Amid increasing attention on unspent funds in home care packages, the latest StewartBrown industry benchmarking data shows average amounts continue to increase.
New data released by the accounting firm on Tuesday shows average unspent funds have grown to $5,862 per client in the March survey, up from $4,255 in June 2017.
On average 14.5 per cent of package funding was unspent across the national survey sample of over 21,000 packages.
StewartBrown said providers should be aiming for a target of 5 to 6 per cent of unutilised funding.
While the national average is approaching $6,000 per client, some providers have reported consumers with surpluses over $20,000.
Community Care Review understands the Department of Health has recently met with providers and sector experts on the issue of unspent funds to better understand the drivers for the accumulation of funding and possible responses.
Speaking at the LASA NSW State Conference earlier this month, StewartBrown senior partner Grant Corderoy said the reluctance amongst some consumers to accept necessary additional care and support was a major reason for the build up in unused subsidies.
He said nationally there was in excess of $320 million in unspent funds sitting in the balance sheets of providers.
A drop in pricing among some providers in response to increased market competition was also impacting on the utilisation of funding, Mr Corderoy said.
This week, the Department of Health also released a new fact sheet for providers on “actively managing unspent funds”.
In the fact sheet, the department identified client choice, automatic package upgrades and temporary leave as contributing factors to the accumulation of unspent funds.
The government reiterated the position that a “small proportion” of a client’s budget can be set aside for future events, such as leave of a carer.
The department also encouraged providers to help clients opt out of the home care queue if their current needs are being met to avoid an unnecessary upgrade to a higher level package.
Stakeholders in the sector such as COTA Australia have argued for the structure of the four package levels to be reconsidered in the ongoing reform of the home care system to ensure a more even and incremental increase in funding, which would positively impact on unspent subsidies.
Industry consultant and trainer Lorraine Poulous said home care providers should be working creatively with clients to understand how a package can be used to meet their diverse needs such as through allied health services and reablement programs, chronic disease management and assistive technology.
Historically, the program’s original guidelines explicitly referred to the option of a contingency fund of no more than 10 per cent, which could be used in an emergency or to meet unplanned needs. However, this specific advice was later removed as the program has been implemented and demand for packages has grown.
Elsewhere, the StewartBrown survey reported a decline in the financial performance of home care providers, including for the top quartile of providers.
The March quarter showed a decline in average Earnings Before Tax from $5.37 per client per day in June 2017 to $4.39.
StewartBrown said many new providers have a low-cost model that “promises more than [organisations] can deliver, resulting in pricing pressure.”
Administration costs have also decreased on June 2017 levels as providers focus on achieving greater efficiency and economics of scale, the report said.
Access the StewartBrown reports here.