Is Consumer Directed Care the right move for Residential Aged Care?

Consumer Directed care, or CDC, is certainly a buzz word at the moment. So what is CDC? In technical terms, It is a way of delivering services that allow consumers to have greater control over their own lives by allowing them to make choices about the types of care and services they access and the delivery of those services, including who will deliver services and when.1 At the core CDC is about enhancing choices for a resident, this can be as simply as choosing what time to eat dinner, or it could be complete control over their budgets.

It sure sounds great in theory and The Commonwealth is hailing CDC as the future for Residential Aged Care in Australia, but is it the right move? From what we’ve been told, the move to CDC has the following positives attributes:

  1. It will follow the international trend towards CDC in aged care.
  2. It will make our residents happier.
  3. It will increase competition and therefore quality in our industry.

The question is, however, are any of these statements actually correct? Let’s take a deeper look into the research that the Commonwealth has provided on the topic.

Is the move to CDC in line with international movements for Aged Care?

In short – no one actually knows for sure! While it may be an international movement in Home Care, CDC in Residential Care remains basically untested. KPMG (Worldwide Consultancy Firm contracted by the government) in July 2014 completed their report (only recently released to the public) on the ‘Applicability of Consumer Directed Care Principles in Residential Aged Care to the Department of Social Services’. According to the report and literature review ‘there is limited literature available on CDC models and approaches within a residential aged care setting, and a lack of evidence relating to efficacy or outcomes of CDC in residential Aged Care’. So, while there is some international movement towards CDC in a residential care setting, there is limited knowledge on outcomes or the effectiveness of CDC. The report continues to discuss the international movement but references more personal decision making on day to day activities within a facility – promoting a more ‘home-like’ environment rather than CDC as an overall concept for residential aged care. The report does, however, highlight the importance of having a mainstream vision to the application of CDC, which is entirely necessary for its success.

However, the report itself lacks adequate research. The review of current literature surrounding CDC in aged care given by KPMG was minimal. For example while the term ‘Aged Care’ is commonly used in Australia, this is not the case internationally. Overseas there is a tendency to refer to it as ‘Elderly Care’ and regrettably the report did not reflect this in their own research for scholarly articles about CDC. There was also no research done on ‘choice theory’ which is based on scholarly debate on how people like to make decisions. Moreover, the consultation with the Aged Care industry stakeholders only included 15 Providers/Groups. This means it did not directly encompass any resident interviews, which seems somewhat hypocritical given the concept of CDC is to increase resident choice. KPMG are contradicting themselves by saying that residents shouldn’t have a say in whether they think CDC is a good idea.

It seems that much of the recent conversation around CDC has arisen from this report. Given the shortcomings in the research method, any redirection to Consumer Directed Care based on these findings is, in our opinion, not a well-founded decision. More research is required to determine if the concept as had positive outcomes worldwide.

Will our residents be happier?

There are several disputes that need to be highlighted with increased choice in Aged Care:

  1. Does more choice always equal higher satisfaction rates?
  2. Are residents in aged care capable of making complex decisions about health and care? And do they actually want to?
  3. Who is the consumer when the resident has lost capacity to make decisions?

Does more choice always equal higher satisfaction?

In a lot of cases harder decisions make people less happy with the result. Increased complexity in decision making (as is the case in Residential Aged Care) has found that more choice is associated with decreased satisfaction.2 For example, it may initially seem great when confronted with 50 different brands and flavours of jam, but when it comes to actually making the decision it can get quite confusing and stressful. While The Commonwealth is attempting to solve this stressful problem through the ‘My Aged Care’ website, there is still complex budgeting and care decisions that need to made. It is just not true that in all cases more choice equals happier residents.

Are residents in aged care capable of making complex decisions about health and care?

Another key issue with increased choice is the capacity for a consumer to make a decision, or make the right decision to support their health. It is often the case that when a resident enters residential care, they do not have full decision making capabilities. Often, especially in residents with high care needs, their health has deteriorated to the point where complex decisions are just not possible. A study in Sweden, which is an OECD country with a similar residential care landscape to Australia, addressed the issue of declining capacity to make ‘good’ decisions due to ageing.3 Their study based on a national representative sample of older Swedes (77 or over) revealed that one third scored low cognitive ability or their cognitive ability was so low that they could not be interviewed. As Sweden and Australia have similar health outcomes, these results can be considered reliable to generalise to the Australian population. Also considering that 7% of the Australian population over 70 and 23% of the population aged over 85 are accessing residential aged care – this is likely to be an extremely relevant issue.4 Whilst dignity of risk should be respected there is a point where we must acknowledge that someone may not have the capacity to make decisions or decisions that will positively impact them. Which brings us to the next question – who in fact is the intended ‘consumer’ in this concept?

Who is the consumer?

This question highlights another issue that is important in residential care: who is the consumer? If a resident has lost capacity and has appointed a legal authority, that authority will then be making the decisions about their care. Is the legal authority then the consumer? Should they have the same realm of choice as a resident fully capable of making their own decisions? Conflict resolution issues and regulation limiting family/legal authority choice will need to be put in place to ensure that the resident’s needs and preference are at the forefront of decision making.

The importance of choice should in no way be undermined by these comments, as it is the level of choice available that should be debated. Moreover it is the combination of choice with a competitive market based approach that seems to be problematic, and not well considered in the Commonwealth’s applicability of CDC to residential care.

Will increasing competition increase quality?

The current direction for the Aged Care industry in Australia is the move to a competitive market structure, but is this correct? This would fundamentally imply that aged care acts as a relatively ‘perfect’ competitive market. In essence, we are basically comparing aged care to selling something as trivial as toothpaste. A competitive market is moderately deregulated and if we assume this applies to aged care the below characteristics will apply.

  1. All companies sell an identical product
  2. All companies are price takers – they cannot affect the market price
  3. All companies have a relatively small market share
  4. There is symmetry of information amongst consumers/providers, everyone knows the same things
  5. There are no/little barriers to entering or exiting the market
  6. Providers/Consumers have the ability/are assumed to make rational decisions to maximise their own interests

You don’t need to be an economist to see that that most – if not all – of these criteria are not satisfied in aged care. So instead we should be asking, why is a competitive market structure forced upon an industry that can in no way be compared to selling toothpaste?

Based on the current research available, the move towards CDC at this point seems unfounded and unrealistic for both the Providers and Residents. The capacity for negative outcomes from this move is far too significant to contemplate without the Commonwealth providing the industry with direction and logical reasoning. In our opinion, the Aged Care industry deserves more thorough research to be completed before the Commonwealth takes steps to further impose CDC on the industry.
1 – (Department of Health and Ageing (2013) Commonwealth Home Care Packages Program Guidelines, August 2013).
2 – (Botti & Iyengar, 2006 The Dark Side of Choice: When Choice Impairs Social Welfare; Iyengar & Lepper When choice is demotivating: can one desire too much of a good thing? 2000; Thomson & Dixon, Choices in health care: the European experience 2006).
3 – (Bettina Meinow, Marti G. Parker, Mats Thorslund: Consumers of eldercare in Sweden: The semblance of choice, 2011)
4 – (Aged Care Financing Authority Report on the Funding and Financing of the Aged Care Sector – July 2015)

Kelly Kelly Fawcett – Supplement Recovery Manager



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