Most homes missing care minute targets

Staff shortages are making it difficult for providers to hit mandatory threshold.

Only a third of residential care homes are meeting their care minute targets, according to new analysis.

Released by the UTS Ageing Research Collaborative, Australia’s Aged Care Sector Mid-Year Report 2023-24 shows that just 36 per cent of homes are meeting the average of 200 minutes of care per resident per day – 40 minutes of which should be provided by a registered nurse.

Source: UTS Ageing Research Collaborative

The figure chimes with government statistics released in April which show that – during the October to December 2023 quarter – under a third of homes met both care minute targets (32.37 per cent).

The authors of the UARC report – the fifth of its kind – found that the homes with the lowest rates of meeting care minute targets tend to be operated by for-profit providers located in metro areas and regional centres.

Staff shortages – particularly a deficiency of RNs – are making it difficult for facilities to meet the care minute threshold (which, from 1 October, rises to an average of 215 care minutes per resident per day, including 44 minutes of RN time). As the report’s authors note, across the sector, the average star rating for staffing is 2.9 out of 5 – which is below acceptable quality (3 stars).

Nicole Sutton

The report’s lead author Associate Professor Nicole Sutton told Australian Ageing Agenda: “Going forward, any further increases in direct care funding need to be accompanied by more explicit conditions that homes meet their regulatory obligations to provide their residents with appropriate levels of care.”

Elsewhere, the 124-page report shows that the first half of 2023-24 “presented a mix of outcomes” for the sector as it tried to recover from challenges including the royal commission findings, Covid-19, and a swath of policy reforms and regulatory requirements.

Focusing on finances, the report’s authors found many residential care homes showed a “modest rebound in results” for the period.

The 2023–24 half-year financial results were, on average, say the report’s authors, “better than anticipated”, with the loss per resident per day shrinking to $4.02 compared to $17.47 for the same period in 2022-23.

Source: UTS Ageing Research Collaborative

“The mid-year financial results for 2023-24 show some improvement across the residential care sector,” Associate Professor Sutton told AAA. “However, we have seen the reversion to a problematic pattern where many homes are once again relying on surpluses from direct care to cross-subsidise their losses from everyday living and accommodation. This reinforces the need for a clear response to the Aged Care Taskforce’s recommendations about reforming how different aged care services are funded,” she said.

Associate Professor Sutton told AAA that “these direct care surpluses are being driven by underspending on staff by homes that have not delivered their required level of care minutes.”

Indeed, the UARC analysis shows a “significant underspend on direct care staff by some of the 63.9 per cent of homes that have not met their mandatory care minute targets.” In contrast, the 36.1 per cent of homes that have met or exceeded their staffing targets “are operating close to breakeven for direct care”, averaging $1.66 per resident per day.

Home care profits hit a new low

The authors record a bleaker financial picture for home care providers with profit margins reaching “a new low” of just $1.77 per client per day “as operators increasingly turn to third parties to meet the growing demand.”

Still with home care, more transparency is needed over wait times, say the report’s authors, to show how long older people are actually waiting for a home care assessment or to find a provider to deliver services. “These delays are estimated to add at least 8-14 weeks to the time that older people must wait before someone comes to the door to help them.”

While acknowledging that the 2024-25 budget announcement of more home care packages “is a welcome response to the recent rise in waiting lists and times,” the report’s authors say wait times will only fall if supply-side constraints are addressed.

The report’s authors also find that Australian taxpayers are subsidising aged care “to a far greater extent” than five years ago, with government spending on aged care estimated to be $32.3 billion in 2023-24 – $12.6 billion more than in 2019-20.

Source: UTS Ageing Research Collaborative

“This growth reflects substantial funding commitments to expand the availability of home care packages, lift staffing levels, fund award wage increases, and strengthen the regulatory regime to improve service quality.”

However, despite the funding uplift, the report’s authors note that half of residential care homes in Australia are still operating at a loss which could, ultimately, have negative consequences for older people living in regional and rural areas of the country. “Services experiencing sustained periods of financial distress are at greater risk of closure, which may undermine reliable access to services for older people, particularly those outside major cities.”

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Tags: Australia’s Aged Care Sector Mid-Year Report 2023-24, care minutes, finance, financial sustainability, Nicole Sutton, UTS Ageing research collaborative,

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