In the July to September 2024 quarter, residential aged care providers were preparing their rosters for higher care minute targets, due to take effect on 1 October.
However, with Government funding for the higher staff bill not kicking in until the targets took effect, providers' earnings took a hit, according to StewartBrown's Aged Care Financial Performance Survey Report for the period.
The average operating result for residential aged care providers surveyed for the quarter was a deficit of $8.45 per bed day (PBD), compared with a surplus of $0.85 for the same period the previous year.
The decline is only expected to be temporary however, says StewartBrown.
"Providers' financial results are expected to improve for the remainder of FY25 due to increased funding levels," the 52-page report states.
Over the quarter, 59% of aged care homes operated at a loss, compared with 50% for the same period the previous year.
Residential aged care losses were made in the delivery of everyday living and accommodation services, with accommodation the heaviest drag on results.
The reforms in the new Aged Care Act include additional funding streams for these services through being able to charge higher Refundable Accommodation Deposits (RADs) without requiring approval and increased consumer contributions for non-clinical care (from 1 July 2025).
Other notable points from the report are as follows:
- Aged care facilities providing additional or extra services increased from 18.3% in FY22, 25.7% in FY23, 33.8% in FY24 to 36.7% in the July-September 2024 Quarter Survey. "More facilities are now adopting additional services to help alleviate the losses being incurred in this area," the report states. However, it also notes, "Revenue from additional services on their own are not sufficient to reduce the everyday living margin deficit."
- With the full amount for the hotelling supplement from July 25 yet to be advised by the Independent Health and Aged Care Pricing Authority (IHACPA), StewartBrown is recommending a supplement of more than $20 pbd as "reasonable".
- More providers are preparing food on site, with 74% of aged care facilities now using internal catering services only in the July-September 2024 quarter, compared with 65% in the July-September 2022 quarter. The Aged Care Quality and Safety Commission has increased its focus on food and nutrition in residential aged care.
- The use of agency staff decreased in the September 2024 quarter to 8.7%, compared with more than 10% in 2023-2024.
- Occupancy rose to 93.8% of available beds for mature homes, up from 92.6% for 2023-24 - the latest result almost a return to pre-COVID19 levels. Occupancy was 93.9% in the July-September 2020 quarter (see main image).
- Care management, allied health and lifestyle staff minutes decreased in the July-September 2024 quarter compared to the same quarter the previous year. Allied health, lifestyle officers and enrolled nurses will be added as new staffing Quality Indicators from April 2025, which is likely to cause an increase in the numbers for these staff. Providers, residents and allied health staff have told StewartBrown "over a number of years" they are concerned about the levels of funding and use of allied health, the report notes.
StewartBrown's survey includes 1,205 aged care homes, just short of 100,000 aged care beds, 206 aged care providers, and 77,555 Home Care Packages.
Read the report here.
