Home care providers' operating results rebounded in the July-September 2024 quarter after two quarters of declines as aged care accountants StewartBrown warn incoming changes to care management fees will put margins under pressure.
StewartBrown's Aged Care Financial Performance Survey Sector Report (Sep 24 YTD) shows the average operating result for home care operators for the quarter increased to $3.36 per client per day (pcpd), up from with $2.23 for the September quarter 2023.
Profit margins rose from 2.9% in the July-September 2023 quarter to 4.0% for the July-September 2024 quarter.
However, as we have covered previously in The Weekly SOURCE, StewartBrown estimates that the margin on service delivery will have to increase to more than 32% (from the July-September 2024 quarter's 13.6%) to maintain the current operating surplus when the 10% care management cap and removal of package management fees come in, a reform that has been delayed 12 months and will now com in from 1 July 2026.
StewartBrown estimates the loss of revenue due to the changes to care management and package management fees will leave providers $10.67 pcpd worse off.
Home care providers are operating with legislative uncertainty as they await further details of the Support at Home reforms due next month.
StewartBrown's Aged Care Financial Performance Survey Report September quarter 2023-24
Other notable points from the report:
- Home care provider hours spent on care management and administration increased 7% on average in the July-September 2023-24 quarter compared with the same period the previous year, while hours spent on direct care declined.
- Care management as a percentage of revenue increased to 10.4% of revenue, up from 10.2% of revenue in the July-September 2023 quarter.
- Package management revenue as a proportion of total revenue was 12.9%, up from 12.6% of revenue in the July-September 2023 quarter.
- The amount of unspent funds per care recipient now averages $15,221 per client, up from $13,164 per client in the July-September 2022-23 quarter. Unspent funds now total $4.2 billion.
- Consumer contributions to home care are low at less than 2.6% of total revenue.
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 our article on the StewartBrown report for residential aged care here. Read the report here.
