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mid-sized business report

Is it time to review how we remunerate the Health & Aged Care sector?

Darrell Price Darrell Price

The Health & Aged Care sector is one of the largest employers in Australia and is dominated by small and mid-sized enterprises.

Unlike most of the sectors in this report, these enterprises deliver a community benefit in their work, and rely on government policy and funding models for their revenue. The enterprises and policy makers in this sector don’t always apply a growth mindset to their business. However, to achieve their service and organisational goals, they should.

The two Royal Commissions that have been called in 2018 and 2019 – for the aged care sector and disability service sector – not only put a spotlight on the quality of care in the system, but also highlight areas where we can further support the health and aged care sector to not only meet, and exceed, community expectations, but to also grow to become more sustainable. And sustainability is essential. Sustainability delivers better quality services, better quality outcomes, more people employed and more people having access to essential services. All positive benefits that our communities expect from the sector.

In 2016-17 Australia spent around 10% of GDP on health, in line with the world average. However, funding continues to be an ongoing challenge for the broader sector, with inconsistencies in where that funding comes from.

The aged sector and disabilities services are primarily funded by the Commonwealth, while the healthcare sector is funded by the States. The funding ‘pie’ typically doesn’t get much larger, but the slices are reapportioned to try and accommodate population growth and new services. It’s competitive to get your share.

What we fund is just as important as how much funding is available – with an emphasis on ‘beds filled’ or treatment types delivered rather than on the quality of the care or rewarding programs designed to reduce the prevalence of preventable disease. It is admirable that the Liberal and Labor parties want to invest in cancer research, however investments in prevention will eliminate the need for some of this research and allow vulnerable people to avoid disease in the first place. With the cost of running a community program to improve overall health outcomes much cheaper than the cost of treating disease, surely a re-think on what we fund in the system could achieve a better return on investment? The upshot: more essential funding is available for those who truly need it.

A potential barrier to this is patchy business maturity in the sector. Knowing what to invest in – the kinds of skills and roles that will boost outcomes as opposed to creating more bureaucracy – is a skill that many companies in the sector require but may not have. 

In addition to access of funding being difficult, the availability of quality and qualified people to work in the industry continues to be a barrier – particularly in demanding roles (such as nurses in the aged care sector) and in regional areas.

Governments need to understand that certainty of funding allocations and models is required to stimulate long term investments in health service facilities, from built environment to specialist diagnostic equipment. Our industry requires long term commitments.

Download our mid-sized business report to read the full Health & Aged Care insight.

Here is a short introduction to our three recommendations to help boost the Health & Aged Care sector:


Industry support package

To improve the sector there must be public investment – to support the companies in the sector develop implementable strategies, improve governance, and improve their ability to service the needs of their community.

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Change how we remunerate our Health & Aged Care sector

The more patients or clients you see in a higher earning category, the more you receive from the government. This very quickly becomes a numbers game that focuses on the treatment of disease and not on the prevention of disease.


Support the upskilling and attractiveness of the sector for workers

There are over 1 million people working in the Health & Aged care sector in Australia – and this is just in the private sector. It’s demanding work, with a number of people in the sector requiring a Certificate 3 minimum to enter the sector. How can we encourage more of the right people into the sector?

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