ACAR sees further blending of aged and retirement sectors

Just four years after selling all its bed licenses retirement village operator Lendlease has returned to aged care with a bang, picking up the largest individual share of the 10,000 new places.

The 2016-17 Aged Care Approvals Round includes 9,911 new residential places worth an estimated $649 million a year along with $64 million in capital grants to build or upgrade aged care services, Minister for Aged Care Ken Wyatt announced on Friday.

Three-quarters of the places are for new aged care services, around 40 per cent are for dementia-specific beds and more than a quarter are for services outside metropolitan areas, but no places were applied for in the NT.

Property developer Lendlease has topped the list for the number of places allocated with 756 licenses across six new services in the ACT, NSW, Queensland and Victoria – including 162 dementia and 18 respite places – at sites co-located with existing retirement villages.

In 2013, Lendlease sold its aged care business of 2,338 beds in 30 facilities and a development pipeline of 563 beds to Archer Capital, which then formed Allity, because aged care was considered non-core business.

This week, a spokesperson for Lendlease said the new bed licences underpinned its strategy of providing continuum of care in its retirement living villages.

In response to questions about the reasons for its return to aged care, where the new beds will be housed and when they will be available, the spokesperson told AAA they were unable to provide further comment at this stage.

As reported previously by AAA, a desire for seniors to age and receive a continuum of care in place as their needs change is driving diversification and partnerships in the retirement living sector and blurring the lines between it and aged care (read that story here).

Commercial director of aged care advisory service The Ideal Consultancy, Fiona Somerville told AAA she wasn’t surprised by the retirement operator vying for places as there is a lot of talk recently about providing care in retirement villages.

Expansion of the private sector continues

In line with recent ACARs, the growth of the for-profit sector has continued in this round with for-profit providers holding the top five spots for number of places allocated.

The top five collectively obtained 24 per cent of total places, according to Ideal’s analysis.

While the total number of facilities allocated places was evenly split between for-profit and not-for-profit organisations – to 99 and 98 facilities respectively – the for-profits picked up almost two-thirds of the total (6,217 places), the analysis found.

Strong competition

Ms Somerville said this was the most competitive ACAR on record with providers applying for a total of 45,053 places compared to 38,868 and 19,169 places in 2015 and 2014 respectively.

“Nationally the figures demonstrated a roughly one-third chance of success in this past ACAR,” Ms Somerville said.

The success rate ranged from around 15 per cent in South Australia to 42 per cent in Western Australia, which Ms Somerville said was “no doubt impacted by the chronic under supply in recent years.”

Renewed calls to uncap places

In response to Friday’s announcement provider and consumer peaks renewed their calls for the government to open up the supply of residential places, with safeguards to ensure continued supply of beds in rural areas.

Mr Wyatt first announced last November that the government would not deregulate the supply of beds until there was “a secure model for rural and regional Australia” (read that story here).

Aged and Community Services Australia CEO Pat Sparrow said the ACAR process was administrative, restrictive and stifled innovation.

“Supply of residential aged care places ultimately needs to be uncapped to ensure beds are available in the areas where people most need them,” Ms Sparrow said.

In addition to the uncapping in the supply of residential places, Council on the Ageing Australia chief executive Ian Yates called on the government to move to a new system that better met demand for the higher quality care and choice that older people wanted.

“Aged care bed licences need to be put in the hands of residents and their families so they are free to use which provider they like and to move between providers by their own decision – just as now happens in home care packages since 27 February this year.”

On the places that were not taken up, Leading Aged Services Australia CEO Sean Rooney said it was surprising that no applications were received in the Northern Territory, despite there being 84 places available and an overall 15-per-cent increase in applications.

See a full breakdown of this year’s ACAR here.

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