Services at risk of failure without funding boost, peaks warn

Aged care provider peak bodies have reiterated concerns about the viability of facilities in rural and remote areas following a new analysis on the financial performance of these services.

StewartBrown’s Aged Care Financial Performance Survey Rural and Remote Results Summary found that 65 per cent of the 95 residential aged care homes in outer regional, rural and remote areas surveyed made an operating loss, and 47 per cent made a cash loss for the quarter ending September 2019 .

South Australian homes in these areas are doing it the toughest with 85 per cent recording an operating loss and 65 per cent making a cash loss, the new analysis found (read our story here).

By comparison, of the 640 facilities surveyed in major cities, 47 per cent and 22 per cent recorded an operating and cash loss respectively while 55 per cent of 249 facilities in inner regional areas reported an operating loss and 31 per cent a cash loss, the survey shows.

Leading Age Services Australia CEO Sean Rooney said he was “alarmed” over the results for facilities in outer regional, rural and remote areas.

“Maintaining rural and remote aged care services is critical to enabling older Australians to age in place, as well as sustaining local communities. This is increasingly at serious risk,” Mr Rooney told Australian Ageing Agenda.

“We have already seen the closure of regional aged care homes in recent months and the risk of missed care and more service closures is looming large in 2020,” he said.

Mr Rooney acknowledged the recently announced $50 million Business Improvement Fund, which priorities rural and remote services, but said aged care homes needed urgent operational funding to continue providing services.

CEO of aged care peak body Aged and Community Services Australia CEO Patricia Sparrow said StewartBrown’s analysis showed that provider costs were rising much faster than revenue.

“This gets even worse in regional and rural areas with a staggering 65 per cent recording an operating loss – a number that is simply not sustainable,” Ms Sparrow told AAA.

“Just because someone lives outside a major city does not mean they shouldn’t have access to safe and comfortable aged care services,” she said.

“The Morrison Government needs to stand up for elderly Australians all over the country and give the sector the support it desperately needs, and they shouldn’t be waiting until the royal commission is finished; there’s things that funding can fix now.”

The CEO of Catholic provider peak Catholic Health Australia, Pat Garcia said 2020 was crunch time for operators in rural and remote areas.

“Many providers are struggling to operate in very difficult circumstances but we fear that unless the Federal Government steps in to alleviate the pressure, we can expect some residential homes to fail within the next 12 months – that would be devastating for frail elderly residents who depend on receiving personal care and nursing services,” Mr Garcia said.

“It’s incredibly alarming that almost 85 percent of care homes in the most rural parts of South Australia are facing closure but this goes far beyond state borders.

“Aged care homes are facing closure all over the country and even in our major cities almost half are in trouble,” he said.

“We know that costs are higher for the sector due to their remoteness, but this should come as a huge wake up call to the Government,” Mr Garcia said.

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