to the government about how they can be paid for. This includes getting aged care users to pay for more of their care.

But rather than recommending an alternative financing arrangement that will safeguard Australians’ aged care services into the future, the taskforce largely recommends tidying up existing arrangements and keeping the status quo.

No Medicare-style levy

The taskforce rejected the aged care royal commission’s recommendation to introduce a levy to meet aged care cost increases. A 1% levy, similar to the Medicare levy, could have raised around $8 billion a year.

The taskforce failed to consider the mix of taxation, personal contributions and social insurance which are commonly used to fund aged care systems internationally. The Japanese system, for example, is financed by long-term insurance paid by those aged 40 and over, plus general taxation and a small copayment.

Instead, the taskforce puts forward a simple, pragmatic argument that older people are becoming wealthier through superannuation, there is a cost of living crisis for younger people and therefore older people should be required to pay more of their aged care costs.

Separating care from other services

In deciding what older people should pay more for, the taskforce divided services into care, everyday living and accommodation.

The taskforce thought the most important services were clinical services (including nursing and allied health) and these should be the main responsibility of government funding. Personal care, including showering and dressing were seen as a middle tier that is likely to attract some co-payment, despite these services often being necessary to maintain independence.

The task force recommended the costs for everyday living (such as food and utilities) and accommodation expenses (such as rent) should increasingly be a personal responsibility.

Making the system fairer

The taskforce thought it was unfair people in residential care were making substantial contributions for their everyday living expenses (about 25%) and those receiving home care weren’t (about 5%). This is, in part, because home care has always had a muddled set of rules about user co-payments.

But the taskforce provided no analysis of accommodation costs (such as utilities and maintenance) people meet at home compared with residential care.

To address the inefficiencies of upfront daily fees for packages, the taskforce recommends means testing co-payments for home care packages and basing them on the actual level of service users receive for everyday support (for food, cleaning, and so on) and to a lesser extent for support to maintain independence.

It is unclear whether clinical and personal care costs and user contributions will be treated the same for residential and home care.

Making residential aged care sustainable

The taskforce was concerned residential care operators were losing $4 per resident day on “hotel” (accommodation services) and everyday living costs.

The taskforce recommends means tested user contributions for room services and everyday living costs be increased.

It also recommends that wealthier older people be given more choice by allowing them to pay more (per resident day) for better amenities. This would allow providers to fully meet the cost of these services.

Effectively, this means daily living charges for residents are too low and inflexible and that fees would go up, although the taskforce was clear that low-income residents should be protected.

Moving from buying to renting rooms

Currently older people who need residential care have a choice of making a refundable up-front payment for their room or to pay rent to offset the loans providers take out to build facilities. Providers raise capital to build aged care facilities through equity or loan financing.

However, the taskforce did not consider the overall efficiency of the private capital market for financing aged care or alternative solutions.

Instead, it recommended capital contributions be streamlined and simplified by phasing out up-front payments and focusing on rental contributions. This echoes the royal commission, which found rent to be a more efficient and less risky method of financing capital for aged care in private capital markets.

It’s likely that in a decade or so, once the new home care arrangements are in place, there will be proportionally fewer older people in residential aged care. Those who do go are likely to be more disabled and have greater care needs. And those with more money will pay more for their accommodation and everyday living arrangements. But they may have more choice too.

Although the federal government has ruled out an aged care levy and changes to assets test on the family home, it has yet to respond to the majority of the recommendations. But given the aged care minister chaired the taskforce, it’s likely to provide a good indication of current thinking.

Hal Swerissen, Emeritus Professor, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Most people with knee osteoarthritis can control their pain and improve their mobility without surgery, according to updated treatment guidelines from the Australian Commission on Safety and Quality in Health Care.

So what is knee osteoarthritis and what are the best ways to manage it?

More than 2 million Australians have osteoarthritis

Osteoarthritis is the most common joint disease, affecting 2.1 million Australians. It costs the economy A$4.3 billion each year.

Osteoarthritis commonly affects the knees, but can also affect the hips, spine, hands and feet. It impacts the whole joint including bone, cartilage, ligaments and muscles.

Most people with osteoarthritis have persistent pain and find it difficult to perform simple daily tasks, such as walking and climbing stairs.

Is it caused by ‘wear and tear’?

Knee osteoarthritis is most likely to affect older people, those who are overweight or obese, and those with previous knee injuries. But contrary to popular belief, knee osteoarthritis is not caused by “wear and tear”.

Research shows the degree of structural wear and tear visible in the knee joint on an X-ray does not correlate with the level of pain or disability a person experiences. Some people have a low degree of structural wear and tear and very bad symptoms, while others have a high degree of structural wear and tear and minimal symptoms. So X-rays are not required to diagnose knee osteoarthritis or guide treatment decisions.

Telling people they have wear and tear can make them worried about their condition and afraid of damaging their joint. It can also encourage them to try invasive and potentially unnecessary treatments such as surgery. We have shown this in people with osteoarthritis, and other common pain conditions such as back and shoulder pain.

This has led to a global call for a change in the way we think and communicate about osteoarthritis.

What’s the best way to manage osteoarthritis?

Non-surgical treatments work well for most people with osteoarthritis, regardless of their age or the severity of their symptoms. These include education and self-management, exercise and physical activity, weight management and nutrition, and certain pain medicines.

Education is important to dispel misconceptions about knee osteoarthritis. This includes information about what osteoarthritis is, how it is diagnosed, its prognosis, and the most effective ways to self-manage symptoms.

Health professionals who use positive and reassuring language can improve people’s knowledge and beliefs about osteoarthritis and its management.

Many people believe that exercise and physical activity will cause further damage to their joint. But it’s safe and can reduce pain and disability. Exercise has fewer side effects than commonly used pain medicines such as paracetamol and anti-inflammatories and can prevent or delay the need for joint replacement surgery in the future.

Many types of exercise are effective for knee osteoarthritis, such as strength training, aerobic exercises like walking or cycling, Yoga and Tai chi. So you can do whatever type of exercise best suits you.

Increasing general physical activity is also important, such as taking more steps throughout the day and reducing sedentary time.

Weight management is important for those who are overweight or obese. Weight loss can reduce knee pain and disability, particularly when combined with exercise. Losing as little as 5–10% of your body weight can be beneficial.

Pain medicines should not replace treatments such as exercise and weight management but can be used alongside these treatments to help manage pain. Recommended medicines include paracetamol and non-steroidal anti-inflammatory drugs.

Opioids are not recommended. The risk of harm outweighs any potential benefits.

What about surgery?

People with knee osteoarthritis commonly undergo two types of surgery: knee arthroscopy and knee replacement.

Knee arthroscopy is a type of keyhole surgery used to remove or repair damaged pieces of bone or cartilage that are thought to cause pain.

However, high-quality research has shown arthroscopy is not effective. Arthroscopy should therefore not be used in the management of knee osteoarthritis.

Joint replacement involves replacing the joint surfaces with artificial parts. In 2021–22, 53,500 Australians had a knee replacement for their osteoarthritis.

Joint replacement is often seen as being inevitable and “necessary”. But most people can effectively manage their symptoms through exercise, physical activity and weight management.

The new guidelines (known as “care standard”) recommend joint replacement surgery only be considered for those with severe symptoms who have already tried non-surgical treatments.

I have knee osteoarthritis. What should I do?

The care standard links to free evidence-based resources to support people with osteoarthritis. These include:

• education, such as a decision aid and four-week online course
• self-directed online exercise and yoga programs
• weight management support
• pain management strategies, such as MyJointPain and painTRAINER.

If you have osteoarthritis, you can use the care standard to inform discussions with your health-care provider, and to make informed decisions about your care.

Belinda Lawford, Postdoctoral research fellow in physiotherapy, The University of Melbourne; Giovanni E. Ferreira, NHMRC Emerging Leader Research Fellow, Institute of Musculoskeletal Health, University of Sydney; Joshua Zadro, NHMRC Emerging Leader Research Fellow, Sydney Musculoskeletal Health, University of Sydney, and Rana Hinman, Professor in Physiotherapy, The University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.