The sixth report from the UTS Ageing Research Collaborative (UARC) has reinforced the challenges facing the sector and Government in meeting the growing demand for new beds and tightening staffing requirements.
The 134-page ‘Australia’s Aged Care Sector: Full-Year Report 2023-24’ acknowledges that residential aged care saw a “modest improvement” in its financial performance in 2023-24, driven by increasing occupancy and additional Government funding for direct care and wage rises.
However, over half (51.3%) of residential aged care homes continued to operate at a loss, with an average deficit of $3.07 per resident per day.
The gap between the best and worst-performing homes is also widening, with the operating result of the Top 25% of homes $102.39 per resident per day higher on average than the Bottom 25% of homes.
36% reduction in building activity over four years
With residential aged care providers losing at least $3.86 billion since 2019-20 (see below), the sector has seen a 36.4% slowdown in building activity in the last four years to just $3.6 billion in 2023-24.
“The declining investment in new and refurbished aged care homes is leading to a crisis in care availability that cannot await a two-year review,” UARC’s Chair Professor Mike Woods (pictured above right) wrote in his foreword.
Interestingly, Mike notes that while much of the losses in residential aged care have been the result of inadequate Government and taxpayer funding for accommodation, many providers have also failed to set viable prices for their beds.
“Even after the changes recommended by the Aged Care Taskforce are implemented, the revenue structures for accommodation will require further attention to ensure a sufficient supply of residential places to meet demand,” the report adds.
For Profit operators falling behind on meeting care minute requirements
UARC also flags that while the viability of direct care services will likely continue to improve via increases in AN-ACC, the Government and regulator are hardening their expectations that the increased funding is used to meet staffing requirements.
As of June 2024, only 40.5% of homes had met both their care minute targets, meaning 59.5% of operators are still below the required staffing levels.
Like StewartBrown, the report notes that while the number of Government and Not For Profit homes meeting care minute targets has increased, the compliance rate of For Profit homes has plateaued – see below.
“It is beyond disappointing that a significant number of residential care providers are still failing to deliver the level of care required by their residents as calculated under the care minutes regime, even though they have been fully funded to deliver that care,” Mike wrote.
“At the same time, UARC recognises the failings of mandating inputs such as care minutes rather than specifying outcomes, the workforce challenges facing the sector, and the efforts of most providers to meet and in some cases exceed their mandatory obligations.”
With the UARC data showing that aged care homes that meet or exceed the care minute targets continue to report much greater operating losses, is it any wonder that operators are not willing to drive their organisations into the red to comply?
You can read the full report here.
