Funding direction urgently needed

The lack of information is stoking sector uncertainty, says StewartBrown.

The federal government should provide a clear and unambiguous statement of intent regarding future funding arrangements for the aged care sector, according to industry experts.

This call for government action features in StewartBrown’s latest financial performance report. “It is critical that a clear and unambiguous funding direction is announced as soon as possible to allow providers to advance their strategic direction and encourage much-needed investment in the sector,” say the report’s authors.

By failing to respond to the 23 recommendations of the Aged Care Taskforce – which were delivered in its final report eight months ago – the government continues to stoke sector uncertainty, add the report’s authors.

“It is clear that the government is seeking a level of bipartisan support for the underlying basis of the recommendations … Whilst this is an important process to follow for any reform agenda, the sector has suffered financially and operationally for many years due to the uncertainty of regulation, compliance and funding  which has significantly affected the future financial sustainability.”

The authors’ statements echo those made by StewartBrown senior partner and taskforce member Grant Corderoy at an industry event in Sydney last month.

Speaking at the Aged and Community Care Providers Association’s state conference for New South Wales and the Australian Capital Territory, Mr Corderoy told delegates: “We’ve been talking about the delay for quite a while and, in fact, it’s become very pressing.”

Elsewhere in StewartBrown’s Aged Care Financial Performance Survey Report for the nine months ended 31 March 2024, the authors note an improvement in operating result for residential aged care.

Source: StewartBrown

The average operating result across residential aged care homes for the period was a loss of $0.64 per bed per day – which represents an operating loss of $218 per bed per annum. For the March ’24 nine-month period, half of all aged care homes operated at a loss – down from 64.1 per cent the previous year.

As the authors acknowledge: “The increase in operating result is primarily due to an increase in the direct care margin as a result of the [Australian National Aged Care Classification] subsidy being greater than the cost of providing direct care services.”

Regarding direct care, on average, during the March ’24 quarter, survey respondents recorded 202.73 minutes of total direct care provided to residents per day, including 38.59 minutes of registered nurse time.

Facilities are required to deliver a sector average of 200 minutes of direct care per resident a day, including 40 minutes from an RN.  

The workforce shortfall continues to remain a challenge for the sector. Agency usage across all direct care categories – RNs, enrolled nurses and personal care workers – increased from the December ’23 quarter, the StewartBrown survey has found.

Source: StewartBrown

Occupancy rates significantly improved, however, with 92.6 per cent recorded during the period.

In summary, the report’s authors say: “The impact of additional funding through the AN-ACC direct care subsidy is continuing to have a positive impact on the results of residential aged care providers.”

However, they add: “As providers continue to work towards meeting their mandated direct care minutes the direct care margin will continue to deteriorate to a level that will not be able to be sustained without increases to other revenue streams.”

With the sector continuing to make significant losses through everyday living and accommodation services delivery, the authors say “financial sustainability needs to be achieved from all service areas of a residential aged care home.”  

If implemented, the taskforce recommendations will provide additional revenue for providers from indirect care and accommodation services. This, say the report’s authors, “will significantly improve the financial sustainability of residential aged care facilities.”

Home care ‘uncertainty’ continues

Source: StewartBrown

Home care, meanwhile, recorded a marginally improved operating result of $3.41 per client per day – up from $3.39 the previous year.

Average staffing hours providing in-home direct care have decreased slightly to 5.13 hours per client per week (5.14 hours March ’23). Still with the workforce, the authors note that “consistent with residential aged care, staffing remains the most crucial concern for home care.”

When assessing the home care sector, the report’s authors say that the industry continues to operate with “legislative uncertainty” as the sector awaits reform of the Support at Home program.

Facing delay after delay, the implementation date for Support at Home is now scheduled for 1 July 2025, with the integration of the Commonwealth Home Support Program deferred until at least July 2027.

As with the government’s response to the taskforce recommendations, the authors point to a dearth of detail on Support at Home. “Further information to that already received will be needed to inform providers’ strategic planning under the new program,” they say.

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Tags: Aged Care Financial Performance Survey Report, aged care reform, aged care taskforce, funding, response, stewartbrown,

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