The financial performance of residential aged care providers continues to improve, according to the latest government report.
Published by the Department of Health and Aged Care, the Quarterly Financial Snapshot for January to March 2023 shows a net loss before tax of $13.48 per resident per day – a $6.76 improvement on the previous quarter. It puts the March 2023 year-to-date total net loss before tax for the residential aged care sector at $674 million.
It also sees the number of residential aged care providers reporting a year-to-date net profit before tax increase to 48.6 per cent – up 2.2 per cent.
Average occupancy rates – which can have a significant impact on viability and the overall financial performance of providers – were 86 per cent in the third quarter, a small increase of 0.2 percentage points on the second quarter result.
Average care minutes increased by one minute in the March quarter, totalling 190 minutes per resident per day – including 35 minutes for registered nurses.
“Government expects care minutes to continue to increase in the lead up to care minute targets becoming mandatory,” say the report’s authors.
From 1 October, providers will be expected to hit an average target of 200 care minutes per resident per day, including 40 minutes RN time.
In the third quarter, providers spent more on wages, as median labour costs per resident per day rose to $179 – up from $173 in the previous quarter. “This is consistent with the expectation that providers would spend more on labour to meet their care minutes requirements,” say the report’s authors.
Home care
At $3.65 per recipient per day, the report shows profits were slightly up for home care providers in the January-March quarter – by $0.06. Expenses decreasing more than revenue was the reason behind the increased result.
Overall, the year-to-date percentage of profitable home care providers increased slightly to 74.5 per cent at the end of the third quarter – up from 73.8 per cent at December 2022.
“This is the first quarter of data available since the introduction of capped fees for care and package management to ensure that more funds are available to meet the needs of home care recipients,” say the report’s authors.
Level 3 and 4 care management fees increased to 17 per cent per home care package – consistent with levels 1 and 2, and below the cap of 20 per cent. Level 1 and 2 package management fees increased to 11 per cent – 1 percentage point higher than level 3 and 4 (10 per cent), and below the cap of 15 per cent.
Covid-19
“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,” say the report’s authors.
For the period of January to March 2023, the department approved approximately $142 million in reimbursements to providers through the Covid-19 Aged Care Support Program Extension Grant – an increase on approximately $72 million of reimbursements during October to December 2022 and $58 million during the July to September 2022 quarter.
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 January-March 2023 snapshot is the second quarter of the Australian National Aged Care Classification funding model, which came into play on 1 October 2022.
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