Hospitals worldwide are short of saline. We can’t just switch to other IV fluids – here’s why

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Last week, the Australian Therapeutic Goods Administration added intravenous (IV) fluids to the growing list of medicines in short supply. The shortage is due to higher-than-expected demand and manufacturing issues.

Two particular IV fluids are affected: saline and compound sodium lactate (also called Hartmann’s solution). Both fluids are made with salts.

There are IV fluids that use other components, such as sugar, rather than salt. But instead of switching patients to those fluids, the government has chosen to approve salt-based solutions by other overseas brands.

So why do IV fluids contain different chemicals? And why can’t they just be interchanged when one runs low?

Pavel Kosolapov/Shutterstock

We can’t just inject water into a vein

Drugs are always injected into veins in a water-based solution. But we can’t do this with pure water, we need to add other chemicals. That’s because of a scientific principle called osmosis.

Osmosis occurs when water moves rapidly in and out of the cells in the blood stream, in response to changes to the concentration of chemicals dissolved in the blood plasma. Think salts, sugars, nutrients, drugs and proteins.

Too high a concentration of chemicals and protein in your blood stream leads it to being in a “hypertonic” state, which causes your blood cells to shrink. Not enough chemicals and proteins in your blood stream causes your blood cells to expand. Just the right amount is called “isotonic”.

Mixing the drug with the right amount of chemicals, via an injection or infusion, ensures the concentration inside the syringe or IV bag remains close to isotonic.

A woman connected to an IV drip looks out a hospital window.
Australia is currently short on two salt-based IV fluids. sirnength88/Shutterstock

What are the different types of IV fluids?

There are a range of IV fluids available to administer drugs. The two most popular are:

  • 0.9% saline, which is an isotonic solution of table salt. This is one of the IV fluids in short supply
  • a 5% solution of the sugar glucose/dextrose. This fluid is not in short supply.

There are also IV fluids that combine both saline and glucose, and IV fluids that have other salts:

  • Ringer’s solution is an IV fluid which has sodium, potassium and calcium salts
  • Plasma-Lyte has different sodium salts, as well as magnesium
  • Hartmann’s solution (compound sodium lactate) contains a range of different salts. It is generally used to treat a condition called metabolic acidosis, where patients have increased acid in their blood stream. This is in short supply.

What if you use the wrong solution?

Some drugs are only stable in specific IV fluids, for instance, only in salt-based IV fluids or only in glucose.

Putting a drug into the wrong IV fluid can potentially cause the drug to “crash out” of the solution, meaning patients won’t get the full dose.

Or it could cause the drug to decompose: not only will it not work, but it could also cause serious side effects.

An example of where a drug can be transformed into something toxic is the cancer chemotherapy drug cisplatin. When administered in saline it is safe, but administration in pure glucose can cause life-threatening damage to a patients’ kidneys.

What can hospitals use instead?

The IV fluids in short supply are saline and Hartmann’s solution. They are provided by three approved Australian suppliers: Baxter Healthcare, B.Braun and Fresenius Kabi.

The government’s solution to this is to approve multiple overseas-registered alternative saline brands, which they are allowed to do under current legislation without it going through the normal Australian quality checks and approval process. They will have received approval in their country of manufacture.

The government is taking this approach because it may not be effective or safe to formulate medicines that are meant to be in saline into different IV fluids. And we don’t have sufficient capacity to manufacture saline IV fluids here in Australia.

The Australian Society of Hospital Pharmacists provides guidance to other health staff about what drugs have to go with which IV fluids in their Australian Injectable Drugs Handbook. If there is a shortage of saline or Hartmann’s solution, and shipments of other overseas brands have not arrived, this guidance can be used to select another appropriate IV fluid.

Why don’t we make it locally?

The current shortage of IV fluids is just another example of the problems Australia faces when it is almost completely reliant on its critical medicines from overseas manufacturers.

Fortunately, we have workarounds to address the current shortage. But Australia is likely to face ongoing shortages, not only for IV fluids but for any medicines that we rely on overseas manufacturers to produce. Shortages like this put Australian lives at risk.

In the past both myself, and others, have called for the federal government to develop or back the development of medicines manufacturing in Australia. This could involve manufacturing off-patent medicines with an emphasis on those medicines most used in Australia.

Not only would this create stable, high technology jobs in Australia, it would also contribute to our economy and make us less susceptible to future global drug supply problems.

Nial Wheate, Professor and Director Academic Excellence, Macquarie University and Shoohb Alassadi, Casual academic, pharmaceutical sciences, University of Sydney

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

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  • With all this bird flu around, how safe are eggs, chicken or milk?

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    Enzo Palombo, Swinburne University of Technology

    Recent outbreaks of bird flu – in US dairy herds, poultry farms in Australia and elsewhere, and isolated cases in humans – have raised the issue of food safety.

    So can the virus transfer from infected farm animals to contaminate milk, meat or eggs? How likely is this?

    And what do we need to think about to minimise our risk when shopping for or preparing food?

    AS Foodstudio/Shutterstock

    How safe is milk?

    Bird flu (or avian influenza) is a bird disease caused by specific types of influenza virus. But the virus can also infect cows. In the US, for instance, to date more than 80 dairy herds in at least nine states have been infected with the H5N1 version of the virus.

    Investigations are under way to confirm how this happened. But we do know infected birds can shed the virus in their saliva, nasal secretions and faeces. So bird flu can potentially contaminate animal-derived food products during processing and manufacturing.

    Indeed, fragments of bird flu genetic material (RNA) were found in cow’s milk from the dairy herds associated with infected US farmers.

    However, the spread of bird flu among cattle, and possibly to humans, is likely to have been caused through contact with contaminated milking equipment, not the milk itself.

    The test used to detect the virus in milk – which uses similar PCR technology to lab-based COVID tests – is also highly sensitive. This means it can detect very low levels of the bird flu RNA. But the test does not distinguish between live or inactivated virus, just that the RNA is present. So from this test alone, we cannot tell if the virus found in milk is infectious (and capable of infecting humans).

    Rows of milk bottles in supermarket fridge
    It’s best to stick with pasteurised milk. Amnixia/Shutterstock

    Does that mean milk is safe to drink and won’t transmit bird flu? Yes and no.

    In Australia, where bird flu has not been reported in dairy cattle, the answer is yes. It is safe to drink milk and milk products made from Australian milk.

    In the US, the answer depends on whether the milk is pasteurised. We know pasteurisation is a common and reliable method of destroying concerning microbes, including influenza virus. Like most viruses, influenza virus (including bird flu virus) is inactivated by heat.

    Although there is little direct research on whether pasteurisation inactivates H5N1 in milk, we can extrapolate from what we know about heat inactivation of H5N1 in chicken and eggs.

    So we can be confident there is no risk of bird flu transmission via pasteurised milk or milk products.

    However, it’s another matter for unpasteurised or “raw” US milk or milk products. A recent study showed mice fed raw milk contaminated with bird flu developed signs of illness. So to be on the safe side, it would be advisable to avoid raw milk products.

    How about chicken?

    Bird flu has caused sporadic outbreaks in wild birds and domestic poultry worldwide, including in Australia. In recent weeks, there have been three reported outbreaks in Victorian poultry farms (two with H7N3 bird flu, one with H7N9). There has been one reported outbreak in Western Australia (H9N2).

    The strains of bird flu identified in the Victorian and Western Australia outbreaks can cause human infection, although these are rare and typically result from close contact with infected live birds or contaminated environments.

    Therefore, the chance of bird flu transmission in chicken meat is remote.

    Nonetheless, it is timely to remind people to handle chicken meat with caution as many dangerous pathogens, such as Salmonella and Campylobacter, can be found on chicken carcasses.

    Always handle chicken meat carefully when shopping, transporting it home and storing it in the kitchen. For instance, make sure no meat juices cross-contaminate other items, consider using a cool bag when transporting meat, and refrigerate or freeze the meat within two hours.

    Avoid washing your chicken before cooking to prevent the spread of disease-causing microbes around the kitchen.

    Finally, cook chicken thoroughly as viruses (including bird flu) cannot survive cooking temperatures.

    Are eggs safe?

    The recent Australian outbreaks have occurred in egg-laying or mixed poultry flocks, so concerns have been raised about bird flu transmission via contaminated chicken eggs.

    Can flu viruses contaminate chicken eggs and potentially spread bird flu? It appears so. A report from 2007 said it was feasible for influenza viruses to enter through the eggshell. This is because influenza virus particles are smaller (100 nanometres) than the pores in eggshells (at least 200 nm).

    So viruses could enter eggs and be protected from cleaning procedures designed to remove microbes from the egg surface.

    Therefore, like the advice about milk and meat, cooking eggs is best.

    The US Food and Drug Administration recommends cooking poultry, eggs and other animal products to the proper temperature and preventing cross-contamination between raw and cooked food.

    In a nutshell

    If you consume pasteurised milk products and thoroughly cook your chicken and eggs, there is nothing to worry about as bird flu is inactivated by heat.

    The real fear is that the virus will evolve into highly pathogenic versions that can be transmitted from human to human.

    That scenario is much more frightening than any potential spread though food.

    Enzo Palombo, Professor of Microbiology, Swinburne University of Technology

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

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  • The BAT-pause!

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    When Cold Weather & The Menopause Battle It Out

    You may know that (moderate, safe) exposure to the cold allows our body to convert our white and yellow fat into the much healthier brown fat—also called brown adipose tissue, or “BAT” to its friends.

    If you didn’t already know that, then well, neither did scientists until about 15 years ago:

    The Changed Metabolic World with Human Brown Adipose Tissue: Therapeutic Visions

    You can read more about it here:

    Cool Temperature Alters Human Fat and Metabolism

    This is important, especially because the white fat that gets converted is the kind that makes up most visceral fat—the kind most associated with all-cause mortality:

    Visceral Belly Fat & How To Lose It ← this is not the same as your subcutaneous fat, the kind that sits directly under your skin and keeps you warm; this is the fat that goes between your organs and of which we should only have a small amount!

    The BAT-pause

    It’s been known (since before the above discovery) that BAT production slows considerably as we get older. Not too shocking—after all, many metabolic functions slow as we get older, so why should fat regulation be any different?

    But! Rodent studies found that this was tied less to age, but to ovarian function: rats who underwent ovariectomies suffered reduced BAT production, regardless of their age.

    Naturally, it’s been difficult to recreate such studies in humans, because it’s difficult to find a large sample of young adults willing to have their ovaries whipped out (or even suppressed chemically) to see how badly their metabolism suffers as a result.

    Nor can an observational study (for example, of people who incidentally have ovaries removed due to ovarian cancer) usefully be undertaken, because then the cancer itself and any additional cancer treatments would be confounding factors.

    Perimenopausal study to the rescue!

    A recent (published last month, at time of writing!) study looked at women around the age of menopause, but specifically in cohorts before and after, measuring BAT metabolism.

    By dividing the participants into groups based on age and menopausal status, and dividing the post-menopausal group into “takes HRT” and “no HRT” groups, and dividing the pre-menopausal group into “normal ovarian function” and “ovarian production of estrogen suppressed to mimic slightly early menopause” groups (there’s a drug for that), and then having groups exposed to warm and cold temperatures, and measuring BAT metabolism in all cases, they were able to find…

    It is about estrogen, not age!

    You can read more about the study here:

    “Good” fat metabolism changes tied to estrogen loss, not necessarily to aging, shows study

    …and the study itself, here:

    Brown adipose tissue metabolism in women is dependent on ovarian status

    What does this mean for men?

    This means nothing directly for (cis) men, sorry.

    But to satisfy your likely curiosity: yes, testosterone does at least moderately suppress BAT metabolism—based on rodent studies, anyway, because again it’s difficult to find enough human volunteers willing to have their testicles removed for science (without there being other confounding variables in play, anyway):

    Testosterone reduces metabolic brown fat activity in male mice

    So, that’s bad per se, but there isn’t much to be done about it, since the rest of your (addressing our male readers here) metabolism runs on testosterone, as do many of your bodily functions, and you would suffer many unwanted effects without it.

    However, as men do typically have notably less body fat in general than women (this is regulated by hormones), the effects of changes in BAT metabolism are rather less pronounced in men (per testosterone level changes) than in women (per estrogen level changes), because there’s less overall fat to convert.

    In summary…

    While menopausal HRT is not necessarily a silver bullet to all metabolic problems, its BAT-maintaining ability is certainly one more thing in its favor.

    See also:

    Dr. Jen Gunter | What You Should Have Been Told About The Menopause Beforehand

    Take care!

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  • The Antidepressant In Your Garden

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    It’s Q&A Day at 10almonds!

    Have a question or a request? You can always hit “reply” to any of our emails, or use the feedback widget at the bottom!

    In cases where we’ve already covered something, we might link to what we wrote before, but will always be happy to revisit any of our topics again in the future too—there’s always more to say!

    As ever: if the question/request can be answered briefly, we’ll do it here in our Q&A Thursday edition. If not, we’ll make a main feature of it shortly afterwards!

    So, no question/request too big or small

    ❝What is Mediterranean diet which book to read?❞

    We did a special edition about the Mediterranean Diet! So that’s a great starting point.

    As to books, there are so many, and we review books about it from time to time, so keep an eye out for our daily “One-Minute Book Review” section. We do highly recommend “How Not To Die”, which is a science-heavy approach to diet-based longevity, and essentially describes the Mediterranean Diet, with some tweaks.

    ❝I’m interested in the benefits of gardening. I read something about how important it is for humans to have a connection with soil, with dirt. That its benefits go way beyond growing food to eat or getting exercise. I’d like to find out more.❞

    You’re quite right! There are bacteria in soil (specifically: Mycobacterium vaccae) that work similarly to antidepressants.

    When something is described as having an effect similar to antidepressants, it’s usually hyperbole. In this case, it’s medicine, and literally works directly on the serotonergic system (as do many, but not all, antidepressants).

    While many antidepressants are selective serotonin uptake inhibitors (i.e., they slow the rate at which your brain loses serotonin), Mycobacterium vaccae increases the rate at which you produce serotonin. So, you feel happier, more relaxed, while also feeling more energized.

    See: Identification of an immune-responsive mesolimbocortical serotonergic system: Potential role in regulation of emotional behavior

    ^this one’s a mouse study, but we’re including it because it covers exactly how it works in the brain, which is something that the ethics board wouldn’t let them do on humans.

    As to how to enjoy its benefits? Gardening! You don’t have to go to the length of eating dirt or anything; so long as you’re not gardening while wearing a biohazard containment suit, you will get “infected” by the friendly bacteria in the soil.

    Want to level up your benefits? Grow your own food, and you’ll get it that way, too (yes, even if you wash and cook it)

    ❝I’d like to read articles on gut health and anxiety❞

    We hope you caught yesterday’s edition of 10almonds, which touched on both of those! Other past editions you might like include:

    We’ll be sure to include more going forward, too!

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  • Women take more antidepressants after divorce than men but that doesn’t mean they’re more depressed
  • Staying Alive – by Dr. Jenny Goodman

    10almonds is reader-supported. We may, at no cost to you, receive a portion of sales if you purchase a product through a link in this article.

    A lot of “healthy long life” books are science-heavy to the point of being quite challenging to read—they become excellent reference sources, but not exactly “curl up in the armchair” books.

    Dr. Goodman writes in a much more reader-friendly fashion, casual yet clear.

    She kicks off with season-specific advice. What does that mean? Basically, our bodies need different things at different times of year, and we face different challenges to good health. We may ignore such at our peril!

    After a chapter for each of the four seasons (assuming a temperate Northern Hemisphere climate), she goes on to cover the seasons of our life. Once again, our bodies need different things at different times in our life, and we again face different challenges to good health!

    There’s plenty of “advice for all seasons”, too. Nutritional dos and don’t, and perennial health hazards to avoid.

    As a caveat, she does also hold some unscientific views that may be skipped over. These range from “plant-based diets aren’t sustainable” to “this detox will get rid of heavy metals”. However, the value contained in the rest of the book is more than sufficient to persuade us to overlook those personal quirks.

    In particular, she offers very good advice on overcoming cravings (and distinguishing them from genuine nutritional cravings), and taking care of our “trillions of tiny companions” (beneficial gut microbiota) without nurturing Candida and other less helpful gut flora and fauna.

    In short, a fine lot of information in a very readable format.

    Order your copy of “Staying Alive” from Amazon today!

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  • When BMI Doesn’t Measure Up

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    When BMI Doesn’t Quite Measure Up

    Last month, we did a “Friday Mythbusters” edition of 10almonds, tackling many of the misconceptions surrounding obesity. Amongst them, we took a brief look at the usefulness (or lack thereof) of the Body Mass Index (BMI) scale of weight-related health for individuals. By popular subscriber request, we’re now going to dive a little deeper into that today!

    The wrong tool for the job

    BMI was developed as a tool to look at large-scale demographic trends, stemming from a population study of white European men, who were for the purpose of the study (the widescale health of the working class in that geographic area in that era), considered a reasonable default demographic.

    In other words: as a system, it’s now being used in a way it was never made for, and the results of that misappropriation of an epidemiological tool for individual health are predictably unhelpful.

    If you want to know yours…

    Here’s the magic formula for calculating your BMI:

    • Metric: divide your weight in kilograms by your height in square meters
    • Imperial: divide your weight in pounds by your height in square inches and then multiply by 703

    “What if my height doesn’t come in square meters or square inches, because it’s a height, not an area?”

    We know. Take your height and square it anyway. If this seems convoluted and arbitrary, yes, it is.

    But!

    While on the one hand it’s convoluted and arbitrary… On the other hand, it’s also a gross oversimplification. So, yay for the worst of both worlds?

    If you don’t want to grab a calculator, here’s a quick online tool to calculate it for you.

    So, how did you score?

    According to the CDC, a BMI score…

    • Under 18.5 is underweight
    • 18.5 to 24.9 is normal
    • 25 to 29.9 is overweight
    • 30 and over is obese

    And, if we’re looking at a representative sample of the population, where the representation is average white European men of working age, that’s not a bad general rule of thumb.

    For the rest of us, not so representative

    BMI is a great and accurate tool as a rule of thumb, except for…

    Women

    An easily forgotten demographic, due to being a mere 51% of the world’s population, women generally have a higher percentage of body fat than men, and this throws out BMI’s usefulness.

    If pregnant or nursing

    A much higher body weight and body fat percentage—note that these are two things, not one. Some of the extra weight will be fat to nourish the baby; some will be water weight, and if pregnant, some will be the baby (or babies!). BMI neither knows nor cares about any of these things. And, this is a big deal, because BMI gets used by healthcare providers to judge health risks and guide medical advice.

    People under the age of 16 or over the age of 65

    Not only do people below and above those ages (respectively) tend to be shorter—which throws out the calculations and mean health risks may increase before the BMI qualifies as overweight—but also:

    • BMI under 23 in people over the age of 65 is associated with a higher health risk
    • A meta-analysis showed that a BMI of 27 was the best in terms of decreased mortality risk for the over-65 age group

    This obviously flies in the face of conventional standards regards BMI—as you’ll recall from the BMI brackets we listed above.

    Read the science: BMI and all-cause mortality in older adults: a meta-analysis

    Athletic people

    A demographic often described in scientific literature as “athletes”, but that can be misleading. When we say “athletes”, what comes to mind? Probably Olympians, or other professional sportspeople.

    But also athletic, when it comes to body composition, are such people as fitness enthusiasts and manual laborers. Which makes for a lot more people affected by this!

    Athletic people tend to have more lean muscle mass (muscle weighs more than fat), and heavier bones (can’t build strong muscles on weak bones, so the bones get stronger too, which means denser)… But that lean muscle mass can actually increase metabolism and help ward off many of the very same things that BMI is used as a risk indicator for (e.g. heart disease, and diabetes). So people in this category will actually be at lower risk, while (by BMI) getting told they are at higher risk.

    If not white

    Physical characteristics of race can vary by more than skin color, relevant considerations in this case include, for example:

    • Black people, on average, not only have more lean muscle mass and less fat than white people, but also, have completely different risk factors for diseases such as diabetes.
    • Asian people, on average, are shorter than white people, and as such may see increased health risks before BMI qualifies as overweight.
    • Hispanic people, on average, again have different physical characteristics that throw out the results, in a manner that would need lower cutoffs to be even as “useful” as it is for white people.

    Further reading on this: BMI and the BIPOC Community

    In summary:

    If you’re an average white European working-age man, BMI can sometimes be a useful general guide. If however you fall into one or more of the above categories, it is likely to be inaccurate at best, if not outright telling the opposite of the truth.

    What’s more useful, then?

    For heart disease risk and diabetes risk both, waist circumference is a much more universally reliable indicator. And since those two things tend to affect a lot of other health risks, it becomes an excellent starting point for being aware of many aspects of health.

    Pregnancy will still throw off waist circumference a little (measure below the bump, not around it!), but it will nevertheless be more helpful than BMI even then, as it becomes necessary to just increase the numbers a little, according to gestational month and any confounding factors e.g. twins, triplets, etc. Ask your obstetrician about this, as it’s beyond the scope of today’s newsletter!

    As to what’s considered a risk:
    • Waist circumference of more than 35 inches for women
    • Waist circumference of more than 40 inches for men

    These numbers are considered applicable across demographics of age, sex, ethnicity, and lifestyle.

    Source: Waist circumference as a vital sign in clinical practice: a Consensus Statement from the IAS and ICCR Working Group on Visceral Obesity

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  • What will aged care look like for the next generation? More of the same but higher out-of-pocket costs

    10almonds is reader-supported. We may, at no cost to you, receive a portion of sales if you purchase a product through a link in this article.

    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.

    Aged care resident eats dinner from a tray
    Aged care users will pay more of their share for cooking and cleaning.
    Lizelle Lotter/Shutterstock

    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.The Conversation

    Hal Swerissen, Emeritus Professor, La Trobe University

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

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