Australia has about 1.3 million people receiving aged care, yet only 240,000 of them are in a nursing home.

According to aged-care guru Rachel Lane, author of the best-selling book Aged Care Who Cares?, these figures dispel the myth that institutional care is an inevitable path for Australians as they age.

“What it also does is expose an imbalance in current government funding of aged care that the royal commission has shown needs to be done better,” says Ms Lane.

“At the moment, the government actually offers a bigger incentive for people to move into an aged-care facility through the aged-care funding instrument,” she says.

“This needs to change if we want to improve outcomes for people in need of care and also save valuable government resources.”

Under the current system, the ACFI (Aged Care Funding Instrument) is the primary mechanism by which residential-care facilities get their funding from government.  

Through this mechanism, the government pays an aged care facility up to $250 per day for a resident’s care.

In comparison, the funding that someone can receive through a home-care package is capped at about $150 per day, an imbalance that Ms Lane sees as a recipe for poor outcomes.

“To me the system is counterintuitive because it actually incentivises people to move into nursing homes when, in reality, it’s not what the government really wants and if you ask most senior Australians, it’s not what they want either,” says Ms Lane.

“As the royal commission has revealed, just because you are moving into residential aged care, doesn’t mean you will get better care.

“Home care is significantly cheaper for the government. It enables people to stay in their own home, whether that’s a traditional family home in the suburbs, a granny flat, a retirement village, wherever they call home.

“If the government is funding someone’s care, why should that funding be capped based on where they choose to live?”

Ms Lane says that, with more than 80 per cent of people choosing to stay at home, more of those people could stay at home longer if the government gave as much funding to home care as it did for nursing-home care.

“It’s not fair to limit your aged care funding based on where you choose to live,” she says.

“There are some people who will need to move into residential aged care simply because of their care needs, but it doesn’t necessarily mean their care needs are what we would call high.

“It means that the safest and most appropriate place for them to get that care is in residential aged care.

“But for the majority of people, and certainly the people who can stay at home, we shouldn’t have this bias in funding where the amount they get towards that care is limited because they stay at home.”

Ms Lane says home-care packages become even more effective among people who choose to live in retirement communities with many of the newer villages being apartments which are purpose built for the delivery of care if and when it’s needed.

“With home care, you can pay a fee for travel time. But, if you have someone who can go door to door and those doors are six metres apart, and you have an operator who has bargaining power, then you get a double benefit - more care for less money.”

According to retirement industry veteran Phil Usher, this sentiment works well with what his newest initiative, Odyssey Private Aged Care are offering.

“Odyssey is a community of people living in their own home who need some care with the added bonus of solving the social isolation issue,” says Mr Usher.

“Odyssey can and does provide all levels of care, which means as home care requirements increase, there is no need to leave your home at Odyssey. Normality continues.

“People generally do prefer to stay at home and while you can get care at home, you can’t make new friends and socialise.

“As Rachel Lane points out, it can also be expensive to receive home care on a location by location basis whereas when you have a community of people requiring home care, it is much cheaper to deliver great quality services, including care.

“Odyssey is the next generation of what Rachel Lane is talking about and more.

“The future should look to enhance this model that respects people’s need for independence while adding an extra level of services they can’t receive or afford at home.”

Mr Usher, who heads residential retirement living operator Odyssey Health Group, has been championing the cause of innovative retirement living for more than two decades.

Odyssey is currently developing an $81 million innovative three-tower luxury aged-care project at Robina on the Gold Coast.

The state-of-the-art community, set in a resort-style environment with a 24-7 on-site care team, draws on Mr Usher’s experience in the industry over more than two decades with a focus on giving residents the level of care they need on demand.

Through a care-banding system, Odyssey offers residents as much autonomy as they want to be socially active or the option of having someone in their apartment eight hours a day if required.

“There are clear benefits for people who choose to age in place and that’s what we have been working towards for many years now,” says Mr Usher.

“With a more balanced approach to aged-care funding, the government and the private sector can achieve better outcomes for the sector and provide more people with the care they really need.”