“Thanks for your enquiry. Australian Unity declines to comment to (sic) your enquiry or respond to the report you refer to (sic)”.

That’s a pity because it would appear that Australian Unity has been exploiting frail and elderly Australians and the government’s home care system as well. Of course, a “no comment” does not constitute proof of guilt; but it surely gives rise to suspicion.

Australian Unity is a large private health insurer. It also runs retirement villages and has burst onto the Home Care scene, profiteering from its elderly customers and, like the banks in the Royal Commission, charging for services which were never provided.

Not just overcharging a little either. According to sources, Australian Unity charged one elderly customer “over $600 per month for case management during the period (18 months) when the client had no case manager”.

Another client was charged more in “administration” and “case management” fees ($1,276.50) than the cost of providing the actual home care service ($1,251.46).

These, amid a litany of other things. Australian Unity is believed to be Provider M in this report to the Aged Care Royal Commission from Dr Sarah Russell of Aged Care Matters.

Home Care: operators snipping 50pc fees from the elderly in home care

Alas, there is a “no comment” from Australian Unity, which claims to be a mutual; a not-for-profit whose aim is to benefit the community and its mutual members.

A perusal of its financial statements though suggests otherwise. High executive salaries, superannuation for directors, an acquisition binge and a billion dollars worth of borrowings on the balance sheet; these collectively tend to suggest that Australian Unity is an exercise in corporate aggrandisement rather member benefits.

Profit after tax has shot up from $29 million to $51 million over the past five years while revenues have grown from $127 million to $176 million.

Non-executive directors pay rose again last year to a collective $1.2 million while the top 7 executives shared $7 million between them.

“Profits are put back into the company to benefit members, customers and the community,” claims Australian Unity. “Members, who are typically customers, can participate in the governance of the company (e.g. electing the board of directors)”.

If these things are true, then why is the Commonwealth Home Support Programme (CHSP) being squeezed so hard for profits and why are frail and elderly customers being grossly overcharged too?

If they really “participate in the governance of the company”, they ought to boot these directors out and get some new ones who would act in their interests. For right now, they are being treated as CGUs … Cash Generating Units.

Frail and elderly customers or Cash Generating Units?

This from the notes to the 2018 accounts:

“Revenue growth assumptions for the CGU (Cash Generating Unit)
have been determined at 30 per cent in FY19 and between 8-9 per cent over the four-year plan period.

“The projected growth in FY19 is largely underpinned by the full year benefit of new HCP (Home Care Packages) and NDIS clients obtained during FY18, together with government-announced growth
in HCP and NDIS packages expected in FY19.

“The key assumptions that underpin the recoverable amount are: revenue growth across HCP and NDIS including continuity of CHSP; and achievement of forecast operating margins across the business.”

Translating this financial jargon, Australian Unity is really saying, “We expect to keep on killing it as long as the government keeps forking out taxpayer dollars”.

As with other corporate welfare operators on the taxpayer teat, Australian Unity maximises its returns by high leverage. Finance costs on its $1 billion in borrowings last year came in at $21 million.

Management fees were $93 million, while its “Independent & assisted living fees, subsidies and development activities income was $359 million, from $374 million prior. This, which would appear to include Home Care fees is Australian Unity’s biggest revenue stream after private health insurance premiums.

Some $58 million was paid in commissions last year, an apparently large figure for an institution claiming to be a not-for-profit. Observers could draw a similar conclusion from the $6 million in fees paid to PwC over the past two years for audit and tax advice.

It’s an industry thing

Australian Unity is by no means alone. Dr Russell’s report describes myriad abuses,¬† a very long tally in maladministration, over-charging and poor treatment of customers.

For instance, both Sacred Heart Mission (St Kilda) and Wesley Mission (both not-for-profit providers) took over 50 per cent of level 2 package in case management and admin fees.

How much case management is really required to arrange three hours of care per week (cleaning and shopping that is)?

Charging out at $60 an hour for unskilled workers is common too. One provider even charged charged $607.56 in case management and administration fees to supply an outing valued at $130.22.

Report calls for “Visibility” as bankers swarm around Aged Care

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