Residential care versus retirement living
Aged care organisations that provide only residential care do it a lot tougher than those organisations which offer a diverse mix of lifestyle and care options.
Residential aged care specialists face greater challenges and financial pressures than their industry counterparts which provide a mix of retirement living, community and residential care options.
This statement was made by the CEO of Masonic Homes, Doug Strain, who spoke of the difference in the financial constraints facing retirement living developers and residential aged care specialists.
The federal government is mostly to blame, Mr Strain said, for inadequate funding and the ever tightening operating margins that residential providers are forced to contend with.
“The government is going to have to increase its contribution to aged care providers,” Mr Strain said. “That’s why we welcome the Productivity Commission.
“[But the government] does not have time to waste. Property markets need three years from go to woe to build a nursing home and at the moment there is a sharp decline of nursing homes being built.”
Mr Strain added that of the company’s business portfolio, which includes retirement living, community care and residential care, the provision of the latter continues to be the most challenging.
“I think a lot of providers are struggling especially if they predominately have nursing homes. It’s really hard and smaller operators will also struggle…”
Mr Strain said that if things do not change, the system will not be able to continue to provide the growing number of senior Australians with high quality services and accommodation.
“…Change must occur that will ensure that all seniors Australians can access quality aged care services when and where needed.
“Masonic does not accept that the frail aged, who have been assessed by government as needing of services, are forced to wait for protracted periods for these services to be made available whilst some absurdly constructed government funding program catches up. This must change.”
But, Mr Strain said, it is not all bad news. Despite the difficulty posed by the Global Financial Crisis in the past 12 months, things are picking up in the retirement village sector.
“The reality is that within the retirement village space, there is a boom underway. What we have seen in the past is that seniors [were regarded] as a welfare class, but they aren’t a welfare class. That is no longer the case and the [retirement village] market is just starting to realise that they are not a cost.”
The provision of retirement villages and community care has been and will continue to be the company’s saving grace, as residential aged care comes under increasing financial strain.
He flagged that a major site acquisition in Adelaide’s mid-northern suburbs will be the next step in the company’s expansion plan. Masonic will also increase the number of retirement living units at Ridgehaven Rise in Adelaide’s northeast along with further additions to its Hillside Retirement Village.
“We are in a very good position, as our focus is all about growing our retirement villages and community care services to support the [coming] baby boomers.
“…Discussions are also continuing on the potential acquisitions of new greenfield development sites at Roseworthy in Adelaide’s proposed northern growth corridor and in Palmerston to Darwin’s south.
“I am hopeful that negotiations will be such that we will be able to announce next year more tangible plans for these target growth areas.”
