There is still reason for hope that the Government’s response to the recommendations of the Aged Care Taskforce will put the sector on a more sustainable footing – despite Prime Minister Anthony Albanese ruling out changes to the means testing of the family home in Parliament last week.
Why?
As we outline in this issue, there are still a number of options that the Government can pursue to put in place Plan B – or increased consumer contributions for aged care accommodation and daily living.
Grant Corderoy, Senior Partner at StewartBrown and a member of the Taskforce, noted on LinkedIn following the Albanese comments that the LTCF only accounts for about 3.5% of direct care funding,
“Increased consumer contributions for everyday living (hotel) and accommodation services should not be affected by having no change in the assets/income test where the resident has the financial means (i.e. if the resident does not qualify as concessional or part concessional then they may have to pay an increased consumer contribution for these services) which is what StewartBrown has been advocating for a number of years,” he wrote.
In short, there is still room for non-concessional residents to pay a higher contribution for their daily living costs and accommodation.
New IHACPA pricing a significant development
There are also other developments that should have a positive impact on providers’ bottom lines.
Speaking to operators across the country, most are reporting full beds. The figures also show many providers are close to breaking even.
StewartBrown’s last survey showed that operators were making $18.26 per bed per day – or $6,664 a year, but losing $17.37 on hotel costs and accommodation (pictured below) – a problem that should find a solution in the Taskforce recommendations.
From August this year, the Independent Hospital and Aged Care Pricing Authority (IHACPA) will also be releasing the new AN-ACC price – to start from 1 October – which should also inject new funds.
Finally, there are the demographic changes – with an ageing Baby Boomer population and a shrinking taxpayer base, increased consumer contributions remains the only viable, short-term option for delivering the funding levels required for quality of care.
The banks have openly stated that they only require $12,500 per bed per year to justify investing in new stock.
With consumer and Government funding tipped to increase, the sector should be able to generate the revenue required to meet this target and access funds for refurbishments and new builds – a good reason then for the sector to maintain its renewed optimism.
It’s just one of the points that will be up for discussion at the LEADERS SUMMIT, now just four weeks’ away – 19 and 20 March at the Hyatt Regency, Sydney. Register now.
