With five years of significant operating losses in residential aged care homes, the StewartBrown Aged Care Financial Performance Survey Report calls on the Federal Government to supply emergency funding to keep providers in operation.
Despite the additional Basic Daily Fee supplement of $10 per day, the residential aged care sector is, as summed up by a CFO at the StewartBrown Aged Care Finance Forum in Sydney on Tuesday, “haemorrhaging”.
Operators are now losing $14.67 per bed day on average, up from $8.43 12 months ago, and to add to the problems, the occupancy of beds in RACs is down to an average of 91%. StewartBrown admitted it excluded homes with bed occupancy rates below 80% from its report.
Two-thirds of aged care homes were operating at a loss during the last financial year, which is far worse than the average loss of $8.43 per bed day in 2020-21, when 58% of homes made an operating loss.
StewartBrown Senior Partner Grant Corderoy (pictured) said the financial sustainability of providers is “critical”.
“To avoid closure of homes and reduced service delivery, especially in regional locations, an emergency funding package is needed in the short term to ensure current viability and allow for the necessary funding reforms to be properly implemented,” he said.
The report said the residential aged care sector has sustained significant aggregate operating losses for the last 5 years totalling an estimated $3.787 billion, with $1.443 billion being the FY22 forecast.
If that is grim reading, the figure excludes State/Territory government owned homes, which “have a considerably worse financial result, lower occupancy, and often a lower standard of accommodation.”
Mark Butler, Minister for Health and Aged Care, blamed the situation on the previous Federal Government, which in May last year committed to a “once in a generation” $17.7 billion aged care package over the next four years.
“We’re confident that what we’ve put in place already is going to alleviate that pressure (the new AN-ACC funding model). We’ll obviously have to see that operate for more than a couple of weeks.
“We’ve got a range of other reforms we’re committed to introducing. There’s already legislation in the parliament to make sure that every facility has a registered nurse on duty 24 hours a day, seven days a week, additional staff in 2024. So, this is an absolute priority of the Albanese Government,” he said on Tuesday.
