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Financial and Prudential Regulatory Insights – June 2023

Peter Edwards, Executive Director, Financial and Prudential Regulation

In this month’s post I am doing something a little different, as I want to reflect on the Commission’s National Aged Care Provider Conference that was held in Melbourne last week (8-9 June 2023). 

In the coming weeks the Commission will be posting a lot of information about the conference, however, in addition to that I will provide a few personal reflections on this great event. This also gives me a chance to cover off on a couple of questions I didn’t get time to fully address when I presented at the conference. We will look to follow up on all other questions through other channels in coming months, including in an upcoming Commission webinar focused on compliance.  

The theme of the conference was Working Together: our journey through aged care reform and regulation. 

We had the honour of having the conference opened by the Hon Anika Wells MP, the Minister for Aged Care followed by Maree McCabe AM, Chief Executive Officer of Dementia Australia and Chair of the Quality and Safety Advisory Council. They both gave compelling speeches about why we all need to be ambitious in driving forward the reform agenda to deliver real change that benefits older Australians. In setting the direction for the conference, Minister Wells did not shy away from acknowledging that with ambition comes challenges that the sector, including the Commission as the regulator, must collectively commit to addressing to capitalise on progress that has already been made. 

Our Commissioner, Janet Anderson, then gave an inspiring speech setting out why and how we regulate, and what that looks like in practice as we strive to create an environment that delivers a great aged care experience for older Australians. The Commissioner’s presentation will be released in coming weeks. I strongly encourage those of you who didn’t get to hear it - to look out for its release. 

Janet’s speech really set the scene for my colleagues and I who ran parallel sessions at the conference, giving a behind the scenes look at the approach we take to complaint handling, quality monitoring and audit, and our compliance activities. 

In my role as the Executive Director responsible for management of compliance in relation to all aged care obligations (not just financial and prudential requirements), it was a great privilege to talk to so many people from across the sector. One of the themes of my talk was how risk informs the decisions we make about how and where we direct regulatory effort. Through this I sought to provide greater clarity about what we mean when we say we are a “proportionate” risk-based regulator. 

Amongst other things, I explained how the Commission works to build the right incentives in our regulatory approach for providers to be given the chance to self-correct identified non-compliance before we consider whether to exercise the Commission’s more significant regulatory powers. That decision is based on our assessment of the risk that the non-compliance poses to people who depend on the provider’s services.  

Generally, the lower the level of consumer risk, the more comfortable we will tend to be with giving a provider a bit more space to remedy the non-compliance with less direct oversight from us. This then leaves the Commission - and my group in particular - with the capacity to direct a far greater level of time and resources into direct case management of those providers that are posing a greater risk to consumers. Indeed, this approach also supports us to direct our resources to areas where we are seeing potential signs of higher than usual risk, where non-compliance may not yet have been established. This type of proactive engagement is key to the Commission playing a more active role in preventing non-compliance before it emerges to create an environment where harm is caused. As outlined by the Commissioner in her speech - this approach is central to the Commission being an outcomes driven regulator that is both effective and efficient in shaping provider and sector behaviour for the benefit of older Australians. 

My presentation on this theme led to lots of questions, some of which I did not get to answer in every session. An important question asked was whether this approach suggests that the Commission does not care about lower risk non-compliance. The answer to that is of course no, we do care! 

All non-compliance matters and ultimately needs to be fixed. What the Commission is doing is distinguishing between the different ways we support and seek to focus providers on timely remediation of that non-compliance. The lower the level of assessed risk, the greater latitude a provider gets to address the non-compliance before we decide whether to exercise our formal enforcement powers. 

This then begged the question - how does the Commission determine that non-compliance is lower risk? Well, that assessment is based on what we have observed in relation to those receiving care and services, along with everything else we know about the service and provider from the information and data we hold about them. Importantly, that includes information about how willing and able a provider has previously been to accept responsibility for identified issues and deal with them. This goes to our level of trust in a provider. This will at times result in us rating the same category of non-compliance higher in relation to one service than another. The risk rating could be higher in one case because we have lower confidence in the provider’s capacity to address that non-compliance without close monitoring by the Commission. 

Through the many conversations I had with people from across the sector during the conference, I was so impressed by the commitment and care they all have for the people they care for. This was reflected by a general acceptance that the Commission has a very important role in taking firm and decisive action wherever there is evidence of immediate and severe risk to older Australians. Indeed, many providers told me that it is in nobody’s interest, including their own, for providers to remain in the system if they consistently disregard their obligations to consumers and demonstrate an unwillingness to continuously improve their services. For me that really underpinned the theme of the conference, as it confirmed that the regulator and the regulated have a shared value proposition focused on giving older Australians access to the very best care and services available!


Thanks to everyone who took the time to chat to me at the conference and I look forward to continuing some of those conversations in the year ahead. 

Until next time ...

Peter Edwards

Executive Director, Financial and Prudential Regulation

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