This case study illustrates the potential challenges aged care boards (Governing Body) may face under the new reforms. It provides a practical example of issues boards must address, including meeting new regulations, managing finances, improving individual choice, and handling workforce demands.

The decision-making process in these areas is complex, often without clear right or wrong answers. By using real-world scenarios, this case study highlights the impact of board decisions and aims to help directors understand their governance role. Proactive and informed leadership is essential to ensuring high-quality, person-centred aged care.

Introducing Acorn Creek Aged Care

Acorn Creek Aged Care is a medium-sized not-for-profit residential aged care facility located in rural Victoria, providing care for 80 residents. The facility is governed by a newly formed board of directors, many of whom are new to governance roles. With the introduction of the Australian Government’s new aged care reforms, the board is tasked with aligning operations and care provision with new legislative and compliance requirements.

Item 1 - Resource Allocation for Mandatory Care Minutes

The aged care reforms mandate 200 care minutes per resident per day, including a minimum of 40 minutes with a registered nurse (RN). Acorn Creek Aged Care averages 180 minutes, with only 30 minutes of RN time. The board must consider how to achieve these mandated care minutes.

Board Considerations:

• Hiring additional staff increases wage costs, impacting operational budgets.
• Sourcing qualified RNs and care staff in rural Victoria is challenging.
• Exploring technology and upskilling personal care workers (PCWs) as potential solutions.

Board Decision Options:

• Option A: Hire four new staff members (two RNs and two PCWs). This would meet requirements but is financially unsustainable.
• Option B: Upskill existing PCWs while hiring two RNs. Balances sustainability and workforce development, improving staff morale and retention.
• Option C: Rely on agency staff for flexibility. High cost with inconsistent care quality.

Outcomes:

• The board selected Option B, approving funding for two new RNs and implementing an in-house training program for PCWs through government workforce development grants.
• Met care minute requirements while controlling costs.
• Improved staff retention through professional development opportunities.
• Residents benefited from familiar staff providing consistent care.

Item 2 - Financial Sustainability and Enhanced Reporting

New reforms require aged care providers to demonstrate how government funding is used to provide direct care. Non-compliance can result in funding penalties or loss of accreditation.

Board Considerations:

• Current financial reporting lacks transparency and detail.
• Outdated software systems require upgrades for modern financial management.
• Directors have varying levels of financial acumen, posing risks in interpreting reports.

Board Decision Options:

• Option A: Maintain existing systems with minor upgrades. Insufficient for compliance and transparency.
• Option B: Invest in new financial software and provide financial literacy training for the board. Improves long-term governance and decision-making.
• Option C: Outsource financial reporting to an external provider. Costly and reduces board oversight.

Outcomes:

• The board selected Option B, approving a new financial software system and engaging a consultant for financial literacy training.
• Improved accuracy and timeliness of financial reporting.
• Enhanced board confidence in interpreting financial data.
• Clearer alignment of spending with direct care provision, ensuring compliance.

Item 3 - Individual Engagement and Choice

Reforms emphasise consumer-centred care, requiring providers to involve individuals, their carers, and their families in decisions about their care and daily activities. A recent survey revealed dissatisfaction with this involvement. No routine surveys or feedback sessions were in place.

Board Considerations:

• Care planning often did not involve individuals or families.
• Feedback highlighted a need for more choice in meals, activities, and personal care options.
• Balancing consumer choice with budget and staffing capabilities.

Board Decision Options:

• Option A: Conduct biannual surveys to gauge satisfaction. Provides insights but lacks real-time feedback.
• Option B: Establish monthly resident forums and appoint a consumer engagement officer. Actively engages residents and aligns with reform goals.
• Option C: Focus on staff training in person-centred care without formal forums. Valuable but insufficient without direct resident input.

Outcomes:

• The board selected Option B, hiring a consumer engagement officer and initiating monthly forums.
• Increased resident satisfaction and quality of life.
• Higher star rating, improved public perception, and increased resident admissions.
• Strengthened relationships between staff, individuals, and families.

Item 4 - Risk Management and Compliance

Non-compliance with aged care reforms carries significant risks, including financial penalties, reputational damage, and loss of accreditation.

Board Considerations:

• Current risk oversight lacks structured processes for tracking compliance.
• Directors need a clearer understanding of new compliance requirements.
• Identifying risks such as staffing shortfalls, data privacy breaches, and care quality concerns.

Board Decision Options:

• Option A: Assign compliance oversight to the CEO and senior management. Risks: insufficient board oversight.
• Option B: Create a board subcommittee focused on quality and risk management. Strengthens governance and ensures ongoing focus on compliance.
• Option C: Engage an external auditor for annual compliance checks. Useful for verification but lacks continuous oversight.

Outcomes:

• The board selected Option B, forming a Quality and Risk Subcommittee with quarterly internal audits and external compliance reviews.
• Early identification and rectification of compliance gaps.
• Enhanced board understanding of risk management responsibilities.
• Improved operational standards and maintained accreditation.

Overall Lessons for the Board of Acorn Creek Aged Care

1. Proactive planning is critical. Delaying reform compliance decisions can jeopardise funding and accreditation.
2. Investment in the workforce yields long-term benefits. Upskilling staff improved morale and retention while controlling costs. Government grants and scholarships are available to assist with staff training.
3. Consumer engagement is non-negotiable. Listening to and addressing individual needs enhances care quality and organisational reputation.
4. Effective risk management requires board leadership and oversight. Establishing a subcommittee ensures sustained focus on compliance.
5. Financial transparency strengthens trust. Accurate reporting not only meets compliance but also enhances donor and community confidence.

This case study highlights the necessity of informed governance, proactive decision-making, and strategic investment to ensure aged care providers remain compliant, sustainable, and committed to high-quality, person-centred care.

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