Diversifying for survival
The newly released results of a financial survey has found that aged care providers are diversifying income streams to reduce their reliance on government funding.
Above: Bentley’s associate director, Lauren Welk
The aged care industry is diversifying income streams to reduce its reliance on government funding and build resources to meet the demands of future generations, according to new survey of 260 aged care facilities around Australia.
The final results of the 2011 Bentleys National Aged Care Financial Survey, released this week, show an industry that is evolving to meet financial, capital and consumer demands.
This year’s survey, now in its 17th year, is the first since the delivery of the Productivity Commission’s Inquiry Caring for Older Australians report in August 2011.
Bentleys’ associate director, Lauren Welk, estimates that, based on population projections over the next decade, 90,000 new aged care places will be required, with each costing at least $200,000 in capital investment (excluding land costs).
“However, this year’s survey also indicated that while government subsidies have increased by six per cent since 2009, costs over the same period have increased by six per cent for care components like nursing and chemist supplies, eight per cent across services like cleaning and catering and 17 per cent for accommodation costs like energy and rates,” Ms Welk said.
To compensate for additional costs, the financial and operational data indicates that providers are increasingly focusing on opening up revenue streams, increasing efficiencies and repairing balance sheets.
“With greater focus on the decoupling of accommodation, care and services, smart providers are working hard to better track their costs and earnings across these categories to better understand what drives their businesses.
“For example, this year’s data shows that accommodation bonds continue to contribute approximately 30 per cent of total financing and the number of providers offering extra services, such as those linked to e-Health technologies, has increased by 40 per cent compared to previous surveys.
“New services such as daily respite or technology-based health monitoring for aged residents in their own homes, is improving the performance and sustainability of leading businesses across the sector.
“Aged care providers investing in new technologies are also benefiting from greater efficiencies in care delivery, with knowledge being shared across facilities and electronic data entry speeding up patient reporting.
“As the baby boomer generation moves into aged care, more providers might also adopt a hotel-like approach whereby more affluent residents accustomed to higher standards of living are given the option of premium accommodation and service components, opening up additional revenue streams.”
The Bentleys team will present the results of this year’s survey at a seminar for providers and industry participants in Brisbane on 14 June.
Bentleys is an association of independent accounting firms in Australia with specialist experience in the aged care and retirement village industries.
For more information about the survey, visit www.agedcaresurvey.com.au
