A preliminary analysis of the Department of Health and Ageing’s general purpose aged care financial data provides further evidence of the sector’s declining profitability.
According to the analysis from Grant Thornton, aged care profits have fallen from an average of $3,773 per bed per annum in 2004 to just $603 per bed per annum in 2008.
Grant Thornton was engaged by the department to review the financial statements of aged care providers between 2004 and 2006.
“The results are consistent with the returns presented in the Grant Thornton Aged Care Survey 2008 which reported segment profits of $828 and $699 for 2007 and 2008 respectively,” said Cam Ansell, the national head of Grant Thornton’s aged care services, in a letter.
Mr Ansell said the analysis had been conducted for Grant Thornton’s own internal purposes, adding that its findings were subject to change based on feedback from the department.
The CEO of Aged Care Association Australia (ACAA), Rod Young, said the findings highlighted the need for reform in aged care.
“With a rapidly ageing population and mounting pressure on provider resources, any debate on Australian healthcare reform cannot be reasonably argued without addressing the fundamental weaknesses in our aged care policy framework,” said Mr Young.
“Any discussion about health without dealing with aged care will lead to negative impacts on the choices available to future clients, their access to those services and the ability of the industry to maintain a sustainable service offering.”