The Local Paper - Kellock Lodge Report - July 5, 2018

Page 00- The Local Paper - Wednesday, July 11, 2018

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Special Report

Kellock directors slug it out ■ Kellock Lodge Director Ian Davis says the public meeting attended by 380 people last month was “misinformed”, with its organisers determined to “stir up trouble”.

Mr Davis supplied this letter to The Local Paper: “Kellock Lodge was established to respond to an identified community need, the care of the elderly.

“Sadly the recent divisive debate about the future of Kellock Lodge has had little to no focus on those Kellock Lodge supports, other than to provide them with misinformation and create fear about the Approved Provider’s (Trustees of the Anglican Diocese of Wangaratta’s (Trustees)) intentions.

“The Town Hall meeting on Friday, June 22, generated much emotional heat, very little light and much misinformation.

“The topic was money, money, money but no mention of resident care, other than to dismiss significant non-compliance.

“The current proposal for a single legal entity with a single board is a result of a three-month process between the Kellock Lodge Board of Manangement (Board) and the Trustees.

“The process it self is a result of the Trustees’ deep interest in, and legal and moral obligations for resident care.

“The Trustees, via their Chair the Bishop of Wangaratta, have been encouraging the Board for three years to understand the significant changes in the aged care industry and respond; this intensified after the events at St John’s Village.

“The events of the past six months – seven unmet Outcomes related to clinical care and a Notice of Serious Risk – underscore the inadequacy of the Board’s responses to the Trustees reasonable and eminently sensible requests.

“I would encourage all interested people to take the time to understand the seriousness of the non-compliance at Kellock Lodge and Kellock Lodge’s financial position (it is significantly deteriorating due to funding changes in aged care).

Seriousness of non-compliance: “In late 2017 the Approved Provider requested multiple times the Board take steps to ensure compliance with the Accreditation Standards.

“At least one request included the offer of consulting support to do so.

Due to an inability to objectively assess our operations and the Board's mode of operation history shows us these requests were not acted on in any meaningful way.

“As predicted by the Approved Provider the Australian Aged Care Quality Agency (AACQA) conducted an UNANNOUNCED VISIT, two in fact. One in January and one in February 2018. Kellock Lodge failed on seven critical care Outcomes.

“Finding the initial response to this non-compliance unsatisfactory the Approved Provider appropriately established a quality working group to address the significant non-compliance. It saddens me to say the Approved Provider’s comprehensive and through approach was not welcomed by all Kellock Lodge Directors.

“The work of the consultants engaged has proved to be absolutely essential and instrumental in getting

‘The community owes Bishop Parkes its profound gratitude and praise for striving to bring resident care to the forefront and for initiating the hard conversations about the status of Kellock Lodge, not the jeers and cat calls emanating from a misinformed meeting called to stir up tr ouble trouble ouble..’

● Ian Davis, pictured as a Crucifer, in the Kellock Lodge publication: The First 30 Years Kellock re-accredited within the for themselves. timeframe set by the regulators.

“The non-compliances, as re“At the Town Hall meeting the ported in this public reports, were: speakers glossed over the failed out1.8 Information systems comes as deficient paper work.

This expected outcome requires “That would be O.K. if residents that "effective information managewere paper cut-outs, which they are ment systems are in place". The not. report found “Staff do not have ac“They our some of our commu- cess to current, accurate and consisnities most elderly and frail who tent information to guide care and Kellock Lodge and the Approved service delivery.”

Provider have a legal and moral ob2.1 Continuous imrovement ligation to care for.

“This expected outcome requires “In partnership with the Approved that "the organisation actively purProvider initial steps have been taken sues continuous improvement". The to address these non-compliances. report found “Management do not “However work to embed these take active steps to address deficits changes will take further significant emanating from clinical trends or time and resources. audit results.”

“People should also ask them2.4 Clinical care selves why Kellock Lodge’s own “This expected outcome requires auditing did not pick these failures that "care recipients receive approup BEFORE the AACQA found priate clinical care". The report them? found “Care recipients do not con“Interested people can visit sistently receive clinical care in acwww.accqa.gov.au/publications/re- cordance with identified need.” ports and search for Kellock Lodge 2.5 Specialised nursing care to read the publicly available reports needs

Mik sues Mikee Manning is issues challenge tto o Ian Da vis Davis ■ Kellock Lodge Director Mike Manning has replied to fellow Director Ian Davis’s statement, and his reply includes a challenge.

“I have read Ian Davis’s outline of his view of the discussion regarding the health and financial side of the proposed takeover of Kellock Lodge by St John’s Retirement Village.

“I don’t want to get into a financial tit for tat with him except to say that his whole argument of current and non-current liabilities and their basis is absolutely flawed.

“Where bonds and lease premiums are concerned, every organisation bases their current liability on historical data not on the same comparative percentage between organisations.

“I think Ian’s consultants might be trying to confuse the matter.

“As to the unmet outcomes, I thought we have already acknowledged that we not only needed to, but did accept the findings of the Aged Care Quality Agency and have implemented the changes and are still doing so as a matter of continuous improvement.

“It is interesting that a current board member of Kellock Lodge is prepared to pinpoint failings here in his own organisation which he is duty bound as a director to preserve and protect, and yet try to use one-sided history as an argument to justify being taken over by another organisation where double the failings in actual care occurred and multiple casualties because of it.

“I guess we can argue these matters till we are blue in the face and not agree, but I will issue a challenge to Mr Davis.

“If he can advise this community of the current cash at bank and realisable liquid assets (investments) of St John’s Retirement Village at say May 31, 2018, I will This expected outcome requires that "care recipients' specialised nursing care needs are identified and met by appropriately qualified nursing staff". The report found “Care plans and directives relating to the management of individuals specific specialised nursing care needs are, at times, incomplete.”

2.7 Medication management This expected outcome requires that "care recipients' medication is managed safely and correctly". The report found “The home’s medication system does not consistently ensure care recipients’ medications are managed safely and correctly” and “Staff do not consistently have access to current and accurate information relating to care recipients’ medication needs.”

2.10 Nutrition and hydration This expected outcome requires that "care recipients receive adequate nourishment and hydration."

The report found Kellock Lodge did not meet this Outcome 2.14 Mobility, dexterity and rehabilitation This expected outcome requires that "optimum levels of mobility and dexterity are achieved for all care

● Mike Manning in good faith re-assess my opinion of the financial status of St John’s Village based on that information.

“I can say that at May 31, 2018, Kellock Lodge cash at bank and term deposit holdings are approximately $9.2 million.

“We may have a couple of hundred thousand dollars in the bishop’s consulting fees that had to be paid in June but this figure will not be far off the mark.

“Once again, it is amazing that none of the current board members of Kellock Lodge have any idea of the current financial status of St John’s, 12 months after the warning provided by their auditors and yet the four current members are still hell bent on joining with them in such a takeover. No due diligence – no nothing. Absolutely unheard in any business decision making. Back to you Ian,” Mr Manning said. recipients". The report found “Post fall monitoring does not consistently occur with staff not recording neurological observations”.

“The AACQA reports show the Board and management has failed to ensure the minimum standards have been complied with. As a collective the Board must engage meaningful with the problems of Kellock Lodge and the legal structures we work within (i.e. Kellock Lodge is an organisation of the Anglican Diocese of Wangaratta), not attack those who have assisted us to undertake steps to remedy significant non-compliance.

“Much has been said in support of retaining local control of Kellock Lodge.

“Local control has delivered us to the position Kellock Lodge is in today.

“Local control has been unable to objectively assess the organisation’s compliance with minimum standards.

“Local control has been unable to objectively assess the organisation’s performance and health.

Continued on next page

Page 00 - The Local Paper - Wednesday, July 11, 2018

www.LocalPaper.com.au

Special Report: 2 ● From previous pafe “Discussions about a new way are difficult, however having such discussions does not diminish the great achievements of the community over the years in being a partner in the development of Kellock Lodge as some commentary suggests.

“The financial position; the following explanation by accounting experts highlight the accounting differences between St John’s Village and Kellock Lodge.

“Once this is understood it is clear that St John’s Village’s financial position has been misrepresented, creating great unnecessary fear amongst residents and ILU owners.

“In the aged care industry, it is expected that residents will exit the facility and have their entry contributions (used here to refer to bonds/ RADS for residential aged care residents and entry contributions for ILU owners) refunded at this time.

“It is also common that another resident will take their place in a short space of time, replenishing cash balances by paying an entry contribution.

“In our financial models, we allocate 30 per cent of resident’s entry contributions as a current liability and 70 per cent as a non-current liability.

“This is a common allocation methodology among other facilities that we have worked with as their resident turnover rate is around 30 per cent.

“This means that 30 per cent of all their residents that are present on July 1 will have left the facility by June 30 the following calendar year.

“As the average length of resident stays reduce, then the allocation of entry contributions to current liabilities will increase.

“In St John’s 2017 audited financial statements, the resident’s RADs, (Refundable Accommodation Deposits), Bonds and other entry contributions are classified as 100 per cent current liability.

“Kellock Lodge, in their 2017 audited financial statements, classify their resident’s entry contributions as 8.8 per cent current liability and 91.2 per cent non-current liability.

“If St John’s Village were to take Kellock Lodge’s allocation approach, their current liabilities from their 2017 Financial statements would be reduced from $45,473,506 to $4,001,668.

“Conversely, if Kellock Lodge were to classify 100 per cent of entry contributions on their balance sheet as current liabilities ($7.173M) then their current liabilities would total $7.895M which is larger than their current assets total of $7.217M. “There is also significant misunderstanding about the cash Kellock Lodge holds.

“As of March 2018 in round figures Kellock Lodge was holding $10.5M in cash.

“Offsetting this cash holding is $7.7M in residential aged care bonds/ RADS (liabilities) and $2.3M in ILU deposits (liabilities).

“The current practice of the Board is to hold the full dollar amount in cash to cover these liabilities.

“This leaves $500,000 in free cash. Not a significant amount for an organisation with $4.3M in revenue (for 2016/2017 financial year) and 30+ years of operation and a great need to invest further to ensure quality care.

“I anticipate the financial reports for the 2017-18 financial year will reflect a very similar position.

“Kellock Lodge’s use of residential aged care bonds/RADS is regulated by the Aged Care Act 1997 and the ILU deposits by the Retirement Villages Act 1986.

‘It is disappointing though that some directors, and community members, have chosen to ‘shoot the messenger’ rather than engage constructively to ensure Kellock Lodge remains a sustainable and vibrant service providing care for our most frail and elderly.’ - Ian Davis

● Ian Davis. Photo: Alexandra Community Pharmacy/Facebook “This would continue to be the cent of facilities were making a loss, agement have been aware of the true case for any new legal entity. with rural and regional facilities suf- state of Kellock Lodge’s financial “Kellock Lodge’s annual profit fering the most. position for many years and underwas $731,366 for 2015-16 financial “This is forecast to increase to stand the changes in the aged care year, $390,934 for 2016-17 and in over 50 per cent of facilities in 2018. industry.

2017-18 there will be a considerable “It is because of these financial “So why the resistance to change, loss, not all of it attributable to the challenges and other reasons that why the attacks on those who have significant consulting resources en- since the 1990s the number of resi- sought to help and strengthen Kellock gaged to rectify the non-compliance. dential aged care organisations has Lodge?

“There is also an anticipated loss fallen from approx. 3000 to approx.

“Why not engage on the issues in 2019 as well. To date the Board 930 today. and work together to strengthen has not been able to raise the per bed“Less organisations delivering Kellock Lodge? day figure to break even. more care. These are figures that “Mr Maurie Pawsey, in his un“Kellock Lodge, like all residen- should make all of us pause and ask dated letter to the Productivity Comtial aged care facilities is significantly the hard questions about Kellock mission, written about six years ago, challenged by the current government Lodge’s ability to survive on its own. states: reforms and funding.

“Interestingly the evidence is out “There are often quoted minimum “Industry benchmarking shows there that past key office bearers of levels of residents (beds) at which a that as of December 2017 41 per the Kellock Lodge Board of Man- small rural, stand alone, aged care

facility can be viable. These range from 80 Beds to 120 Beds.

“He further states: The general view, supported by much evidence, within the Aged Care Industry is that funding is inadequate and as also mentioned above, certainly small rural facilities are not seen to be viable (unless supported by a Hospital or another large institution) unless Bed numbers exceed 80 and in some quarters 120 Beds.

“Kellock Lodge operates 50 beds and 14 ILUs! “Alexandra and surrounding communities are ageing. The demographics show there is a clear need for aged care and Kellock Lodge is well placed to provide this with the right governance, management and systems.

“The Approved Provider’s proposal will bring significant benefit to Kellock Lodge and therefore Alexandra and surrounds elderly and frail.

“Two examples are: ■ Stronger leadership and governance by a professional board with specific aged care and health care expertise ■ Combined resources to use to develop stronger clinical care frameworks, systems and processes which will improve the quality of care delivery “With appropriate changes in place to address the challenges Kellock Lodge will always be here, it might just even be better!

“It will operate with much better senior management enhancing the security of the resident and ILU residents.

“The local community will still be able to contribute as donors, volunteers, directors etc if they wish.

“The need for the community to support Kellock Lodge will not diminish.

“The recent joint announcement by the Murrindindi Shire Council and Trustees is a positive step forward that will hopefully shift the discussion from decisive debate to acknowledgement of Kellock Lodge’s significant issues and calm discussion about how to address them.

“A board makes decisions as a collective and as such all directors are responsible for the current status of Kellock Lodge.

“It is disappointing though that some directors, and community members, have chosen to “shoot the messenger” rather than engage constructively to ensure Kellock Lodge remains a sustainable and vibrant service providing care for our most frail and elderly.

“In everything we say and do we must keep front of our mind the people Kellock Lodge supports, something not all people have done in presenting their concerns to the community.

“The community owes Bishop Parkes its profound gratitude and praise for striving to bring resident care to the forefront and for initiating the hard conversations about the status of Kellock Lodge, not the jeers and cat calls emanating from a misinformed meeting called to stir up trouble,” Mr Davis said.

He added: “This letter expresses the views of Ian Davis only. It does not represent the view of the Kellock Lodge Alexandra Inc Board of Management, any other Kellock Lodge Directors, the Trustees of the Anglican Diocese of Wangaratta, the Bishop of Wangaratta, or any other individuals or organisations.

“I have been on the Kellock Lodge Alexandra Inc Board of Management since 1989,” Mr Davis said.