Only seven percent of Australians aged 70 and over are cared for in a nursing home. Three and half times as many older people rely on community care services such as home nursing, personal care and meals-on-wheels. Their numbers will rise to over 900,000 by 2015.

If the community care system is to manage the explosion in demand which will come as the baby boomers age, some serious problems need to be addressed.

In a major new report funded by the Helen Macpherson Smith Trust, we found that Commonwealth and State funding for the sector will need to rise from $2 billion today to $4.5 billion in real terms by 2015.

In addition to the ageing population, the key factors driving this increase are rising labour costs due to workforce shortages, the need for investment in the sector’s creaking infrastructure and the clear preference of older people with low care needs to remain at home with support rather than enter a nursing home.

Our research suggests that in many regions across the country there is insufficient demand to warrant the amount of funding allocated to low care nursing home places, but not enough funding for community care. Unless they have advanced dementia or are very frail, older Australians understandably want to stay at home.

Major reforms are also required to the current policy and funding arrangements in community care which are fragmented and inefficient. In Victoria for example, there are over 30 different Commonwealth and State programs each with their own rules and reporting requirements.

This creates confusion for older people and their families, unnecessarily limits access to some services, and reduces the flexibility of the support provided. For service providers, the current chaotic program arrangements chew up valuable staff time and hinder the delivery of top quality care.

Reorganising the funding of the sector into three complementary programs focusing on (1) Basic support to help people maintain their independence; (2) Chronic/complex health care and disability support; and (3) Support for people making the transitions out of hospital care, would greatly improve its coherence and efficiency.

There are compelling reasons for governments to invest seriously in community care.

It is very popular among older people and their families when it is delivered well, so there are political returns. It is also often a more cost-effective way to support frail elderly people than admitting them to residential care and hospitals because accommodation is funded by the care recipient and it works in parallel with informal care from family and friends.

For far too long, the big buildings and bigger budgets of nursing homes and hospitals have dominated the headlines. It is time to move community care from the margins of the ageing debate to centre stage.

About the authors

Tim Orton and Tim Watts are Managing Director and Consultant with the Nous Group. They are the co-authors of Moving to Centre Stage: Community Care for the Aged Over the Next 10 Years. The report can be downloaded from www.nousgroup.com.au