With the ASX-listed provider announcing its first acquisition in four years, it appears that consolidation is accelerating as the ongoing reform agenda and continuing financial and workforce pressures see some providers wave the white flag.
As we report in this issue, Regis Healthcare has signalled its plan to expand its footprint with the strategic acquisition of family-run Queensland aged care provider CPSM and its five aged care homes.
The news follows Opal Healthcare’s entry into South Australia in August with the acquisition of Life Care’s five aged care homes plus two Melbourne homes in June.
Aside from the economic reality – it is far cheaper to buy existing beds than to build them – these latest transactions underline the increasing challenges – and opportunities – for providers.
In next week’s edition of SATURDAY, we will be reporting on some of the difficulties that the incoming aged care governance requirements – due to start on 1 December – are posing for operators, particularly smaller, private providers.
With 66% of residential care providers still recording an operating loss, we understand a number of operators are looking for the exit.
On the other side of the equation, it is now just six weeks’ out from the end of the year with the Aged Care Taskforce due to present its Final Report with future funding options to Government next month – including the option for Plan B, or increased consumer contributions for aged care accommodation and daily living expenses.
Minister for Aged Care, Anika Wells, has openly acknowledged the need for aged care providers to make a return on their investment and the need to drive capital into the sector.
If the Government can use the Taskforce’s recommendations to ‘reset’ the aged care funding model, those operators, such as Regis Healthcare, that can invest and grow their footprint in the near future should be well-positioned for this new system.
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