Cam Ansell, the advisory firm’s Managing Director, has warned while the Government’s aged care reforms are good news for residential aged care operators, they will fall short on incentivising small and medium-sized providers to build new homes.
In a five-page opinion piece ‘Aged Care Bill 2024: what will it mean for investment in aged care?’ accompanying Ansell Strategics’ latest Board Pack, Cam (pictured) argues big providers will benefit from the legislative changes to accommodation – i.e. the higher $750,000 threshold for Refundable Accommodation Deposits – across their existing homes.
“For smaller providers, we consider the risk too large and the returns too low for new developments based on current construction costs (unless the development forms part of a larger investment in alternative, complementary service models),” he states.
With few incentives in the new Aged Care Bill 2024 to drive large-scale investment – and changes to means testing increasing the cost of an aged care bed for non-supported residents – Cam points to an increase in alternative models, such as self-funded or Support at Home-funded homes and retirement villages.
“The next decade will be the most exciting and challenging period in the history of the aged care sector,” he added.
The piece backs Cam’s presentation earlier this year at the LEADERS SUMMIT, which forecast that private aged care models in a retirement village setting would be the growth service for operators.
The 18-page Board Pack, which covers the first quarter of 2025, also highlights how the Government’s funding changes could impact on the sector, with the level of merger and acquisition activity in both the aged care and retirement village space at a high.
In addition, the report provides a comprehensive snapshot of regulatory reforms, operations and compliance, funding and financing, and workforce issues across the sector.