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.

An article published this week in the prestigious journal Nature Medicine documents what is believed to be the first evidence that Alzheimer’s disease can be transmitted from person to person.

The finding arose from long-term follow up of patients who received human growth hormone (hGH) that was taken from brain tissue of deceased donors.

Preparations of donated hGH were used in medicine to treat a variety of conditions from 1959 onwards – including in Australia from the mid 60s.

The practice stopped in 1985 when it was discovered around 200 patients worldwide who had received these donations went on to develop Creuztfeldt-Jakob disease (CJD), which causes a rapidly progressive dementia. This is an otherwise extremely rare condition, affecting roughly one person in a million.

What’s CJD got to do with Alzehimer’s?

CJD is caused by prions: infective particles that are neither bacterial or viral, but consist of abnormally folded proteins that can be transmitted from cell to cell.

Other prion diseases include kuru, a dementia seen in New Guinea tribespeople caused by eating human tissue, scrapie (a disease of sheep) and variant CJD or bovine spongiform encephalopathy, otherwise known as mad cow disease. This raised public health concerns over the eating of beef products in the United Kingdom in the 1980s.

Human growth hormone used to come from donated organs

Human growth hormone (hGH) is produced in the brain by the pituitary gland. Treatments were originally prepared from purified human pituitary tissue.

But because the amount of hGH contained in a single gland is extremely small, any single dose given to any one patient could contain material from around 16,000 donated glands.

An average course of hGH treatment lasts around four years, so the chances of receiving contaminated material – even for a very rare condition such as CJD – became quite high for such people.

hGH is now manufactured synthetically in a laboratory, rather than from human tissue. So this particular mode of CJD transmission is no longer a risk.

What are the latest findings about Alzheimer’s disease?

The Nature Medicine paper provides the first evidence that transmission of Alzheimer’s disease can occur via human-to-human transmission.

The authors examined the outcomes of people who received donated hGH until 1985. They found five such recipients had developed early-onset Alzheimer’s disease.

They considered other explanations for the findings but concluded donated hGH was the likely cause.

Given Alzheimer’s disease is a much more common illness than CJD, the authors presume those who received donated hGH before 1985 may be at higher risk of developing Alzheimer’s disease.

Alzheimer’s disease is caused by presence of two abnormally folded proteins: amyloid and tau. There is increasing evidence these proteins spread in the brain in a similar way to prion diseases. So the mode of transmission the authors propose is certainly plausible.

However, given the amyloid protein deposits in the brain at least 20 years before clinical Alzheimer’s disease develops, there is likely to be a considerable time lag before cases that might arise from the receipt of donated hGH become evident.

When was this process used in Australia?

In Australia, donated pituitary material was used from 1967 to 1985 to treat people with short stature and infertility.

More than 2,000 people received such treatment. Four developed CJD, the last case identified in 1991. All four cases were likely linked to a single contaminated batch.

The risks of any other cases of CJD developing now in pituitary material recipients, so long after the occurrence of the last identified case in Australia, are considered to be incredibly small.

Early-onset Alzheimer’s disease (defined as occurring before the age of 65) is uncommon, accounting for around 5% of all cases. Below the age of 50 it’s rare and likely to have a genetic contribution.

The risk is very low – and you can’t ‘catch’ it like a virus

The Nature Medicine paper identified five cases which were diagnosed in people aged 38 to 55. This is more than could be expected by chance, but still very low in comparison to the total number of patients treated worldwide.

Although the long “incubation period” of Alzheimer’s disease may mean more similar cases may be identified in the future, the absolute risk remains very low. The main scientific interest of the article lies in the fact it’s first to demonstrate that Alzheimer’s disease can be transmitted from person to person in a similar way to prion diseases, rather than in any public health risk.

The authors were keen to emphasise, as I will, that Alzheimer’s cannot be contracted via contact with or providing care to people with Alzheimer’s disease.

Steve Macfarlane, Head of Clinical Services, Dementia Support Australia, & Associate Professor of Psychiatry, Monash University

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