AN-ACC pricing and the associated cost of meeting care minute targets will drive aged care operations into deficit, says Darren Birbeck, the CEO of Not For Profit SA aged care provider Resthaven.

“The current funding just doesn’t cover the care minute targets that we’re now legislated to achieve,” he told The SOURCE.

In May we reported that aged care accountants StewartBrown predicted the government's increased funding for the 15% pay rise would not be sufficient to cover the mandated care minutes which came into effect on 1 October 2023.

Darren compared the funding envelope to a cheap fitted bed sheet. “It just doesn’t meet all the corners of what we’re being asked to achieve,” he said.

“Even though the reforms have been funded, I would say not fully.

“It comes down to care costs... accommodation and indirect care isn’t fully funded.

“As the sector tries to meet the 100% minutes, I can see that the actual direct care costs are going to move into deficit. Quite simply, there’s not sufficient funding to cover the care minute targets in my view.”

“When the initial AN-ACC base price was announced, we calculated that the cost of meeting the new target direct care minutes significantly exceeded the additional funding received through AN-ACC,” Darren said. “Our view has not changed since that time and our Budget for this year reflects that.”

However, Darren is “encouraged” by the Independent Hospital and Aged Care Pricing Authority (IHACPA) and the work the Aged Care Taskforce is doing.

The Taskforce has been asked to develop funding recommendations to make aged care funding more equitable and fairer. Members have consistently backed higher contributions from consumers, a measure DCM Group has been advocating for now for two years with Plan B.

 “With 66% of homes already operating at a loss, there is an urgent need to address the fundamental discrepancy between the cost of achieving the target direct care minutes and the AN-ACC funding received,” he said.