The maximum daily accommodation payment for aged care residents would need to increase by $13.44 to meet the actual cost of providing a bed, according to a report conducted by Access Economics.
Commonwealth legislation limits daily accommodation payments to $26.88 but according to the report, it costs $187,460 over 25 years – or $40.32 a day – to build a single aged care bed.
The study was commissioned by an alliance of eight church-affiliated groups which represent about 40 per cent of the aged care market.
The CEO of Catholic Health Australia Martin Laverty said the figures did not come as a surprise.
“We did not know the exact nature of the gap going into this exercise but we had a fairly good idea that the average cost of providing a residential aged care bed was going to be somewhere between $170,000 and $200,00,” he said.
“We are not-for-profit organisations so we are not here to make money but we are here to break even because if we don’t break even, we can’t provide care into the future.”
The alliance presented the findings to the Rudd Government in mid-March and Mr Laverty described the ensuing dialogue as “positive”.
“The government is very aware of the challenges we are facing,” he said.
“The shortfall has been acknowledged by government as something it needs to take on board.”
Access Economics presented five different options to address the shortfall in its report, including a move to uncap the accommodation charge altogether.
Mr Laverty said the alliance would prefer to maintain a maximum fee, although he did feel the $26.88 cap should be lifted.
“If the government wanted to do something tomorrow to help the sector remain viable, it could raise that $26.88 cap and lift it to an amount that is directly related to the cost of providing accommodation,” he said.
“This would impose no cost on the government.”
However Mr Laverty acknowledged that an increase to the accommodation supplement for concessional residents would need to be factored into the federal budget.
“We are not going to be unreasonable in asking the government to fix this tomorrow,” he said.
“We have given the evidence to them and now they need to come up with the best arrangement fort taxpayers, government and consumers.”
A recent report from accounting firm Grant Thornton found that the average cost of building new facilities was $176,000 per bed.
In a submission to the current Senate Inquiry into residential and community aged care, Queensland provider Blue Care also stated that current capital funding is insufficient.
It suggested an increase in the maximum daily accommodation payment from $26.88 to $62.81.