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Unspent funds hit $7000 per client


A key report on the financial position of the aged care sector reveals the average amount of unspent home care funds held by providers has increased by around $1000 in the last year to just under $7000 per client.

The StewartBrown Aged Care Sector Report for the year ending June 30 also found a declining financial performance among home care providers with a further reduction in average operating surpluses.

A significant number of home care providers were operating at a loss with almost one in three (30.4 per cent) recording a negative Net Profit Before Tax in the last financial year.

The survey, which includes data from 35,000 home care packages, found an average of $6,995 per client in unspent funds compared to $6,022 the previous financial year, despite an improvement in revenue utilisation.

It notes unspent funds have now reached a level where the government is considering changes to funding arrangements to unlock the funds create more packages.

“The Survey highlights that the financial performance of the aged care sector continues to experience significant challenges due to further declines in the financial results in both the residential care and home care segments,” the report says.

In-home care experienced a decline in financial performance from $3.77 per client per day to $3.65 per client per day, due to revenue increasing at a lower rate than costs and largely as a result of providers’ pricing policies.

“The Survey highlights that the financial performance of the aged care sector continues to experience significant challenges due to further declines in the financial results in both the residential care and home care segments,” the report says.

The report says providers have tried to compete on pricing alone rather than setting prices relative to unit costs.

“With the new pricing transparency rules coming into effect from 1 July, including rolling up administrative overheads into the unit costs of services, it should be expected that the unit prices for services will increase accordingly.

“Presently, we are not seeing this and there is a concern that margins will decline further as will the results of home care providers.”

Reduction in staff hours

Staff hours per client per week fell despite increases in average revenue and an increase in the number of high level packages.

The report says this may because consumers are using more of their packages for goods and non-labour based services, or using more third party services.

“Many of the issues being experienced are increasingly of a long-term nature and, accordingly, will require structural changes to remedy,” the report says.

The report says 60 approved home care providers joined the market since June 2018 and the number of home care packages jumped from 91,847 to 99,110, representing an increase of 14,139 people getting a home care packages.

The home care wait list decreased for the first time since March 2017, but there are still just under 120,000 consumers on the queue.

“This statistic indicates that substantial investment is required,” the report says.

Viability concerns

To improve financial performance and sustainability in home care, StewardBrown recommends increased HCP funding, more clarity and flexibility in spending, clearer guidance around unspent funds, more consumer education and integration of the CHSP and HCP programs.

The high level of financial stress is creating viability concerns for some approved providers, StewartBrown warns, adding the aged care sector doesn’t have “the luxury of time” to wait for the findings of the aged care royal commission or the government’s response.

“Many of the issues being experienced are increasingly of a long-term nature and, accordingly, will require structural changes to remedy,” the report says.

LASA CEO Sean Rooney said the latest data only confirmed what the sector has been telling government.

“As this report states, we cannot wait for the Royal Commission to run its course as that will be too late for some providers,” he said in a statement.



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6 Responses to Unspent funds hit $7000 per client

  1. W Sullivan October 19, 2019 at 8:04 pm #

    Can anyone explain how unspent funds create a viability issue? It’s called consumer directed care. Get used to it or start offering services that the clients want. Perhaps they are saving up for something that will help them stay at home. Instead the dodgy lazy providers would prefer that they can just to send someone round each week to flick a feather duster around. That way they get a fee off each “service”. CDC for ever!!

  2. Venta October 22, 2019 at 11:46 pm #

    With providers charging up in the 40 percentile of a package for fees AND charging clients 3 times what the actual carer is being paid per hour it seems the only winner here is the provider (piggy in the middle).
    Next royal commission should be in this grossly abused system. The biggest loser is the frail who need the help the most. Second the taxpayer who’s money is wasted on greedy pigs and third the carer who spends what she earns on petrol and car maintenance.

  3. Ted Wards October 24, 2019 at 10:07 am #

    Our clients who are on packages and receive group social support from us are complaining to us that their packages have no funding left in them. There is something not right about this whole system and I don’t think providers are being entirely honest. I still think they are squirreling lots into their over inflated infrastructures. How do clients packages pay for the cars and the flash buildings, the elaborate displays at expos etc? They no longer receive block funding which used to go towards all this. I suspect its in the over inflated admin fees. I do invoicing and I know how many I can do in an hour with today’s technologies. I also answer the phone, take enquiries, answer questions etc so I know admin staff are not paid that much per hour. I think there needs to be a urgent enquiry into this point alone!

  4. David Napier October 24, 2019 at 11:27 am #

    I have had to have substantial works done to make my home safe, I need still to have further works done outside to replace ramps plus I need my head control system on my power chair replaced $7,000 comes no where near the cost of this, not even close, and I use my funding to take me to see my neurologist 140km round trip, can’t use taxis not reliable, if I did not have some funds banked I would be in real trouble, my provider has been excellent in keeping me appraised of my financial situation.

  5. Nia Holtom October 24, 2019 at 12:21 pm #

    I have a stash of unspent funds only because I refused to take the staff that were provided to me by my lazy Provider. I battled a lot in my own with sickness because I couldn’t tolerate the loud, abrasive, unskilled people coming to me. It was unbearable. For the fees I paid and what I requested in my Care plan, simple food prep, I had trouble receiving. To save myself I cut my hours to recover and I was lucky to finally get one Carer who could cook and was quiet in the house. Now I self manage, and my health and my life are forever changed. Once again I am in charge of my life without unskilled people making my decisions. Why should money be taken from me because I am managing my expenses and Carers better, I want to keep money aside for a later date.

  6. Frustrated October 28, 2019 at 7:50 am #

    Some general comments:
    30% of providers running at a loss!
    If you can self manage, do so, but many don’t want to pay mgt fees but still want providers to manage every aspect of their services.
    I’m sick of hearing that providers charge double or more what carers earn – this is no different than any other industry and reflects what it actually costs to employ someone!
    CDC has created greed – from about 10% of clients.
    The $7000 average is really from the many long term level 4 recipients that do not need level 4 so just accrue funds. some up to $100,000. These people should receive lower packages reflecting their real level of need, but the system doesn’t allow anyone to be reassessed down, despite reablement being a plank of CDC!

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