The latest results from accounting firm StewartBrown’s quarterly survey are here and with no new funding for aged care in recent months, as expected, the news isn’t good.
51% of the 984 aged care homes in the survey – which covers 40% of aged care facilities in Australia – had an operating loss (negative earnings before tax) for the quarter ending September 2019.
Facilities in outer regional, remote and very remote areas were the worst off with 65% of homes reporting an operating loss and 47% making a cash loss.
In metropolitan areas, these losses were 47% and 22% respectively.
Why are so many homes making losses? StewartBrown says put simply the cost of providing care – paying staff (which makes up 75% of costs), providing services, and administration and support – is exceeding revenue.
During the quarter, facilities spent $8.25 per bed day more than they earned.
The report adds that while country areas are most affected, all regions now have homes running at a loss – and an urgent remedy is needed.
There are no easy solutions here.
Peak body Leading Age Services Australia (LASA) has been calling on the Government to provide a $1.3 billion cash injection to the sector to keep providers afloat for the next 18 months.
But that will not repair a funding model that is clearly not doing its job.
The Government is currently trialling an alternative model – called the Australian National Aged Care Classification (AN-ACC) funding assessment tool – which was developed by the University of Wollongong and is designed to redistribute the current funding more equitably.
However, it doesn’t provide an increase in the overall amount of funding the sector receives – around $20 billion in 2018-19 for both residential care and home care services.
The Royal Commission into Aged Care is due to examine funding this year and how it can be improved so those who can contribute to their care do so – while supporting those who cannot afford to pay.
However, it doesn’t report until November this year.
Will the Government intervene to ensure our aged care sector doesn’t collapse before then?
We hope for the sake of our frail Mums and Dads they are looking closely at these figures – and what they can do to ensure these valuable services continue to care for our older Australians.
Photo credit: StewartBrown.
