Financial industry analyst, StewartBrown, created the report, Aged Care Financial Performance Survey, finding the current funding model is under strain with yearly results for residential care and home care showing a decrease in performance.
The financial deterioration in aged care began in the 2017 financial year, says the report.
Additionally, the last few years has shown an overall plateau in Aged Care Funding Instrument (ACFI), which allocates Government subsidy to providers delivering residential aged care services.
The report also asserted that the $320 million one-off funding boost provided by the Federal Government earlier this year has had little effect for residential care providers. The next survey to be released late in June will include the impact of this 9.5 percent additional funding.
LASA Chief Executive Officer (CEO) Sean Rooney, says the report shows a concerning deterioration in the performance of national residential care homes, making them financially vulnerable and could affect the sustainability of some aged care providers.
Mr Rooney says, “This report highlights the need for urgent funding relief to address the increasing demand for services and acuity of residents, while the work on longer term sustainable funding arrangements is being undertaken.
“We have long been advising the Federal Government of the impact on residential care providers of the combination of rising operating costs and stagnant revenues from government.
“Now, with the financial viability of so many aged care providers at risk, it is not unreasonable to expect that Australia’s aged care system is adequately funded to be sustainable and to meet the needs of older Australians.”
The report states that residential care is underfunded and that nearly 50 percent of facilities are operating at a loss.
The figure is much higher in regional, rural and remote areas, with residential care underfunded by more than 67 percent.
Home care is experiencing similar problems to residential care with a continuing decrease in financial performance.
The report believes the level of unspent funds is still the biggest issue with Government funded Home Care Packages.
Mr Rooney wants the Australian Prime Minister, Mr Scott Morrison, to hold to his promise of aged care being a top priority for the Government.
“Now, he needs to demonstrate that by taking urgent and meaningful action to ensure providers of aged care are adequately funded to meet the needs of frail and vulnerable older Australians,” says Mr Rooney.
“Aged care is an issue of national importance and older Australians deserve a sustainable and world class aged care system, and that means world class funding.”