Stuart Hutcheon

StewartBrown

Leading Aged Care Chartered Accountants & Advisors

We asked Stuart Hutcheon, Managing Partner of StewartBrown, to be our Expert Partner to explain the business of aged care. He will advise on the regular changes to the structure and operation of aged care so we all understand where the money we spend on care goes, and why.

StewartBrown is the recognised authority in the financial operations of aged care homes and the delivery of home care service across Australia.

For over 20 years StewartBrown has carried out its ‘Aged Care Financial Performance Survey’, a three monthly detailed accounting questionnaire that goes to over 850 aged care homes and more than 440 home care providers. They analyse more than 22.3 million bed days of data per quarter.

Industry and Government relies on the quarterly survey results to understand how changes to regulations are impacting operators and customers. Aged care operators rely on the survey to compare their operations, overheads and trends in such areas as care costs and staffing.

StewartBrown is also the leading auditor of aged care providers nationally, giving them a unique view of the viability of the business health of the individual care businesses. This is vital for customers to ensure the aged care homes are secure and financially able to provide sufficient staff, as an example.

With the rapid changes taking place in aged care, StewartBrown provides strategic advice. Close to 70% of all aged care income is taken by up by direct care wages and care facilities need constant renovation plus new care homes need to be built. Management and boards need advice to plan next moves carefully and well in advance.

These unique insights has led to StewartBrown being a regular member of Government Steering Committees on the sector.

Did you know*

  • Australian aged care facilities average occupancy of 94.9%.
  • Most aged care homes have two types of income – care income to pay for providing ‘care’ and accommodation income to cover the costs of the physical aged care home.
  • The average care income across Australia is $214.55 a bed per day – what the home receives to look after each resident. The total costs for looking after each resident is $203.77. This means that the average ‘care’ profit per bed is $10.78 a day before tax. 
  • However 37% of all aged care homes lose money every day delivering care – an average of $18.46 per bed per day. This means each resident creates an extra loss of $6,740 a year.
  • The average ‘accommodation’ profit per day for all of Australia is $0.97¢ for each resident, meaning that after the maintenance, depreciation and expenses of the physical home, they have an average $354 accommodation profit a year left over.


*Source: S
tewartBrown Aged Care Financial Performance Survey Residential Care Report March 2016.

 

Articles Contributed By Stuart Hutcheon

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