Financial dip for sector, says report

Providers’ net losses rise on previous quarter, the department says.

The financial performance of residential aged care providers has slumped slightly, according to the latest government report.

Published by the Department of Health and Aged Care, the Quarterly Financial Snapshot for April to June 2023 shows a net loss before tax of $13.81 per resident per day, slightly worse than the previous quarter’s report ($13.48).

The snapshot sees a slight increase in the proportion of residential aged care providers reporting a year-to-date net profit before tax, but it is still less than half of providers (48.9 per cent). For-profit providers are more likely to be in the black (57.4 per cent) than their not-for-profit counterparts (43.8 per cent).

Source: Department of Health and Aged Care
Anika Wells

“When the Albanese Government came into office, the aged care sector was hurting from a lack of investment and innovation, but in just 12 months there is now an optimistic outlook for the financial future of the sector,” Minister for Aged Care Anika Wells said in an upbeat statement.

Average occupancy rates – which can have a significant impact on viability and the overall financial performance of providers – were at 86.7 per cent in the fourth quarter, a small increase of 0.7 percentage points on the third quarter report.

Average care minutes increased by four minutes during the period, totalling 194 minutes per resident per day – 37 minutes for registered nurses, 14 minutes for enrolled nurses, 143 minutes for personal care workers.

Source: Department of Health and Aged Care

“I am particularly pleased to see care minutes increase to 194 minutes for the last quarter of the year, showing that the sector average of 200 minutes is well within grasp,” said Ms Wells. From 1 October, providers have been required to hit an average mandatory target of 200 care minutes per resident per day, including 40 minutes RN time.

In the fourth quarter, the total median staff costs increased from third-quarter reporting from $179 to $184.98 per resident per day. The report also snapshots workers’ wages:

Source: Department of Health and Aged Care

This will allow the department to monitor the implementation of the 15 per cent pay rise on 1 July to ensure it is being passed on to workers.

Home care

At $5.25 per recipient per day, the latest quarterly financial snapshot shows home care profits up $1.60 on the previous quarter’s report ($3.65).

Overall, the year-to-date percentage of profitable home care providers also more or less stayed the same during the fouth quarter at 74.7 per cent. Again for-profit providers are more likely to be in the black than not-for-profit providers.

Source: Department of Health and Aged Care

The department continues to acknowledge the impact of Covid-19 on the aged care sector, including on the potential financial position of aged care providers during this quarter.

For the April-to-June-2023 period, the department approved approximately $158 million in reimbursements through the Covid-19 Aged Care Support Program Extension Grant – an increase from approximately $142 million of reimbursements during Q3.  

For-profit and not-for-profit residential and home care providers are the primary provider type included in the quarterly financial snapshots. The reports draw upon data collected through My Aged Care and other internal departmental sources.

The June-April 2023 snapshot is the third quarter of the Australian National Aged Care Classification funding model, which came into play on 1 October 2022.

“Looking ahead,” said Ms Wells, “we expect to see continued improvements in the viability of the sector, supported by additional AN-ACC funding.”

Comment on the story below. Follow Australian Ageing Agenda on FacebookTwitter and LinkedIn, sign up to our twice-weekly newsletter and subscribe to AAA magazine for the complete aged care picture.  

Tags: anika wells, Department of Health and Aged Care, featured, Quarterly Financial Snapshot, reporting,

Leave a Reply

Your email address will not be published. Required fields are marked *