Providers are on the front foot

Providers expect the federal government will soon reform aged care and are getting financially ready for wide-sweeping change now, according to newly released Bentleys survey results.

Above: Bentleys’ associate director, Lauren Welk

By Yasmin Noone

Providers are not sitting around waiting for the federal government to announce an aged care reform package but are instead, on the front foot, shifting their funding structures and business models now in preparation for wide-sweeping sector change, an industry analyst said.

Bentleys, an association of independent accounting firms with specialist experience in the aged care and retirement village industries, today released its 2011 aged care survey phase-one results derived from the 2010-2011 general purpose financial reports of 260 Australian providers.

According to Bentleys’ associate director, Lauren Welk, the initial results indicate that aged care providers are getting better at fiscally planning for change industry-wide and are keeping some funds aside ‘just in case’ future reform measures are passed.

“[Already] top-line results reflect the Productivity Commission’s predictions of a major shift towards user-pays funding, particularly when it comes to self-selecting additional or premium accommodation or services,” Ms Welk said.

“Accommodation bonds now represent almost a third of total financing and there is increased liquidity in the sector, which essentially means that operators have more cash ready to pay debt as it falls.”

Bond repayment capacity is now at 97.83 per cent industry wide compared to 85.64 per cent in the 2005/2006 reporting periods.

“Operators are keeping funds in reserve and carefully considering how they will evolve to cater for residents of the future, both in the short and long-term, by researching consumer trends and evaluating business models.

“One popular option may be to adopt a hotel-like approach, providing different levels of standard and premium accommodation and service components as well as “extras” that can open up additional revenue streams. 

“The top performers are focusing on ensuring that their services are ‘future ready’ and putting the steps in place to improve the performance and sustainability of their businesses.”

This year’s ‘Balance Sheet Health Check’, currently being sent to participating providers, marks the company’s first since the Productivity Commission released its final Caring for Older Australians inquiry report in August 2011.  

The annual aged care survey, now in its 17th year, is regarded as the benchmark for the financial health of the aged care industry, and helps guides provider and government decision-making.

Phase-two survey results, which build upon phase one results with profit and loss and other operational data to provide individual provider benchmarking reports, are currently being assessed and will be available from April 2012 to help provide more insight into current tactics.  

Participants will be advised when their reports are available online.

To view the survey or keep track of further survey results, click here.
 

Tags: aged-care-survey, bentleys, bonds, finance, fiscal, retirement-villages, welk,

2 thoughts on “Providers are on the front foot

  1. Good morning Lauren,

    your reports sound amazing. I am very interested in reading this year’s as well as previous years. Thank you for making them available to the public.

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