41 per cent were in the red in December 2017 compared to 33 per cent in 2015-16, according to the latest data from independent industry analyst StewartBrown.
Even more are struggling to stay financially viable, especially those in rural and remote areas. The data shows 56 per cent of facilities in those regions are expected to report a loss in 2017-18.
It’s a sharp contrast to the headlines that argue aged care providers are putting profits before residents.
In fact, StewartBrown found the average facility is making a return of just 1.82 per cent.
But the direct costs of caring for residents and the number of hours spent caring for them are both going up.
How long can this be kept up though?
An unsustainable system
StewartBrown says the figures are directly linked to the current freeze on aged care funding by the Federal Government.
The Government is currently reviewing how it funds aged care after cutting $1.2 billion from the sector over four years back in 2016.
It deserves a review. Consider this – aged care providers receive a budget of around $260 a day to care for each resident. Hospitals receive $1,900 per day for a hospital patient.
If one in four of our hospitals was making a loss, it would be front-page news.
The quality of care in our aged care facilities should be the best. But for the system to do better, it needs cash – from the Government and from consumers.
With an estimated 83,500 beds needed over the next 10 years, it’s an issue that requires a long-term solution.
The Government is due to release its 2018-19 Budget next month however. Now is the time to contact your Federal member and demand that aged care gets a funding boost now – our frail and elderly deserve it.
Discussion2 Comments
Hi Jill
Collectively everyone can contribute .
Containing operational costs – to reduce outgoings will assist operators – redirecting the savings to employ people that care will benefit the aged by lifting quality of care & the operators to provide infrastructure.
Leaving philosophical arguments to one side -IE government Vs private / recipients responsibilities – as we travel through life increasingly government (agencies) leave a lot of THEIR responsibilities to private operators be it transport / energy / infrastructure / finance etc .
Specifically Chris tried to support operators in early days by introducing Solar program – was let down by equipment quality – i still admire his entrepreneurial spirit .
Again the time is right to (assist) offer energy saving solutions –
Their are very few viable operational ” Cost Reduction” systems available to the aged care sector.
Love your work
Steve & Jeff
Innovation
Aged care (along with disability) is one sector in which there are very few ways to make lots of profit, and that’s mainly due to the fact staff wages are the main cost (and we live in a high wage, low wage growth country). It’s very simple. If you want the best care, it costs time, effort, expertise and skill provided by dedicated individuals. This makes all the difference, not robots or apps or tangible products – in aged care, we see humans need connection and to be cared for. If people are going to complain on one hand there is not enough care, but yet not make the connection their taxes pay for it – that’s their own problem. The major complaint regarding aged care facilities are the fact there is not enough staff. There are plenty of ‘consultants’ and companies set up to take advantage of the so-called ‘windfall’ (good luck) however what is vital to the care of older people, is a workforce of boots on the ground compassionate workers who are paid a decent wage and see enough career opportunities to make it a viable and attractive sector.