If you read Regis Healthcare’s results on Monday, you may have seen what is an increasingly familiar theme across the aged care sector.
As we report in this issue, Regis’ Managing Director and CEO Dr Linda Mellors flagged two of the provider’s four planned developments – with over 200 beds – will remain on hold until the Government releases the new Aged Care Act and its response to the Aged Care Taskforce recommendations.
In this week’s issue of SATURDAY (in subscribers' inbox on Friday at 12pm), we speak to Baptcare CEO Geraldine Lannon about her organisation’s plans to grow to 5,000 beds – but only when there is certainty on future funding reform.
This caution is warranted.
With Regis now flagging the cost to build a new bed at over $500,000, that’s a $100 million investment with no guarantees that those beds will be worth more in the future.
You must ask: if our largest providers – with the balance sheets and confidence of the banks –don’t want to build, what hope is there for the rest of the sector?
21,000 fewer beds by 2030
It’s perhaps unsurprising then to also read this week that StewartBrown Senior Partner Grant Corderoy has forecast that operators would only build 11,500 beds in the six years to 2030.
With 32,000 beds set to close in the same timeframe, that’s an overall decline in beds of 21,000 – at a time when Australia is expecting an increase in the number of Baby Boomers requiring high-level care.
Operators tell us they want to build new beds and grow their businesses, but they also need to ensure their organisation is still here in 10-, 20- and 30-years’ time to service the next generation of older Australians.
As Linda concluded in her presentation to shareholders:
“It’s going to be very tight over the coming years.
“I think occupancy will go to being as close to full as the sector can be, because there just won’t be sufficient beds.”
Parliament is to resume on Monday, 9 September, with media reports suggesting that the aged care reforms will be on the agenda when the Coalition party room meets on 10 September.
It’s time to seal the deal and return certainty to the sector and the people that they serve.
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