ACCREDIATATION – THE RESIDENTS’ PERSPECTIVE

2. A CRITICAL ANALYSIS OF THE AUSTRALIAN RETIREMENT VILLAGES ACCREDIATION (ARVA) SCHEME.

What is ARVA? Confirmation that a Village has voluntarily achieved compliance with a set of standards derived within the Industry, primarily by Aged Care Qld (ACQ) and the Retirement Village Association (RVA)

The process includes self-assessment by management; resident input by survey; inspection visits to the village by ARVA surveyors; staff and resident interviews, and submission of a survey report and recommendation. Evaluation by the National Accreditation Committee (NAC) follows.

3. ACCREDITATION

A broad definition of Accreditation could be: A system of Quality Control (QC) derived from a Quality Assurance (QA) plan aimed at measuring compliance with standards.

The ARVA Handbook is more precise; stating that the Scheme is a quality program developed to promote and enhance quality assurance and best practice standards and procedures.

Herein lies a major problem; ie the difference between quality assurance, and quality control. Consider the following:

4. QUALITY ASSURANCE v QUALITY CONTROL

A simple definition of any quality assessment process is:

“A system of Quality Control derived from a Quality Assurance plan.”

The precise wording from the COD is:

Quality Assurance: – the development of procedures designed to ensure that a product meets a specification or standard. Positive declaration that a process is true & correct.

Quality Control – the examination of the product to confirm compliance to the standard. Concerned with the maintenance of high quality.

In lay terms, the QA plan is developed before production commences and is based on the requirement to ensure the specifications as prescribed in the Legislation are met. On the other hand, the QC assessment processes commence at production and are designed around the requirement to verify product integrity. Specifically, in order to verify compliance, the QC Standards must be precise and then be effectively applied.

In the ARVA Scheme this compliance to the Standards is measured against set criteria. However, the measurement is sometime subjective, and not always supported by documentation. The criteria should not be considered achieved merely because village staff, in the self-assessment phase, state that a system is in place to review disclosure documentation; or a Solicitor advises, by letter, that all regulatory requirements have been met.

PRACTICAL EXAMPLE

Let me illustrate the result when a QA plan does not include the essential elements of the specification; or the QC criteria do not adequately encompass the process.

Practical, visual example. Two sticks!!

Design specification states: diameter, length & material.

Production starts concomitant with the Quality Control process, which then confirms that the product meets the specification, ie the designer’s requirement.

Compare two similar sticks.

However, if the original design specification omitted the length measurement, the standards developed during the QA process would be flawed. The QC process would then reveal a different product.

Compare short & long sticks.

The question then is “Are the ARVA Standards sufficiently detailed to ensure that the compliance requirements have been met?”

5. ARE ARVA STANDARDS SUFFICIENT

Consider now these standards.

1. Developed within the Industry by ACQ and RVA.

2. Set the minimum level of compliance necessary to obtain accreditation.

3. Address best practice standards, consumer protection and the need to maintain the viability of the Industry.

4. Confirm or reject. Basis of each is the need for regulatory compliance.

5. All 27 must be achieved.

So far, so good! But wait, note that there has been:

6. Minimal, if any, input from Residents representative. (At least none during development of the criteria. Some input perhaps during the survey process); and that

7. The Primary aim is to enhance marketability

6. THE ACCREDITATION STANDARDS

Each standard appears to have been developed around the tenets of the RV Act and related documentation such as: Disclosure Statements/PID’s and Prospectus & Sales & Marketing Literature

These standards certainly cover all aspects of village operations; they appear to be all-encompassing; and are inviolable. Meet the criteria; achieve Accreditation; fail one criterion, no Accreditation. Thus all standards are of equal significance or weighting.

Is this equal significance appropriate?

7. COMPARE THE FOLLOWING

Compare the importance of conforming to the financial management system dictated by RV Act Ss102a, 129B, 106, 112 etc, as implied by Standard 2.2 (Regulatory Compliance), versus the Social Activities criteria listed in Standard 1.7. The latter should be relatively easy to achieve, and is far less important than the former which is more complex and of far greater significance. Yet each has the same influence on the Accreditation decision.

Achieving Accreditation certifies that a Village voluntarily conforms to all 27 standards. However, such a certification does not guarantee that the Village conforms to the Compulsory regulatory compliance prescribed by the Legislation.

Accreditation is not required for a Village to meet any Operational requirement, and the process would become redundant if the mandatory requirements were enforced.

Recognising that this compulsory compliance is prescribed by the Act, why then is it necessary to have a system supplementary to the mandatory requirement?

7a. RETIREMENT LANE

The major problem with the ARVA Scheme arises because the Standards have been developed without adequate recognition of the QA requirement. When these shortfalls are then reflected in the criteria an inaccurate assessment results.

How many villages fail to achieve Accreditation for regulatory non-compliance? Is renewal ever refused? During FY08/09, the Association processed more than one hundred complaints related to breaches of Contract, financial mismanagement, failure to adopt best practice standards, and inadequate preparation and presentation of budgets. Although many complaints were related to the RV Act, not one would have influenced an application for Accreditation because there are no criteria in the Standard to assess such arisings.

8. MANY COMPLIANCE REQUIREMENTS ARE NOT ASSESSED

An examination of several Residence Contracts and Public Information Documents for Accredited villages reveals a number of clauses inconsistent with the RV Act. Remember, the QA plan (the ARVA ethos) has been developed from the tenets of the RV Act. Also, the Standards criteria reflect elements of other Legislation. Consider now the following examples.

The Exit Entitlement for a Former Resident must be paid no later than 14 days after the settlement day. RV Act S63 refers. Yet, some PIDs submitted as Annexes to Standard 1.1 advise a 28 day waiting period. Minor, Yes – Compliant, No

Several Operators refuse to accept that MRF funds must be managed as prescribed in RV Act S97-101. How then could the Standard 2.2 Regulatory Compliance be met where such a major inconsistency exists.

Other examples of non-compliance with Contractual obligations, Financial arrangements and Regulatory requirements are:

MRF as a component of the GSC

Co-mingling of financial accounts

Tardy presentation of GSC budgets

Failure to disclose to residents PID inaccuracies having material effect.

Introduction of new Services without reference to Residents.

On-charging to Residents the cost of Capital Improvements

Failure to advise of Insurance excesses

Notwithstanding these criticisms, it is not my intention to denigrate the ARVA Scheme. To do so would be counter-productive and to perhaps appear to be arguing against the need for Consumer Protection. The ARQRV supports the ethos of total compliance with the legislation and would applaud any system able to guarantee that compliance. Obviously there are benefits to be derived from an effective accreditation scheme, notwithstanding that the compliance is not mandatory. However, for Residents to recognize and accept these benefits, the Scheme must be more widely supported within the Industry. Moreover, the qualification process must encompass residents’ requirements, particularly those elements that provide residents with positive control over, or significant involvement in, management and financial processes.

Residents view Accreditation as an inferior duplication of the Compulsory compliance mandated by the RV Act. Moreover, they consider the Scheme to be primarily a Sales/Marketing tool, and of limited Operational benefit to the Village and themselves.

Residents have little if any input to the process, especially for revision of standards. Residents are aware that the ARVA Scheme does not enjoy widespread support within the Industry. Is this lethargy an indication of Operator indifference to a voluntary system, a concern about the cost of the Scheme, or an unwillingness to expose their systems to external scrutiny?

10. WHAT NEEDS TO CHANGE

That said, what needs to change before residents can accept the ARVA Scheme as a credible, effective method of measuring compliance with the standards?

Obviously, the Scheme needs an enforcement capability. Currently, the only penalty for non-compliance is: No Accreditation. However, a penalty system is unlikely to be viable, or indeed acceptable, in a voluntary scheme.

Can we conclude therefore that the solution is Compulsory Accreditation, as mandated by the Aged Care Act? I think not! Most Operators would resist such a system as an unnecessary imposition on their operations. Residents would continue to view it as a duplication of the regulatory compliance requirements already in place.

I have illustrated that it is possible to achieve voluntary accreditation, but not meet full regulatory compliance standards.

So we have the situation where, for sound reasons, Operators reject linking Accreditation with Compulsory compliance, and do not support introduction of a penalty system.

On the other hand, Residents do not accept voluntary Accreditation as an adequate guarantee of full regulatory compliance, or as meeting their Consumer Protection needs.

The solution is to enhance the ARVA Standards criteria so that the revised process ensures full regulatory compliance.

When Residents experience the benefits of this total compliance, acceptance of the Scheme will follow.