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Utilities costs on the rise



Predicted rises in gas and electricity prices already appear to be affecting aged care providers, according to the latest aged care survey from Stewart Brown Business Solutions.

The report measured the financial performance of 342 facilities across Australia in the three months to September 2009.

During that period, the average cost of utilities per resident each day rose from $3.80 to $4.62 in high care facilities and $3.58 to $4.60 in care facilities.

Stewart Brown’s aged care survey manager, David Sinclair said energy use is emerging as a real financial issue for aged care providers.

“There was a significant increase in utilities costs last year for the first time in a number of years and it appears that this increase has occurred again in the first quarter of this year,” he said.
 
“It is an indication of what providers will need to be looking at. Anything that anybody can do to become more energy efficient now is certainly going to benefit them in the future.”

The survey also revealed significant improvements in the operating results, particularly those at the higher end of the care spectrum.

In the September 2009 quarter, 56 of the 118 high care facilities involved in the survey achieved an operating profit, compared to just 24 out of 110 high care homes in the June 2009 survey.

But Mr Sinclair said this kind of improvement is common in the September survey as subsidies usually increase in July.

“It is a continuation of the usual trend,” he said. “The September report is always hard to write because you never know exactly what’s going to happen in the rest of year.

“At this stage we need to wait and see what the December results show. Then we will be able to provide a better judgement of what trends are going to emerge for the rest of the year.

“The spike was bigger at the high care end of spectrum and I don’t think that’s unexpected either because there was a further relaxing of the cap on subsidies. From 1 July, providers received a one-off hit of up to $10 per bed day for residents with higher care needs.”

The results from the December quarter survey are likely to be released in March.



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