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Struggling aged care sector needs urgent government support

Urgent calls are being made by the nation’s aged care and age services peak bodies that government changes to aged care funding arrangements are “in part” to blame for the latest figures and that immediate action needs to be taken and long-term plans made.

Research shows that 41 percent of Australia's aged care providers are recording a loss (Source: Shutterstock)
Research shows that 41 percent of Australia's aged care providers are recording a loss (Source: Shutterstock)

Aged and Community Services Australia (ACSA), the Aged Care Guild (The Guild) and Leading Aged Services Australia (LASA) have collaborated to share their concern for the future and sustainability of the sector, as well as sharing their suggestion on how to ease the impact of the situation which is “predicted to get even worse”, following the new data released by independent industry analyst StewartBrown that show a significant number of aged care providers across the country are recording a loss.

ACSA Chief Executive Officer (CEO) Pat Sparrow says a number of review of the Aged Care Funding Instrument (ACFI) have been commissioned and are still being considered by government, since changes were announced.

“Over 40 percent of aged care providers are now making a loss and many more are struggling to remain financially viable, particularly those in remote and rural area and providers looking after the most disadvantaged including homeless people,” Ms Sparrow explains.

“The sector now needs an urgent funding injection, such as an ‘adjustment payment’, while the longer term work on new funding arrangements is being undertaken.”

LASA CEO Sean Rooney says the peak body has been “advising Government” for the past year of the impact on residential care providers of the combination of rising costs and reducing revenues.

“Recent changes to government funding arrangements have cut deeper than anticipated and the ability of our members to deliver accessible, affordable, quality care and services to older Australians is now at serious risk,” Mr Rooney says.

“Consumers and providers need assurance and confidence in the aged care system and ensuring financial viability is fundamental to this.”

While raising concern over the current number of providers recording a loss, the figures also show that the 41 percent recorded for December 2017 is a 10 percent increase from 31 percent in 2015-16, also making predictions that the situation is going to get even worse.

“Estimates highlight that Australia will need another 83,500 beds over the next 10 years to meet the rising demand,” Aged Care Guild CEO Lee Hill says.

“This growth, and the future needs and expectations of older Australians, is far from being met.

“Given the observations in the Legislated Review of Aged Care about long-term sustainability of the sector, this needs to include broader discussions on sector sustainability across the full spectrum of revenue levers such as private, public and insurance products.”

All three peak bodies reiterate that they have been “consistent and clear” in their advocacy, informed by modelling and the Independent Legislated Review of Aged Care, that both an immediate injection and long term sustainable funding strategy are required and that “it’s now time for these calls to be heeded”.

Federal Minister for Aged Care Ken Wyatt says he acknowledges the report and has met with a member of the organisation and has had detailed discussions with them "about these matters".

"The Turnbull Government is committed to having an aged care system that supports senior Australians while ensuring aged care expenditure is affordable and sustainable," Minister Wyatt says.

"To progress this, we are examining options for long-term residential care funding reform.

"The Government has commissioned reports on options for funding reform and commenced a landmark Resource Utilisation and Classification Study (RUCS) of the sector to determine a solid evidence base on what drives care costs in residential aged care, both at the resident level and facility level.

"The study, which will take place during the course of 2018, will inform Government’s consideration of funding reform options."

Minister Wyatt adds that the Government is investing "a record" $18.6 billion in 2017-18 to support aged care consumers and the sector, with spending set to grow by around six percent a year, reaching over $22.3 billion by 2020-21. 

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