‘Unsustainable’ sector as population ages

A new report, released last week, found aged care operators are facing deficits of up to $62 per bed, per day for services in modern agedcare homes.

The report, prepared by Grant Thornton Australia, was commissioned by a consortium of industry peak bodies and providers, including the Aged Care Association of Australia, Aged and Community Australia and Catholic Health Australia.

The cost of construction, land and fit-out for new residential agedcare centres is almost $226,000, or a capital cost of $73 per bed day, according to the report.

While nursing and support care costs are about $144 a day, operators will reportedly be left with a revenue deficiency of up to $62 per bed, per day.

Catholic Health Australia chief executive, Martin Laverty, said the report’s findings show the aged care system was not only “unsustainable, but also on its last financial legs”.

New South Wales community-based seniors lifestyle and care provider IRT backed the findings of the Grant Thornton Australia report showing the returns generated by aged care providers is preventing further investment in building new facilities.

IRT chief executive, Nieves Murray, called for urgent reform across the aged care sector, and urged government to implement the reforms recommended from the Productivity Commission’s Caring for Older Australians report.

“Without long-term financial security across the aged care sector, investment will not meet the demand to create the quality communities seniors need. The current funding model for residential aged care is out-dated and it is not in keeping with the expectations of today’s seniors – who want modern amenities including individual rooms with ensuites,” Ms Murray said in a released statement last week.

“A secure future for aged care residential services can only be provided if flexibility is introduced into the funding arrangements. The Productivity Commission has called for the removal of distinction between low and high care places, and that change will allow providers to deliver more targeted solutions for seniors.”

According to Ms Murray, the Wollongong Local Government Area  will see a 72% increase in people over the age of 65 years in the next 25 years, and by 2047 there will reportedly be a four-fold increase in the number of people aged over 85 years.

“As an industry we need to be prepared to respond to the demands of the community and widespread reform is the only way we can achieve it,” she added.

The Productivity Commission last year called for an overhaul of the agedcare sector to ensure it can meet the needs and expectations of the rapidly ageing Australian population.

Following extensive public consultation, the government is still  to officially respond to last August’s Commission report.

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