Why Aged Care Needs Strong Risk Management Leadership

April 30, 2021 - 4 minutes read

The Aged Care Royal Commission has completed its final report. Find out what aged care providers can do to strengthen their risk management and insurability

Woman with grandmother smiling

Woman with Grandma – image from Pixabay

After 2 years and more than 10,000 submissions, the Royal Commission into Aged Care Quality and Safety has produced its final report containing 148 recommendations.

The Commission found there were problems in aged care relating to substandard care, abuse, neglect, poor nutrition, understaffing, and lack of choice for care recipients.

Their recommendations include:

  • A new Aged Care Act by 2023 – with the objective of providing demand-driven, high-quality, safe support and care.
  • Greater choice for older people – giving them more control over the care they receive.
  • Stronger governance – through a new Australian Aged Care Commission that will centralise compliance and complaints, and set accreditation standards.
  • Workforce improvements – including better wages and minimum qualifications and staffing levels.
  • Increased funding – there is general agreement the system is underfunded and that improving it will cost more.

Aged care risk management

In light of the Royal Commission, Ansvar Insurance says that all aged care providers should be taking action to review and improve their risk management frameworks.

Senior risk consultant at Ansvar, Anthony Black, says this should not only be about meeting compliance but about being proactive in providing the best possible outcomes. He recommends that aged care providers assess their risk management frameworks in the four areas of governance and culture, resident safety, workforce, and financial sustainability.

Board membership is a matter that needs strong consideration in this. Ansvar says Boards should be actively recruiting for people with experience in care and social services and consumer-led clinical care, and not just for those with a background in medicine.

Another important aspect of risk management is to ensure that ‘dignity of risk’ is embedded into the culture. Dignity of risk refers to the rights of people to take reasonable risks when engaging in experiences. It is based on the premise that while safety is a priority, overly restricting residents could be detrimental to their wellbeing.

This approach requires a balancing act between managing risk and respecting the rights of residents. For example, if a resident makes a choice that is potentially harmful the organisation needs to help them understand the risk and discuss how it could be managed.

Summary of recommendations

Ansvar’s Better Risk Management for Good Governance document outlines the following four actions for aged care providers to take immediately:

  1. Review your risk framework – which includes evaluating risk maturity and developing a risk improvement plan.
  2. Raise risk management to the strategic level – involves ensuring strategic risk management has a strong focus at the Board and senior management levels.
  3. Reassess risks – requires assessing current and emerging risks.
  4. Rethink risk communication – including procedures, guidances and systems for reporting and managing incidents and risks.

Aged care insurance

Another point Ansvar makes is that it’s going to become more challenging for aged care providers to get affordable insurance unless they have mature risk management frameworks in place.

‘Risk maturity’ is a process of developing and integrating a framework, to embedding and optimising it. It doesn’t just happen – it can only come about through strong risk leadership.

For further reading

– Ansvar tells Aged Care Sector “Boards need to act now on Risk Management

– Aged Care Royal Commission – Summary of Final Report

– Ansvar’s Risk Consultant Anthony Black says “It’s time to think differently“.


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