The conversations of life

45 per cent of aged care facilities now in the red – why we can’t wait for the Royal Commission to reform aged care


This week, the latest aged care survey by respected aged care accountants StewartBrown was released. Covering 40 per cent of facilities across Australia, it’s a snapshot of what’s really happening in the sector – and as expected, the news is not good.

45.1 per cent of facilities reported an operating deficit for this financial year, while 21.2 per cent had a cash loss from their operations. Regional, rural and remote locations were the worst-off, with over 63 per cent operating at a loss.

Overall, facilities are making an average of $816 per bed per year – that’s $15.69 per bed per week.

There is no fat here to improve services.

The rising costs of care

StewartBrown puts the figures down to a range of factors. Staff costs which are around 70 per cent of costs and jump three per cent every year.

Increasing compliance has also administration costs. Refurbishment of existing ones is required every 15 years – this has to be added in to costs.

Reassuringly at least, care hours have not dropped and actually increased slightly to 3.06 hours from 2.91 hours last year so we know that staff are still doing the best they can to care for our loved ones.

Facilities closing in the US

But it is a dire situation – and one I was reminded of again reading about the state of nursing homes in the US this week.

There, hundreds of homes have closed due to fixed government funding and regulatory requirements. People are preferring to receive home care rather than move into an aged care facility, in part because they can’t afford it.

But what then for those residents who do need the support of residential aged care – how will facilities be able to employ enough staff when they can’t afford to pay for them?

That is not a situation that any of us want here.

Recommendations waiting to be implemented

The good news is that the Royal Commission will be looking into the funding model and how we can contribute more while still supporting those who cannot afford to pay.

However, it’s also a reminder that the Government needs to keep making reforms while the Royal Commission is underway. It doesn’t report fully until 2020.

There are already several reports by David Tune, Kate Carnell and Professor Ron Paterson sitting on the Government’s desk waiting to be implemented that make a wide range of recommendations to improve aged care quality, standards and funding – including the need for us to pay more for our own care.

While the Royal Commission will set up the system for the next 10 to 20 years, we need to start making changes now – not only for our mums and dads, but also for our future selves.

We hope the Government comes to the same conclusion.

A practising aged care physiotherapist for the past 13 years, Jill has worked in more than 50 metropolitan and regional aged care homes. She has also toured care facilities across the US and Africa. She is a passionate advocate for both the residents in aged care and the staff that serve them.

Leave A Reply