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Provider groups call for an ‘adjustment payment’


Aged care peak bodies have jointly called for an urgent funding boost for the residential aged sector following the release of new data this week that shows an increase in the number of facilities running at a loss.

The latest financial performance report from aged care accountants StewartBrown shows that 41 per cent of the 915 facilities surveyed reported a loss in earnings before tax for the six months to 31 December 2017.

The report found that the financial performance of facilities “declined considerably” in the second half of last year and that the results were a major concern for the sector and its ongoing financial viability (read more here).

Aged care peak bodies Aged & Community Services Australia, The Aged Care Guild and Leading Age Services Australia said the current situation was due in part to government’s changes to aged care funding.

The peaks are calling for an immediate injection of funds via the May Budget and have reiterated calls for a long-term sustainable funding strategy.

ACSA CEO Pat Sparrow said many providers were now struggling to remain financially viable particularly those operating in remote and rural areas or looking after the most disadvantaged.

“The sector now needs an urgent funding injection, such as an adjustment payment, while the longer term work on new funding arrangements is being undertaken,” she said.

Ensuring providers’ financial viability is fundamental to consumers and providers having confidence in the aged care system, said LASA CEO Sean Rooney.

“Recent changes to government funding arrangements have cut deeper than anticipated and the ability of [providers] to deliver accessible, affordable, quality care and services to older Australians is now at serious risk,” he said.

Aged Care Guild CEO Lee Hill said the predicted 83,500 new beds needed over the next 10 years to meet rising demand was far from being met.

“Given the observations in the Legislated Review of Aged Care about long-term sustainability of the sector, this needs to include broader discussions … across the full spectrum of revenue levers such as private, public and insurance products,” Mr Hill said.

Reviews underway

Government-commissioned reviews and research into how aged care is funded are ongoing and have included the University of Wollongong’s report into alternative funding models and the subsequent Review of the Aged Care Funding Instrument led by Dr Richard Rosewarne, which was completed last year.

When Minister for Aged Care Ken Wyatt released the Rosewarne report in October, he said no decisions have been made on the funding reforms and that the next step was the University of Wollongong-led Resource Utilisation and Classification Study. The RUCS is due to report in December.

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