The shortfall in new aged care beds that need to be developed over the next five years was a dominant theme at the Aged and Community Care Providers Association (ACCPA)’s National Conference yesterday and there are no easy fixes despite the political spin.
In her address which we report on in further detail here, Minister for Aged Care Anika Wells spruiked the number of aged care providers progressing on new developments, naming Opal HealthCare, Regis Aged Care and Mercy Health.
“By setting the aged care system on a more sustainable financial footing, we hope to improve the sector's financial viability and attract more private investment,” the Minister said.
The message, summed up by ACCPA CEO Tom Symondson, was that while the reforms will deliver the framework for sustainability, they will not be a panacea.
With a forecast 40,000 beds needed in the next six years according to StewartBrown and a greenfield aged care development taking five-plus years to get off the ground, the maths just doesn’t add up.
What are the alternatives?
As StewartBrown Senior Partner Grant Corderoy told the audience, it will all come down to accommodation – namely operators’ willingness to charge and also educate the customer on the need to contribute to their accommodation costs.
The fact the new Act green lights lifting the ceiling on Refundable Accommodation Deposits (RADs) to $750,000 starting from 1 January 2025 indicates that the Government is keen for operators to move on this measure sooner rather than later.
But as we report in this week’s issue of SATURDAY, our conversations with operators suggest many are reluctant to increase prices when the New Year arrives.
However, with the average RAD sitting around $500,000, below even the current $550,000 cap, there is opportunity for operators in metropolitan locations to reconsider their pricing.
What about regional operators?
Lower housing prices and higher levels of supported residents typically rule out higher RADs, say CEOs, which is where Government will need to come to the block funding party.
Otherwise, those ‘grey ghettos’ will be here sooner rather than later.