Remote aged care facilities are struggling financially to keep their doors open. They are not building new aged care beds and are being forced to send local ‘customers’ long distances to find a bed.
Rural people have always lived with adversity – droughts, floods, mining booms and busts. Town and land people always seem to have the strength and resilience to pull themselves through whatever the country throws at them.
But now, when they are in the twilight days of their lives, if they have lost that strength to look after themselves, many are facing a final let down.
Remote aged care facilities are struggling financially to keep their doors open. They are not building new aged care beds and are being forced to send local ‘customers’ long distances to find a bed.
They are leaving their home towns and family to be alone in unfamiliar surroundings and with people they don’t know. Not what we want as a society.
Costs don’t add up
It all has to do with money and volume of people.
According to a recent report about the financial viability of residential aged care – the influential Stewart Brown March 2015 Residential Care report – aged care facilities classified as ‘remote’ lose $23.15 for every bed they have occupied, every day of the year. This equals $8,450 a year.
The average remote facility has 31 beds so it will lose $262,000 a year.
This is not sustainable so they have to either close or limit their losses by sending people to other towns. They certainly will not be building more beds.
By comparison, larger rural towns make a profit of between $5 and $6 a day per bed. Not a lot (the cost of a beer or 1.5 coffees), but a profit just the same. Each resident will contribute just over $2,000 in profit a year.
They have an average of 70 beds, so they can make $140,000 over 12 months. Still not a lot when you consider they will have close to 100 staff.
City comparisons
Meanwhile, city beds earn an average of $13.14 a bed each day – nearly $5,000 a year. And the top earning facilities can earn up to $50 a day or $18,000 a year per resident.
How do they do it? They ask for bigger upfront payments – in the form of the Refundable Accommodation Deposit or RAD – to move in. The average city RAD payment you will be asked to front up with is $310,000, while in remote areas it is $205,000.
The result is remote care facilities will stay small and eventually have to close down because they wear out with no renovation and rebuilding plans.
Then all the elderly locals will have to leave their town and family. Distressing.
