This week has offered a fascinating insight into how the Department of Health and Aged Care views the financial challenges facing the aged care sector – and it is not positive.
The comments – located on page 81 of an 85-page briefing document from the Community Affairs Senate Committee Budget Estimates 2022-23 released under Freedom of Information laws – present a far from flattering view of the sector and the media.
“Since 2018, leading peak organisations and the media have been telling us that urgent funding relief is required to prevent sector collapse. To date, we haven’t seen these scenarios eventuate,” it states.
While the DoH acknowledges that the sector has experienced “significant pressure” in recent years, it underlines that the Government component of funding – for care – has been in the black.
“While overall operating results for the residential aged care sector were negative, the care income result, where the majority of provider revenue is funded by the Government, was positive, with an average profit of $25.14 per resident per day,” they say.
They add:
“While the Government progresses structural funding reforms, residential providers should focus on administrative efficiencies and opportunities to increase revenue from accommodation to improve their financial performance.”
The document also references the changes to funding under AN-ACC; the new Pricing Authority; and the support provided under the various Government programs including the Business Advisory Service (BAS) and the Business Improvement Fund (BIF).
In short, the Government is doing its part to cover the cost of care and ensure the viability of the sector.
Instead, they see that it is up to providers to ensure that they are not incurring financial losses – and developing the efficiencies and services required to operate a sustainable business.
This does have its challenges given the limits on charging for accommodation and services in residential care – see the response from StewartBrown Senior Partner Grant Corderoy in the next story.
But what it does make it clear is that the message that providers need more funding is still falling on deaf ears.
The document does however suggest that the Government is open to operators charging more for accommodation – and consumers contributing more to their care.
“The Government is committed to a consumer contributions framework that is contemporary and progressive,” the document reads, adding that nationally, the median cost of residential care accommodation is only 58% the value of the medium house price.
Should the messaging to Government and the community be less about increased funding and more about charging for accommodation and services in a way that creates a fairer system for all?
