Home care profits increase despite decline in revenue

Home care providers reported increased profits in the March 2023 quarter as revenue declined and expenses declined further. 

For Profit and Not For Profit home care providers collectively made a net profit before tax for the year to date to March 2023 of $214.1 million, according to the Department of Health and Aged Care’s latest Quarterly Financial Snapshot.

The result equates to For Profit and Not For Profit home care providers recording a year-to-date net profit before tax of $3.65 per recipient per day, up $0.06 from the six months to December 2022.

For the March quarter, For Profit and Not For Profit home care providers collectively made net profit before tax for the March quarter of $75.7 million, or a March quarter net profit before tax of $3.74 per care recipient per day, up $1.41 per care recipient per day from the December quarter.

Three quarters (74.5%) of home care providers delivered a before tax profit for the 2022-23 financial year to date, up from 73.8% as of the December 2022 quarter – meaning that more than one quarter reported a loss.

More than three quarters of home care customers (75.7%) were delivered services by profitable providers.

Data for the three months to March 2023 was the first available since the introduction of capped fees for care and package management. Level 3 and 4 care management fees increased to 17% per home care package, which is now consistent with Levels 1 and 2 and below the 20% cap. Level 1 and 2 package management fees increased to 11%, which is one percentage point higher than Level 3 and 4 (10%), and below the 15% cap.

Unspent funds decreased by $30 million to $720 million.

The SOURCE: More businesses are becoming home care providers – the profits are small.