Residential aged care and home care operators were more profitable in Q1 FY24 than they have been in years after the introduction of AN-ACC, the latest Department of Health and Aged Care's Quarterly Financial Snapshot (QFS), released today reveals.
The QFS compares Q1 FY24 with Q1 FY23 because it factors in the important reforms that have occurred between those two periods, including:
- the introduction of AN-ACC funding (1 October 2022)
- the Fair Work Commission's 15% pay rise for direct care workers (1 July 2023)
- the Fair Work Commission's 5.75% increase in the minimum wage (1 July 2023)
- the introduction (1 July 2023) of a new $10.80 per resident per day hotelling supplement, indexed to $11.04 (September 2023)
In addition, the 24/7 RN requirement came in from 1 July 2023.
However, the QFS says though care is fully funded, some providers may be using care funding to cover losses in everyday living and accommodation, according to Department of Health and Aged Care analysis.
"The analysis shows there is an opportunity for improvement in these areas to increase the financial viability and sustainability of the sector, including providers pricing accommodation appropriately. [The Aged Care] Taskforce has also considered these issues, in line with their Terms of Reference," the QFS states.
The sector is waiting on announcements of what the future financial reforms will be - in particular on increasing consumer contributions for those who can afford to pay more for aged care services, with a safety net remaining for those who can not - Plan B, which The SOURCE has been advocating for over two years.
Brief summary of the Q1 FY24 results below.
Residential aged care
2622 For Profit and Not For Profit residential aged care providers made a collective net profit before tax of $178.2 million in Q1 FY24 - equating to a net profit before tax of $10.36 per resident per day, an improvement of $38.25 per resident per day result on the Q1 FY23 result.
Revenue increased by $82.36 per resident per day, and expenses increased by $44.12 per resident per day from Q1 FY23 quarter - primarily due to the AN-ACC funding increase - Q1 FY23 quarter was the last quarter under the Aged Care Funding Instrument (ACFI) funding.
COVID-19 grants also increased in Q1 FY24 to $378 million up from $58 million in Q1 FY23.
Expenses are expected to increase over the remainder of FY24 as providers collectively write-off approximately $1 billion in bed licenses amortisation by 30 June 2024.ro
Home Care
913 For Profit and Not For Profit home care providers returned a collective YTD net profit before tax of $129.2 million.
Q1 FY24 EBITDA per recipient per day increased to $6.14, up $0.57 on Q1 FY23.
The Home Care Packages (HCP) subsidy rate increased by 11.9% from 1 July 2023 to cover the Fair Work Commission's 15% pay rise.
However, the number of home care providers reporting a positive EBITDA fell slightly to 76.7%, down from 80.3%.
As of 30 September 2023, total Unspent Funds climbed $0.55 billion to more than $3 billion.