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Consumer Directed Care in Residential Aged Care

By Julie McStay17 Jul 2015

When the Living Longer Living Better (LLLB) reforms were released, the government announced that it would be exploring options to expand the model of consumer directed care (CDC) into residential aged care.  At present, there is little movement from the industry to apply the CDC model across residential care services.  However, the recent transition to CDC of home care packages can provide important lessons for what issues might arise if CDC is implemented into residential care.

When are we likely to see consumer directed residential aged care?

The aged care reforms package budget allocated funds towards pilot trials of CDC in residential aged care.  The purpose of the pilot trials was to gain insight into whether opportunities existed to move towards a consumer demand driven model and to measure the effects of embedding CDC into mainstream aged care.[1]

At this stage there has been no commitment to a timeline for the transition to CDC and the pilot programs that were flagged in the LLLB reforms are yet to commence.  Until trials are conducted, the industry will not have the benefit of evaluating the results of any practical application of models of CDC in residential care.  Despite this, the government has made it clear that the CDC model will be expanded into residential aged care at some stage in the future.  The government strongly supports a move towards consumer focused care and services for the whole industry. It is therefore timely for providers to start considering how they might be able to adapt their model of service delivery to meet consumer demand under CDC.  

How will CDC operate alongside the provider’s duty of care?

The primary issue for providers is how to balance their duty of care with the consumer’s right to make choices and direct their own package.

Provider’s duty of care

An aged care provider and its workers owe a duty of care to the aged care recipients who receive the provider’s services.  The provider’s duties, under legislation and at common law, at minimum are to take reasonable steps to ensure the health, safety and wellbeing of care recipients.

Consumers’ rights

Consumers’ rights are deeply-rooted in the common law as a person’s right to autonomy or self-determination.  It is about respecting an individual’s right to take risks and choose how he or she should live, his or her life.  The CDC environment makes it easier for a consumer to exercise their right to autonomy for it allows the individual to control, as far as feasible, their health care and treatment.  The CDC approach puts the care recipient’s preferences at the forefront of the decision making process and requires increased focus on what the consumer wants.  

Where the law, supports that a person’s autonomy should be restricted as little as possible, an aged care recipient’s care must be balanced with the need to protect them from foreseeable risks.  And so traditionally, residential aged care facilities have opted for risk averse business models to meet the needs of vulnerable residents. 

How will providers address these issues in practice? 

The CDC approach is centred on an individual exercising their preferences by making independent choices about service delivery.  For residential care this is more likely to mean the individual will have the freedom to choose how and when their services are implemented, rather than the type of services that will be provided.

An effective CDC model will respect the right of individual consumers to exercise greater control over their package even if they do not have the expertise or capacity to make the choices that are best for their assessed care needs.  These CDC changes will demand effective management strategies, communication and ongoing education within the residential setting.

Providers will need to have strategies in place to address communication barriers such as cognitive impairment, capacity issues or English language proficiency.  Robust models of communication and information sharing will need to be implemented to ensure that vulnerable care recipients are not disadvantaged under CDC.  And importantly, care recipients, or their representatives, will need to be well informed so they can make decisions that suit the best interests of the care recipient while acknowledging their individual preferences.

Staffing and information systems

Staff mix, classification and rostering will require consideration and adaptation to meet consumer demand.  Although this is likely to create a strain on resources, it could also lead to innovation in service delivery models.  For example, if the consumer has the right to choose when they receive their meals, the kitchen will need to be open longer hours to accommodate this.  The extended hours will therefore increase demand on consumer co-contribution or cause providers to consider new strategies to meet the gap between funding and consumer demand.

Providers will also need to establish if their current facility’s information systems are sufficient to process the type and volume of data necessary to implement consumer’s choices.  It is likely that systems will need upgrading or replacing to manage the input of consumer preference information effectively.


Approved providers are understandably concerned about whether CDC will be financially sustainable in residential care while maintaining quality of service delivery.

There are two clear funding issues that will emerge as providers attempt to maintain economic efficiency while providing the best possible care outcomes.   The first is whether current financial, business and funding models will be able to operate effectively in the context of CDC.  The second issue is whether current funding levels will be sufficient to support the implementation of CDC in residential care. 

At the moment, although the Aged Care Funding Instrument (ACFI) is based on an assessment of the resource requirements of individual persons, the ACFI ultimately provides funding as a bundle for the service. In contrast, one of the primary elements of CDC is an individualised budget for each care recipient.  The current bundling of the ACFI will not appropriately provide for an individual budget as required by CDC.  It is not clear under the current system what proportion of the ACFI funding relates to individual care recipient’s at any given time and this will make it difficult to determine how much can be spent by each care recipient.

Therefore the uncertainty surrounding CDC in residential care also includes whether the level of funding will be adequate to support CDC in residential facilities while maintaining quality of care.  The government will need to consult with the industry and consider what changes will need to be made to the funding model to ensure it can be applied effectively in a CDC environment. 


At present it is unknown when and how CDC will be implemented into residential aged care facilities.  Until we know more about the government’s plans to introduce CDC into residential care, the implementation of CDC into home care packages provides a base to determine what issues may arise.  Funding, staffing, appropriate facility management systems and the balance between consumer’s rights and duty of care are some issues that have been discussed in this article.  What we do know is that the government has acknowledged that CDC is likely to be introduced across the industry. Therefore approved providers may do well to be innovatively thinking as to how they will accommodate CDC within their facilities.

[1] Explanatory Memorandum, Aged Care (Living Longer Living Better) Bill 2013 (Cth), cl 2(c)