Aged care

The Royal Commission into Aged Care Quality and Safety is holding its final hearings with Counsel Assisting making submissions to the Commission on what its final recommendations should be. It must be emphasized that these are only recommendations from Counsel Assisting, they are not findings of the Commission, let alone finalised government policy. However, they are likely to be influential in forming the Royal Commission’s final recommendations and, as such, are worth close consideration by aged care providers.

Counsel Assisting has made 124 recommendations, which, if implemented, would significantly impact how aged care organisations provide their services. The recommendations include a new planning regime for aged care which provides demand-driven access rather than the current rationed approach, a new and independent process for setting aged care quality standards, mandated staffing ratios and higher minimum wages, an independent pricing authority and a new independent Australian Aged Care Commission.

Importantly, they propose a new general duty of care, contained in legislation, that an approved provider ensure, so far as is reasonable, the quality and safety of its aged care services. There would also be a duty to ensure that any worker performing personal care work has the experience, qualifications, skills and training to perform that work.

Recommendations on corporate governance

Counsel assisting has also made sweeping recommendations on corporate governance within aged care, including:

  • a legislative requirement that all boards should have a majority of independent directors;
  • boards should have a "mix of skills, experience and knowledge of governance responsibilities, including care governance, required to provide governance over the structures, systems and processes for ensuring the safety and high quality of the care delivered by the provider". This would be done by establishing a skills matrix that is reviewed annually, with appropriate recruitment and the provision of training for directors;
  • a “fit and proper person test” such as is required of providers under the NDIS, should apply to directors (and key management personnel) with the organisation responsible for assessing and certifying fit and proper status;
  • all providers to have a mandatory clinical governance committee chaired by an independent director;
  • enhanced public annual reporting by boards including on staff turnover and complaints;
  • providers required to establish structure to deal with feedback and complaints from staff, clients and family members and report annually that this is occurring;
  • the provision of funding to assist particularly small providers in education and assistance on corporate governance.

Additionally, a member of the board would be required to attest annually, on behalf of the board, that the provider has in place the structures, systems and processes to deliver safe and high-quality care. This is already a requirement for health service providers.

Implications for directors

If implemented, these proposals raise a number of complex issues for directors in the sector. In particular, the proposed requirement that a nominated member of the governing body provide an attestation as to the safety and quality of care, would require a greater level of oversight than many NEDs might typically be accustomed. There are also a number of proposals which would represent a significant shift towards a more prescriptive governance framework such as the mandating of clinical governance committees and a majority NED board.

All that said, the Royal Commission has clearly shown that current practices in the sector are failing some of Australia’s most vulnerable people, which may well necessitate a fundamental rethink of how providers are managed and governed.

The AICD is therefore carefully considering the recommendations and acknowledges the failings that have been highlighted through the inquiry. If adopted, there would clearly need to be more work done on implementation, for example in smaller providers or those in regional and remote areas or in providers who rely entirely on volunteer boards.

AICD members who are directors in aged care should critically examine their own practices and structures in light of the Royal Commission and the possible recommendations outlined by Counsel Assisting. AICD members are able to access this tool assisting aged care directors with tasks like governing a quality and safety care culture, board agenda, reporting and information flows and red flags. The AICD will shortly release a new tool on clinical governance for directors in aged care as an additional resource.

Next steps

The Royal Commission is taking feedback on Counsel Assisting’s submissions until 12 November 2020. The AICD is preparing a submission on the governance recommendations and welcomes member views on the important issues raised. Please email any comments to policy@companydirectors.com.au.

The Royal Commission is required to provide its final report to government by 26 February 2021 and we await with interest to see whether the recommendations from Counsel Assisting are set out in the final report. It will then be a matter for Government to decide which recommendations to endorse and implement.