Appendix C: Why aged care is a failed market www.agedcarecrisis.com Inquiry - Future of Australia’s aged care sector workforce Appendix C: Why aged care is a failed market This document is part of our main submission, summarised below: 1. Main submission: Inquiry into the Future of Australia’s aged care sector workforce. 2. Appendix A: A Community Aged Care Hub This document is derived from our website that describes how the proposed Community Aged Care Hub might be structured. 3. Appendix B: 21st century thinking and research This document addresses the need for an effective customer. It discusses and supplies links to modern thinking about the provision of social services including personalisation, citizenship and community involvement. It examines 20th century failures before addressing the 21st century movement for open government, participatory democracy and a rebuilt civil society. Our proposal can be seen as lying within these movements and to meet their objectives. 4. Appendix C: Why aged care is a failed market In this document we have simply tabulated our criticisms and assessment of our political system, our providers and other participants as they impact on aged care and address most of these issues in greater depth and support our argument with quotes and references to a large amount of material. We list the large numbers, but largely ignored market failures where vulnerable customers or employees have been ruthlessly exploited. We argue that aged care is a vulnerable market and that the volume of criticism and information is so great that, in the absence of any other reliable data, it must be accepted and acted on. The reasons why it is a failed market are quite clear. This is only a small representative sample of the material we have collected over the years. 5. Appendix D: Community integration Our proposal is a wide ranging one which sees aged care integrated at a community level and not at a government level. Government will work through and with the community. This will vastly improve its utility to serve the community and its seniors. We have made submissions to other inquiries including those below. These illustrate the manner in which our community proposal will enable all of these services to be integrated and work together. It would also facilitate integration with the health care services and the NDIS locally. It may be possible to reduce the costs by sharing staff. Please consider our submissions (already submitted) at these links as supporting evidence to your committee: • Review of Aged Care Advocacy Services: ACC feedback form questions and our responses: http://bit.ly/25tqXxK ACC supplementary submission: http://bit.ly/1PCdyaY • Inquiry into elder abuse in NSW ACC submission: http://bit.ly/1RMaEZ0 Aged Care Crisis Inc. Page 1 Appendix C: Why aged care is a failed market www.agedcarecrisis.com Inquiry - Future of Australia’s aged care sector workforce Contents 1. Introduction ............................................................................................................................ 3 2. Politics and aged care .............................................................................................................. 5 A. Vulnerability ..................................................................................................................................... 5 B. The role of a customer ...................................................................................................................... 6 C. Logical errors ..................................................................................................................................... 6 D. Ignoring confronting evidence ........................................................................................................... 7 E. The nature of markets ....................................................................................................................... 8 F. The erosion of civil society .............................................................................................................. 12 G. Government in crisis ....................................................................................................................... 13 H. Government ability to control markets ........................................................................................... 19 I. Political gullibility and staffing .......................................................................................................... 19 J. Uncontrolled markets ignore evidence and degrade humanitarian values ....................................... 21 K. Collecting data in Australia .............................................................................................................. 22 L. International data ............................................................................................................................ 27 M. Aged Care failure in Australia ........................................................................................................ 32 N. Vulnerable markets – the wider context ......................................................................................... 36 O. Drawing obvious conclusions .......................................................................................................... 43 P. Sacrificing our seniors ...................................................................................................................... 45 3. Providers of care ................................................................................................................... 47 A. For-profit providers ......................................................................................................................... 47 B. Not-for-profit providers .................................................................................................................. 56 4. Unions, professional and registration organisations .............................................................. 61 5. Staff and families .................................................................................................................. 61 6. The proposed community aged care hub ............................................................................... 64 7. Relevance to our proposal for aged care ................................................................................ 67 Aged Care Crisis Inc. Page 2 Appendix C: Why aged care is a failed market www.agedcarecrisis.com Inquiry - Future of Australia’s aged care sector workforce 1. Introduction In our submission we made a number of allegations in point form which many will deny and reject. In this appendix we have marshalled the material, which supports our assertions and our arguments using references and quotes. There is a vast amount and this is only a representative sample. It is primarily to counter those who wish to reject our arguments. Aged care is a failed market and it is only one of a growing number of failed markets. We have assembled a long list of links to material that:1 • shows how widespread failed markets due to vulnerable customers or workers are • shows the unhappiness of many of those who have experience of the aged care system • illustrates what is happening or has happened. • addresses some of the issues Countries that have based their aged care systems on similar belief systems have similar failed markets and their elderly have suffered the same consequences2. Adequate staffing and working conditions have been a core problem. During the late 1990s, the aged care market in the USA entered a phase of rapid corporatisation and consolidation. There is extensive information showing how the major corporate chains involved in this behaved and the long term consequences for the system and for the residents in nursing homes3. In the UK, a Panorama TV program showed graphic footage and gave multiple examples in an expose in 2014. A TV program in the USA in 2013 showed similar footage and analysed the failure of their market system. There is more than enough information to show doubters that there are serious problems in aged care in countries that like Australia have applied free market principles to their aged system. This Appendix addresses the how and why and the evidence that Australia is well down the same path and making the same mistakes. It explains why this has happened so that we can see what we need to do about it. Examples The UK: In the UK the failures in care by big corporations have been overshadowed by the havoc caused by private equity. A 2014 TV program exposed what was happening but is no longer available. This article describes the Panorama program - the charity Compassion in Care, in partnership with Private Eye magazine, found that of the chain’s (ie UK INT FP Company) 30 care homes (in Scotland), there were serious failings at 10, and nine gave cause for concern. ------------------------------- She (Eileen Chubb from “Compassion in Care”) cites the 2011 collapse of care home provider Southern Cross as an example of this: “I went into 60 of their homes, and could see that the staff had been cut to the bones - - . ------------------------------- 1 Further reading Aged Care Crisis web site http://www.agedcarecrisis.com/solving-aged-care/part-4/further-reading 2 International aged care Aged Care Crisis web site (a web page examining the UK and the USA) http://www.agedcarecrisis.com/solving-aged- care/part-4/international-aged-care 3 Aged Care and Nursing Homes the