Aged care will be ‘user pays’ within decades

Further findings from a national industry survey show that subsidies are not keeping up with care costs.

Aged care consumers will pay to access services within decades because the current system is unsustainable, according to the accountant behind a major industry survey.

Bentleys director, Heath Shonhan said the cost of care and other operational costs was absorbing 93 per cent of the sector’s income, with finance and depreciation accounting for the remainder.

It was revealed last month that more than 40 per cent of facilities in the group’s 2009 National Aged Care Financial Survey are currently operating at a loss with average profits below 5 per cent.

Mr Shonhan said the inadequacy of current arrangements would probably lead to the introduction of a user pays model.

“Over time, the higher proportion of older people will mean subsidies will not be able to cover everyone needing care and those than can afford to pay for their care may be required to do so,” he said.

“In turn, this could force aged care providers to improve their services and facilities in order to attract residents.”  

The survey also highlighted the difficult circumstances faced by residential aged care services.

More 50 per cent of non-metropolitan aged care homes are operating at a loss, Mr Shonhan said.

“Providers outside of major cities also earned, on average, 36 per cent less than those in metropolitan areas in the last financial year,” he added.

Close to 350 aged care services, or about 12 per cent of the nation’s facilities, were involved in the Bentleys survey.
 

Tags: aged-care, bentleys, consumers, finance, funding, regional,

Leave a Reply