Chief Executive Officer's Annual Report 2014

Tuesday 28, October 2014

This is my twenty-first annual report, in which I will again try to relate some of the many and varied events and challenges that have occurred here at LHI during the 2013/2014 year.

Government Funding

I now know that I really am becoming a ‘grumpy old man’, because policemen are far too young, the years go by too quickly, and governments do not seem to know how to run the country, particularly in relation to aged care!

By the end of the year in review, the full impact of the dramatic changes to the Australian aged care system was very apparent. The combination of the increasing number of older Australians, together with the domestic economic challenges, compounded by the worsening world economic crisis and the political impasse, all contributed to a situation that was portrayed as inevitable, rather than debatable.

This inevitability was reinforced by one very interesting fact that emerged from a report by the Productivity Commission, published in November last year, which underlined how significant the change that is occurring in our population is:

“The number of people aged 75 years and over is projected to increase by about 4 million between 2012 and 2060 — an increase roughly equivalent to the current population of Sydney. The most striking illustration of ageing is the growth in the population of people surviving past 100 years of age. In 2012, there was roughly one person aged 100 years old or more to every 100 babies. By 2060, it is projected that there will be around 25 centenarians for every 100 babies, and by the end of this century, there will be more people aged 100 or more years than babies born in that year”. (Productivity Commission 2013, An Ageing Australia: Preparing for the Future)

This statistic highlights the scale of the challenge of the ageing population that not only faces the current government, but also all future Australian governments.

Given the increasing longevity of older people, together with the major advances in medical science, the issue for governments is going to be how to meet the cost of providing care and services to older people.

Therefore, from the 1st July 2014 the government introduced what it calls its ‘sweeping changes’ to the way in which fees are charged for anyone moving into care. It is still too early to judge the full impact of these new financial arrangements for Residents entering LHI’s Residential Care Facilities. At the time of writing this report, there have only been a relatively small number of new admissions. However, the new contractual obligations imposed under the new system, are proving very challenging, both for the applicants as well as the organisations providing their care.

In addition to the financial changes to the aged care system, the Treasurer also announced several other significant changes in his budget that will affect the majority of older Australians. In my early drafts of this report, I made specific reference to some of these proposed changes, including the proposed reduction in the aged pension; however the current political impasse in the Senate, together with pressure from the many lobby groups who have taken up several of the major contentious issues, is resulting in many of these proposals being further reviewed.

At the most recent National Aged Care Alliance meeting I attended, it was reported that the Federal Treasurer had announced that $55bn will be ‘taken out of the health budget over next 3 years’. Interestingly however, at the same meeting, it was also reported that Australians already pay more for health costs (as a proportion of household income) than in any other wealthy country.

The Abbott Government also announced, with only one month’s notice, that it was withdrawing the ‘Aged Care Dementia Supplement’, a payment introduced by the previous government to help defray the cost of additional services for residents who suffer from higher levels of dementia. The withdrawal of this special funding will mean a reduction in funding for LHI of $220,000 per year. The fact that this money is used to significantly improve the quality of life for those suffering from dementia did not seem to figure in the government’s decision-making process. Following significant lobbying by providers, and particularly the National Aged Care Alliance, the Minister has now agreed to consider some alternative funding system for severe dementia, but of course at a much reduced rate.

The extensive changes to the aged care system have, I believe, been unnecessarily further complicated for consumers and their families by changing just about every aspect of the aged care terminology that we have used previously. For example there are now three official government-funded levels of care for older Australians, these are, Home Support (formerly HACC), Home Care (formerly Community Aged Care Packages) and Aged Care Homes (formerly Aged Care Facilities).

Recognising the very obvious preference for our residents to remain in their own homes wherever possible, LHI has applied for additional licences to be able to provide Home Support Packages at all levels. Under the current Aged Care Approvals Round we have requested an additional thirty-five packages to help avoid the current situation of village residents having to request other ‘outside organisations’ to provide their care in the home.

Because of the complexity and significance of the government changes, David Phillips is in the process of giving presentations on the changes to the residents of both villages and we will continue to keep you as up-to-date as is possible. It is important to again reiterate though, that the aged care system is very much ‘tailored’ to each individual’s personal and financial circumstances, and therefore LHI recommends that residents obtain personal professional advice.

WorkCover

In his report, Richard Bartholomaeus has commented on the success resulting from the introduction of the new ‘Retro Paid Loss’ scheme at LHI. The new scheme was necessary to reduce the ever-increasing cost of Workcover premiums. An encouraging additional benefit from the new scheme has been the improvement in reducing workplace accidents at LHI. We thank Jack Kaleta, and more recently Helen Fregona, for their enthusiasm in this specialist area of work.

Glynde Bowillia Court Project

Recently, at the Master Builders Association Annual Dinner, our Bowillia Court project was the winner of the Best Medium Density Development (over $3M).  We thank Phil Auricht, Jan Law and Michael Vullings for their work on designing, building and managing the project.

Our builder, Kennetts, was also the recipient of the 2014 Commercial Master Builder Award.

All of the new Bowillia units were sold and occupied prior to the end of June 2014.

Management Accounts

The solid financial result for 2013/14 saw a surplus, mainly due to the revenue from the Bowillia Court project, together with increased interest income and the savings achieved through the introduction of the Retro-Paid Loss Workcover initiative.

However, there will be significant financial implications for the current 2014/15 year from the withdrawal by the government of the Aged Care Dementia Supplement, the lost revenue due to the Glynde Residential Care Facility refurbishment project (due to the necessary reduction in the number of rooms available for Residents) and the increase in the superannuation rate from 9.25% to 9.5%.

Despite the financial uncertainties for the coming year, the LHI Board has agreed to approve both the Capital and Recurrent Budgets as recommended by the General Management Team, for the 2014/15 year. However, we have given an assurance to the Board that, should our income prove to be significantly less than budget, we will take any steps necessary to reduce expenditure accordingly during the course of the year.

LCA North Adelaide Project

As many of you are aware, the Lutheran Church of Australia had previously announced that a plan was being developed to maximise the value of the Church’s North Adelaide land and properties, to better serve the mission of the church. I reported last year that LHI had contributed in-depth perspectives to the process, on aged care issues within the retirement environment. During the 2013/14 year LHI has not been involved in any further detailed planning for the North Adelaide Project, other than agreeing that two people associated with LHI could serve independently on one of the committees providing advice to the LCA.

Glynde Aged Care Facility Upgrade

During the previous year the LHI Board endorsed a project to upgrade approximately 40 of the Aged Care Facility rooms at Glynde. The estimated cost of the project is $3.4M over two financial years, 2013 - 2015. This work will complete the conversion of the older ‘Low Care’ rooms that began when the new Residential Care Buildings were added at Glynde as a part of the major building project in 2001. This work will mean that all Glynde Residents living in the Residential Care Facility (RCF) will be able to enjoy better and safer accommodation. The project will also minimise the number of occasions that Residents will need to ‘move rooms’ as their care needs change. The work is now well underway, with the first stages nearing completion. The builder commissioned to undertake the work is proving very capable and professional and is making great efforts to minimise the impact that the project has on the lives of the RCF Residents.

Refurbishment of Hope Valley North (The Vines)

As I write this report, the extensive refurbishment of Hope Valley North is nearing completion, despite significant delays caused by having to find a carpet manufacturer who was able to ‘match’ the carpets installed for the Hope Valley South project, only two years ago. New window dressings and furniture are also about to be installed, thereby completing the total refurbishment of the Hope Valley RCF.

Glynde Community Centre Project

I was invited, by Pastor Gerhardy, at a Glynde Bright Hour meeting earlier in the year, to announce that the St Andrews congregation had decided to transfer the ‘Title’ of the ‘hall property’ to LHI, thus facilitating the much anticipated redevelopment of the Glynde Community Centre. The news was well-received by all village Residents and the planning process is already proving to be a real ‘bridge-builder’ for our Glynde community.

Craig Vale (Arkvale Architects) has been appointed as the project architect and Craig, together with Julie Jensen (Masterplan), have attended both the June and August Property meetings, to provide the Board Committee with the opportunity for questions and clarification on aspects of the planning process.

At our request, Arkvale have held initial meetings with the St Andrews congregation representatives and Resident Committee representatives, to listen to their ideas and needs in relation to the proposed building. Both groups recently visited the Burnside Uniting Church, which is a very similar project that was undertaken by Arkvale Architects.

Board of Lutheran Aged Care Australia (BLACA) and the National Aged Care Alliance (NACA)

Over recent years, LHI has become a significant voice, within church circles, on aged care issues. As I have already mentioned in this report, it has become increasingly important, particularly at a national level, that the concerns and needs of older people are heard. Regrettably we have found that even the most senior decision-makers in government do not have any solid experience or knowledge of the real issues that face aged care.

There are now three LHI BLACA representatives, Richard Bartholomaeus, Colleen Fitzpatrick and I, who, together with Pasadena CEO, Matthew Johns, at the March BLACA meeting, were able to effect some significant changes to the way that BLACA operates, including changes to the budget and funding systems.

The South Australian representatives on BLACA also ensured during the year, that I was appointed as one of the two BLACA representatives on the National Aged Care Alliance, so that we could have direct input on aged care issues at this important national level.

Hope Valley Anniversary and Hope Valley and Glynde RSL Dinners

Richard Bartholomaeus and I were pleased to accept invitations to attend the annual Hope Valley Anniversary Dinner in February.

Similarly, I was also able to attend both of the Glynde and Hope Valley RSL Dinners during the year, both of which were well-supported by village Residents and guests. Our RSL sub-branches fulfil an important role in our LHI communities and, while memberships are declining, attending the dinners is a very special way of remembering those to whom we all owe a great debt.

All of these events were very professionally organised by our talented Residents, with excellent support from LHI’s creative Hospitality Department.

Village Care Quality Review (Accreditation)

Congratulations to the village care staff teams on the excellent outcomes from their first accreditation review. Similar to the RCF system, the villages are now required to undertake a three-yearly accreditation review programme. Just as with our RCF Accreditation, the Accreditation Auditors were highly complementary about LHI’s processes and services.

People & Culture Department

Our people are our greatest asset, and account for 75% of all of our expenditure. They are also our ‘first’ Strategic Priority. To reinforce the importance of our people to the organisation, during the year we restructured and added resources to the department that provides the professional and educational support to our staff, People and Culture.

People and Culture (formerly HR), now includes staff development, Payroll Processing, Safety and Rehabilitation, Volunteers, Lay–Chaplaincy and other formalities such as Personal Development Reviews, Police Certificates, Recruitment, Enterprise Agreements and Award Interpretation.  

Work Health Safety

During the year LHI completed a series of Workplace Inspections related to our Environment, Equipment and Fire and Emergencies. The results of the inspections were then reviewed by the LHI Safety Committee. The Work Health Safety Project Plan for Manual Handling has also been undertaken, as agreed with WorkCover, and has been reviewed for action by the LHI General Management Team. The LHI Board is kept informed on all Work Health Safety matters at their regular meetings.

LCA Leaders’ Meetings

During the year I attended two LCA Leaders’ meetings, representing BLACA. The purpose of the meetings was to consider current issues that were of importance to the LCA as a whole, and to bring together the leaders of the various church bodies to provide an opportunity to share their views and opinions. It was interesting to have insight into the various church ‘bodies’ and observe their individual relationships with the LCA.

Lutheran Retirement Villages Alliance and Lutheran Aged Care Residential Network

Throughout the year, we have again continued to actively support other Lutheran organisations. Most members of these organisations do not have access to the levels of expertise and experience that we at LHI, therefore we willingly share our knowledge and resources with them. Phil Auricht, LHI’s General Manger Assets, was again re-elected  Chairperson of the Lutheran Retirement Village Alliance, and is also a member of the SA District Aged Care Council, together with Megan De Vries, General Manager Residents Services for Hope Valley.

David Philips, General Manager Finance, and I continue to represent LHI on the South Australian Lutheran Aged Care Residential Network group.

Our Chaplains

Pastor John Hartwich

It was with great sadness, in June this year that we learned of the death of Pastor John Hartwich, who had served so outstandingly as Pastor at Hope Valley from 1993 until 2005. Pastor John’s contribution to the design and building of Trinity Church and the Community Centre was of particular significance, as was his achievement in ‘building’ the very special Hope Valley community, which continues to this day.

Pastor Noel Weiss

In August last year, we attended the funeral of Pastor Noel Weiss. Noel had been the ‘Honorary Assistant Pastor’ at Glynde for five years. We were thankful that we had been given the opportunity to formally acknowledge Noel’s contribution to LHI at a farewell, just a month prior to his death.

We give special thanks to God for the service to LHI of both Pastor John and Pastor Noel.

As reported by our Chairperson, Richard Bartholomaeus, the demands of chaplaincy at Glynde were proving beyond the resources of one person, therefore during the year, the Board approved the appointment of Chaplain James Ziersch. James has settled well into his new role and is a welcome additional resource in this important area of our services to our Residents.

Again therefore, we acknowledge and offer grateful thanks for the very significant service of our Pastors and Chaplains; Pastor Gallasch, Pastor McNicol, Pastor Gerhardy and Chaplain Ziersch. We also give thanks for the many retired Pastors residing in our villages, who continue to provide their support to the LHI Pastors and Residents, and also add so much to the spiritual environment at LHI.

Volunteers

Our volunteers again provided a wonderful service to our Residents throughout the year, especially to those in the Residential Care Facilities whose lives are so uplifted by seeing these wonderful people on a daily basis.

Kortin Norris, our Volunteers Manager, advised in his annual report to the LHI Board, that the number of hours donated by our volunteers in the Residential Care Facility during the twelve months from July 2013 until June 2014 was almost 21,000 hours.

The latest volunteer statistics also reveal that, for the first time, the number of volunteers that are from the wider community is slightly higher than the number from within our villages. This is an encouraging trend for the future, as approximately twenty percent of our volunteers retire each year. We thank Kortin for his ongoing work in this area.

The time that volunteers so gladly give to LHI in the Residential Care Facilities, continues to average just under 1800 hours per month (420 hours per week).

In addition to the RCF volunteer hours, are the many more hours given by the volunteers who, every day, undertake innumerable roles and tasks within our villages. All of these people add so much to the quality of Residents’ lives, and we thank them for their generous Christian service.

Please continue to encourage fellow Residents, family and friends to donate their time, however little, to volunteering at LHI.

To all volunteers in all areas and departments of LHI, we offer our most sincere thanks.

Resident Committees

Our Resident committees continue to inspire and encourage our LHI management team.

During the past year, both committees have worked tirelessly to represent the villages on a range of issues, not only to LHI, but also to the local councils and the wider communities that we associate with. At Hope Valley the committee has not only successfully replaced their village bus, but are also well on the way to repaying the loan that they obtained to fund the project. The success of the Hope Valley bus project has also encouraged the Glynde committee to begin the process of replacing their bus.

As always, with both committees, I have again admired the enthusiasm and interest displayed at their monthly meetings. I offer my sincere thanks to the two Presidents, Betty Mattiske at Glynde, and Jocelyn Thomas at Hope Valley, as well as their respective committee members, for their ongoing commitment, support and advice. I thank all of those who have served on the committees during the past year and look forward to continuing to assist them throughout the year to come.

Our village communities continue to raise funds and provide voluntary services to their respective communities. The efforts of the Coffee Shop, Village Disposals, Recycled Treasures, Corner Shop, Recycling Sheds, Card Shops, Craft groups, Market Days, Samaritan’s Purse and many more, are outstanding. To everyone who has contributed in any way to the success of these ventures, please accept the heartfelt thanks of the Residents, staff and the Board for all the time and effort that you have given during the year.

Lutheran Women of South Australia

During the past year, our Glynde Ladies Auxiliary of the Lutheran Women of South Australia has again provided outstanding service to LHI through organising several fundraising events in support of the Glynde Residential Care Facility. The events organised by the LWSA do not just raise money for the selected projects, they also bring additional and welcome events to the social activities of the village. During the past year the LWSA focused on providing additional ceiling mounted lifting equipment for individual RCF rooms. To the LWSA President, Mrs Marina Fielke, and all of the lady committee members, we again offer our sincere thanks.

LHI Management Team

To our General Management Team, Phil Auricht (GM Assets), John Boland (GM Hospitality), Megan De Vries (GM Resident Services Hope Valley), Julie Le Cornu (GM People and Culture), David Phillips (GM Finance), and Yasmine Ruyssen (GM Resident Services Glynde), I can again only offer my personal thanks for your continuing loyalty, support, wisdom and enthusiasm. Our journey has not been easy during the past year, but has been made the more enjoyable by your company.

To our very special LHI staff in all departments, who continue to be challenged by the ever-reducing funding and increasing workloads, I can only say that you have really been a very special gift to our organisation. Thank you all, and may God continue to bless you in all that you do.

Our Board

To our Board, particularly our Chairperson, Richard Bartholomaeus, who we all acknowledge as ‘the rock’ upon which so much of our LHI history is built, and whose unfailing support and advice has meant so much to me personally, I again offer my sincerest thanks. We are truly blessed to have Richard leading the LHI team and we pray that God will continue to bless us with his support for many more years to come.

Richard leads a very special team of Board members, all of whom continue to freely contribute to the success which is LHI. To Richard, Bryon Andretzke, Dr David Burrow, Mark Fielke, Colleen Fitzpatrick, Tony Materne, Robert Newcombe, Cathy Oster and Geoff Thiel, you have all continued to freely contribute your considerable expertise and knowledge throughout the past year. Our special thanks to you all.

As always, it is impossible to thank and acknowledge every one of the many individuals and groups who have contributed to our successes during the past year. Without your faith, support and goodwill, we could not have achieved all that we have. Thank you all.

Better Practice Award – The year under review concluded with the announcement in Sydney that LHI Retirement Services had been awarded one of only two National Awards for Better Practice in South Australia. The LHI project was developed by our Food Production Team, under the leadership of John Boland, General Manager Hospitality, together with Food Production Manager, Andy Greer, who had decided that the traditional practice of providing ‘vitamised’ meals to Residents with eating disorders, living in the Residential Care Facilities, was no longer acceptable and required a more sophisticated and practical production system that would make a real difference to the appearance of the meal, as well as the dignity of the Residents.

For me, this, the fifth Better Practice Award presented to LHI, sums-up the real success of our organisation. We are here to make a real difference to the lives of those entrusted to our care. We will continue, wherever possible, to demonstrate and develop better practices that will benefit not only LHI residents, but also those who live in other facilities throughout Australia.

May He, who knows what is truly in our hearts, continue to bless all of you, and all that we do here at Lutheran Homes, in His name.

“For if God is for us, who can be against us?”

Tim Gray

September 2014