Reimagining governance in aged care

4 minute read  15.03.2022

Governance is a key priority for aged care providers. Facing a Bill that sets out new governance obligations, organisations have a lot of work ahead to ensure they are compliant. In our new podcast episode, we explore some of the key issues to address.

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The Royal Commission into Aged Care Quality and Safety identified governance as a key priority for the aged care sector. Now the government has introduced the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, which sets out new governance obligations.

But how can the sector respond sufficiently to the ongoing regulatory change?

And will the proposed reforms really bring a tangible uplift in the delivery of safe, high quality care?

MinterEllison brought together a panel featuring partners Penelope Eden and Donna Worthington, along with Virginia Bourke from Mercy Health and Graham Hodges from Regis Health, to address some of the burning issues in aged care governance.

New governance obligations

The Bill contains a number of new obligations.

For example, from 1 March 2023, existing approved providers must have a majority of independent non executive directors. In addition, at least one member of the governing body must have experience in the provision of clinical care. There are also new rules relating to approved provider entities that are wholly subsidiaries, which prevent directors from prioritising the interests of the holding company in circumstances where it does not have responsibilities under aged care law. Providers must also establish a quality care advisory body to be chaired by a non-executive member with appropriate experience in the provision of clinical care to monitor and ensure accountability for the care provided.

In this evolving environment, providers face a number of challenges. They need to remain focused on effective risk management and organisational governance.

 

You can't 'compliance' your way to the high-quality system that we're looking for, and no provider wants to deal with an increased reporting burden.”
Penelope Eden

 

Governing during a time of crisis

Since the beginning of COVID-19, providers have been effectively governing in a state of crisis. Flow of information between boards and executives is critical. So is transparency with staff, residents and clients.

However, the different regulatory requirements across federal and state governments in Australia add an additional level of complexity to a time that is already challenging.

Mercy Health Chair, Virginia Bourke says 'in terms of governance, it's gotten to the point where if we are to govern effectively, we need to come up with a different way of managing this crisis that streamlines some of [the complexity], that offers our people clarity and reassurance… And so I think it has been a time of great adaptability in governance.'

Benefiting from the reforms

The sector needs to shift its focus to continuous improvement to reap the benefit of the reform process and ensure it is more than just an exercise in compliance.

However, Graham Hodges says there needs to be 'reciprocal accountability on the government and the regulators to make sure that the reform program is properly articulated in plenty of time for providers to get themselves ready.'

 

Good governance from a board point of view is to have a plan about how we're going to achieve milestones, and how we track those to make sure that we're delivering in the right way.”
Graham Hodges

'We need actual consultation ahead of time and we need to have time to implement before that,' he says.

Driving meaningful change

In looking at regulatory obligations, there is a risk of teams operating in isolation and responding to the recommendations in a piecemeal way. If there is too much focus on 'ticking the box', organisations lose an opportunity to drive meaningful change and get more business value.

Donna Worthington says it's important to 'test your assumptions along the way and have a very clear sense of the end state – what is it that you're trying to do.'

She also emphasises the role of clear communication across all lines of the business.

 

Clear communication around what the priorities are is so important to hear, from the board down, for those organisations battling in the environment that they are.”
Donna Worthington

 

She says that boards need to ask 'what are our priorities and how are we going to tackle them? And how do we set up a decision-making framework that allows us to do that relentless prioritisation that's required?'


Listen to the full episode

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https://www.minterellison.com/articles/podcast-reimagining-governance-in-aged-care

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