Introduction

War veterans are valued and important members of our society. At 30 June 2004, there were almost half a million Australian veterans. The second of the Department of Veterans' Affairs' (DVA) five outcomes is related to health of veterans, and states that:

Eligible veterans, serving and former defence force members, their war widows and widowers and dependants have access to health and other care services that promote and maintain self sufficiency, well-being and quality of life.¹

Under this outcome, DVA works with providers, the veteran and service communities to ensure that programs meet the needs of veterans and serving and former members of the Australian Defence Force.² DVA provides a range of health and community care services for eligible veterans, including community nursing, in-home and residential respite, allied health services, home modifications and transport for health care.

Veterans' Home Care

One of the programs administered by DVA, which contributes to the health outcome mentioned above, is Veterans' Home Care (VHC). VHC was announced in the 2000-01 Federal Budget and commenced in January 2001. In 2004–05, the program's budget is $85 million.³

The aim of VHC, which is consistent with the Australian Government's general principle of supporting people to remain longer in their own homes, is:

to enhance the independence and health outcomes of veterans by reducing the risk of avoidable illness and injury and assisting them to remain independent in their own homes as long as possible.⁴

The objectives of the program are to:

• provide a comprehensive, coordinated and integrated range of basic maintenance and support services to eligible veterans;
•  provide flexible, timely services that respond to the health care needs of eligible veterans;
•  target eligible veterans not using services who are experiencing some difficulties with acts of daily living; and
•  close the loop in DVA's provision of holistic health care and support to the veteran community.⁵

Access to VHC is not automatic. To be assessed for VHC services a person must have a Gold or White Repatriation Health Card and be an Australian defence force veteran or mariner, or a war widow/widower of an Australian defence force veteran or mariner.

To deliver VHC, DVA has contracted with 29 Agencies and over 250 Service Provider organisations across the 54 VHC regions. DVA pays Agencies on the basis of a standard fee for assessment and coordination for each veteran, and pays Service Providers a standard fee for each hour of service provided to veterans. In addition, veterans pay the Service Provider a co-payment for each hour of service received.⁶

The services available through VHC are domestic assistance, personal care, home and garden maintenance, and respite care.⁷ In 2003-04 almost 70 000 veterans were approved for VHC services. The majority of veterans are approved for domestic assistance (85 per cent in 2003-04), while the majority of the almost four million hours in services approved were for domestic assistance (52 per cent) and respite (43 per cent). On average, veterans were approved for around 58 hours of services in 2003–04 at a cost of $1 235⁸ .

Audit objective and methodology

The objective of the audit was to form an opinion about DVA's management of the current and future demand for VHC services. To form an opinion, the Australian National Audit Office (ANAO) examined whether DVA:

• effectively planned the distribution of VHC resources;
•  distributed VHC resources according to its planning; and
•  monitored and evaluated how effectively it managed the demand for VHC services.

To form an opinion against the audit objective, the ANAO interviewed DVA personnel, examined DVA documents, interviewed personnel at a selection of Agencies, Service Providers and stakeholders, and reviewed relevant literature.

Key findings

Planning and coordinating VHC

In 2000, DVA developed a reasonable approach to estimate the number of veterans it expected to receive VHC services, and developed budgets for services based on this estimate. However, the ANAO found that there is scope for DVA to develop a comprehensive profile of the eligible VHC veteran population. By doing so, DVA would be in a better position to refine the budgetary model. In addition, a profile would assist DVA to identify eligible veterans and provide these veterans with information about VHC. Profiling would also assist DVA's planning for VHC and ensure that those veterans most in need are receiving VHC services.

Since VHC is a budget-capped program and veterans are not automatically entitled to receive services, DVA managed information about the program to ensure that it did not raise expectations which it could not meet. The ANAO found that while DVA has provided information to veterans, it has not evaluated whether this communication has been effective in reaching all eligible veterans or whether the information distributed was clear, accurate and appropriate.

One of DVA's main sources of data about VHC and veterans receiving services is the information entered online onto the standard veteran assessment form. DVA does not require contracted Agencies to ask veterans all questions on the form, which affects the consistency of data produced by the VHC systems. In addition, the ANAO found that DVA does not aggregate the information. Therefore, DVA does not maximise use of information gathered through the assessment form. This inhibits its ability to describe the characteristics of veterans in the program, evaluate VHC service levels, and plan for the delivery of VHC in the future. As part of its current review of the assessment form, DVA is considering these issues, including the number of mandatory questions on the form.

VHC is one of a range of community care programs available to veterans. The ANAO found that there were a number of factors that hampered effective coordination and integration of VHC and other community services. These included limited data about how veterans enter VHC and why they leave; the lack of strategies to move veterans to other programs when appropriate; and the absence of strong links with other relevant programs. Program coordination and integration are recognised as challenging issues across the community care sector. However, improved coordination between VHC and other services would assist DVA to achieve an integrated response to caring for veterans.

VHC budgets and fees

The ANAO found that DVA's method of distributing funds to Agencies to provide services was reasonable. For the first two financial years, regional budget allocations for service provision were based on the estimated number of VHC recipients in each region and an estimate of the cost of services. From 2002–03, regional budget allocations have been based on the actual number of veterans receiving services in the previous financial year and the actual cost of providing those services.

In the latter part of 2002, VHC service provision budgets came under heavy pressure. The ANAO found that the reasons for this pressure include the higher than estimated cost of providing services to veterans who transferred from Home and Community Care (HACC)⁹ compared to other veterans, and the difficulty of referring veterans to other programs, when appropriate. In response, DVA implemented a number of strategies to relieve the pressure on the budget and improve budget management. These strategies included: the introduction of a recommended benchmark of 1.5 hours of domestic assistance a fortnight; ceasing the grandfathering arrangements for veterans transferring from HACC; the ability to recredit unused hours of service; and the introduction of a notional budget buffer that allowed Agencies to approve services above their nominal budgets. The effect of these budget management strategies was a decrease in the hours of service approved nationally.

The ANAO found that DVA's primary financial control over payments to contractors relied on the Agency and Service Provider reporting to DVA when inaccurate payments had been made. Other financial controls were limited and did not prevent inaccuracies occurring in claims submitted by contractors.

DVA revised the fees paid to Agencies and Service Providers in 2003, increasing the fee amount and introducing an annual increment. DVA has not evaluated the effect of the fees model on the distribution and quality of services provided to veterans.

Assessing and approving VHC services

The ANAO found that the standard assessment form was adequate for straightforward assessments, but was not as effective for more complex cases, such as when the veteran had higher-level care needs, or hearing or cognitive problems. The VHC Guidelines, which were distributed to all Agencies, were clear and understandable and allowed flexibility to adapt to local initiatives. However, this flexibility meant that the VHC Guidelines did not contain details about how prescribed service levels should be applied, which caused uncertainty for some Agencies. Consequently, the ANAO found that some Agencies had developed their own service approval guidelines to supplement the VHC Guidelines, often without advice from, or in consultation with, DVA.

The ANAO found that there have been significant variations in service levels across regions. Possible reasons for these variations include, inter alia, regional differences such as locality and availability of other care programs and providers, and inconsistent application of the VHC Guidelines. The ANAO found that DVA has not analysed the available VHC data to identify why these variations are occurring, nor has it set boundaries within which it considers variations to be acceptable or valid.

The ANAO ascertained that veterans were assessed and received services in a timely manner, with the majority of veterans assessed within one week of referral and receiving services within three weeks of approval for services. However, DVA only collected waiting list data on veterans who were involved in some stage of the VHC process. It did not actively promote the program. Therefore, the ANAO considers that the number of veterans applying for assessment or services was limited This, in turn, limits the number of people waiting for assessment or services.

Monitoring and evaluating VHC

The ANAO found that DVA uses a number of mechanisms to monitor the quality of services, including contract management visits, reporting from Agencies and Service Providers, complaints and client surveys. Overall, the ANAO found that DVA's quality assurance mechanisms do not set parameters for controlling or monitoring variations in the program. When reviewing these mechanisms, the ANAO found that DVA's contract management visits to Agencies and Service Providers have been infrequent and that reporting from Agencies and Service Providers has been irregular. Complaints about VHC were, generally, relatively minor and were resolved quickly. However, the ANAO found that DVA did not collect and effectively use stakeholders' comments about the program.

DVA has not evaluated whether VHC is meeting its aim of enhancing the independence and health outcomes of veterans by reducing the risk of avoidable illness and injury and assisting veterans to remain independent in their own homes as long as possible. However, DVA has reviewed various aspects of VHC since its inception in 2001. The reviews reported that VHC had made a significant contribution to community-based aged care services in Australia. Importantly, DVA's Veterans' Satisfaction Survey reported high levels of satisfaction with the program.

Overall audit conclusion

DVA has taken some positive steps in developing a new approach to delivering services to veterans. VHC includes a standard assessment process, automated claiming for payment, and a standard fees model. Under VHC, veterans are assessed and, if approved, receive services in a timely manner.

At the start of the program, DVA estimated the number of veterans to whom it planned to provide VHC services. However, it did not estimate the likely initial demand for such services. During the first 21 months of the program the VHC budget was sufficient to meet demand for services. By late 2002, the demand was such that the VHC budget was under pressure. The main reasons for this were that:

• the information provided to veterans, Agencies, Service Providers and other stakeholders did not effectively communicate that VHC was not an entitlement-based program—veterans needed to meet the eligibility criteria and be assessed as needing services;
• the cost of providing services to veterans who transferred from HACC was higher than expected; and
•  it was difficult to transfer veterans to other programs when appropriate.

DVA responded to the rising demand and resulting budget pressures by introducing a number of budget management strategies. As a result of these strategies, the hours approved for VHC services decreased nationally.

DVA does not effectively collect and use data to assist it to manage the demand for VHC services. The limited reliability and accuracy of the available VHC data restricts DVA's ability to describe the eligible VHC population and to identify or explain variations in service levels between regions, and to assess and manage demand. DVA has not evaluated the effectiveness of its communication to stakeholders or whether it is meeting the program's aims.

This report makes seven recommendations aimed at improving DVA's management of the current and future demand for VHC services.

DVA's response

DVA agrees with the overall findings and recommendations of the ANAO report, in particular that DVA has taken positive steps in developing a new approach to delivering services to veterans. This conclusion highlights the Department's ongoing commitment to ensuring that eligible veterans, serving and former defence force members, their war widows and widowers and dependants have access to health and other care services that promote and maintain self-sufficiency, well-being and quality of life.

Footnotes

1 Department of Veterans' Affairs, 2005, Portfolio Additional Estimates Statements 2004-05, Department of Veterans' Affairs (Defence Portfolio), DVA, Canberra, p.33.

2 Department of Veterans' Affairs, 2004, Portfolio Budget Statements 2004-05, Department of Veterans' Affairs (Defence Portfolio), DVA, Canberra, p.57.

3 This amount excludes funding for respite care. Respite care is administered through VHC, but is funded separately. In 2003-04, $14 million was expensed on respite services through VHC.

4 Department of Veterans' Affairs, December 2003, Veterans' Home Care Guidelines, DVA, Section 1.2.1. Note: hereafter these Guidelines will be referred to as the 'VHC Guidelines'.

5 VHC Guidelines, Section 1.2.2.

6 The copayment is subject to certain limits and depends on the type of service received.

7 The services are defined in Appendix 2.

8 Includes respite care.

9 A veteran transferring from HACC is a veteran who was receiving services under Health's HACC program before transferring to VHC. When these veterans transferred to VHC, they retained their existing level of service. This is referred to as ‘grandfathering'.