The Aged Care Taskforce, chaired by Minister for Aged Care Anika Wells and created in the Federal Budget in May 2023, made 23 recommendations in its Final Report, advocating for increased contributions from people not on the Age Pension.

Stephen Becsi, CEO of specialist aged care provider Apollo Care, which owns 12 sites, 11 in regional areas, told The Weekly Source there are four key recommendations.

He said the Taskforce recommendations are needed to increase and diversify revenue streams and keep the doors of regional aged care homes open. He said the following recommendations must be accepted by the Albanese Government:

• Recommendation 10: Funding for daily living needs to cover the full cost of providing these services. It is recommended this be composed of the Basic Daily Fee and a supplement.

• Recommendation 13: Require providers to retain a portion of the RAD in the near‑term to make an immediate improvement to sector financial sustainability.

• Recommendation 14: Review the Accommodation Supplement, including improving incentives to meet the accommodation design principles. "That's really important," Stephen said. "If you've got design principles that are stating you need to do this, this, and this in a building, the building costs are going to be expensive. Someone's got to pay for it."

• Recommendation 23: Improve communications between the Independent Health and Aged Care Pricing Authority (IHACPA) and providers and participants regarding its pricing advice and decisions, and task IHACPA with a review of its pricing in rural and remote areas.

"If the government wants to provide residential aged care in the towns, it has to allow the Taskforce recommendations to happen," Stephen said.

"The Taskforce recommendations are absolutely needed for regional because without it, it is not a viable service or business."

To illustrate the point, Stephen said AN-ACC funding, which is meant to cover the cost of care, does not cover the costs of agency staff, particularly in regional areas where the cost of temporary staff is triple that in cities. The costs to providers will only go higher as homes move towards compliance with mandatory targets, he forecast.

Aged care accountants StewartBrown, in their March quarter Aged Care Performance Survey Analysis Report, said almost half (49%) of MMM4 (medium rural towns) homes failed to meet 24/7 RN requirements, and agency usage for RNs, enrolled nurses and personal care workers all increased in the March 2024 quarter.

"If you don't physically have human beings in the bush, the only way you can deliver that care is you've got to pipe it in temporarily through agency," Stephen said. One of Apollo Care's homes has agency rates of more than 60%.

Agency staffing

With direct care labour costs ($209.71 pbpd) making up 75% of direct care revenue ($277.04 pbpd) in the March quarter 2024, 9% ($18.62 pbpd) of that direct care labour cost amounted to agency costs, according to StewartBrown.

The average hourly rate of RN agency staff in the March 2024 quarter was $128.52, compared with $82.21 for internally employed RNs.

The lead image of this article shows how heavily the agency staff cost burden falls on rural and remote aged care homes, which are spending $37.84 pbpd on agency staff. Inner regional homes are spending $28.85 pbpd. 

By comparison, agency costs in the cities are $11.36 pbpd - less than one third the rate in rural and remote areas.

With 52% of rural and remote homes and 62% of regional homes operating at losses (compared with 44% in the cities), the situation for regional homes is unsustainable.

"It doesn't take a rocket scientist to understand it's the regions that are being hurt," Stephen said. "It's agency costs that are killing regional aged care." 

But as providers employ more staff, particularly RNs, to meet mandated care minute targets, operating results will be further eroded. 

"As providers continue to work towards meeting their mandated direct care minutes, the direct care margin will continue to deteriorate to a level that will not be able to be sustained without increases to other revenue streams," StewartBrown said.

A PIONEER: STEPHEN BECSI at the LEADERS SUMMIT 2024

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