Estia nursing home residents infected; announces write down

COVID-19 spreads to vulnerable nursing homes as Estia announces write down of up to $148m.

Estia added it had made iPads available to its residents so they could continue to communicate with their families. Picture: BRENDAN RADKE.

Melbourne’s spike in coronavirus infections is continuing unabated almost a week after Premier Daniel Andrews enforced a strict lockdown, with 13 elderly residents in a nursing home run by listed aged-care provider Estia among the latest victims.

Estia confirmed the infections — all at its home in Ardeer, about 9km north of Victoria’s previous coronavirus epicentre, Cedar Meats — in a day of high drama that included a writedown of up to $148m.

Estia initially reported that while two of its staff working across three of its homes in Melbourne had tested positive, its residents remained COVID-19-free. It quickly then requested a trading halt before confirming around midday that 13 of its residents had been infected with the coronavirus.

Another aged-care home, Menarock LIFE in Essendon, also reported that 14 of its residents and 17 staff members had tested positive to COVID-19 and had been transferred to hospital. Estia and Menarock’s infections raised the number of new cases in Victoria on Monday to 177.

Despite the fresh spike in coronavirus cases, and most people following government advice in avoiding high-risk settings such as hospitals and nursing homes, Australia’s second-biggest private hospital operator Healthscope urged people not to delay urgent medical treatment after it reported a sharp fall in emergency department presentations.

The Victorian coronavirus surge has put health stocks on edge, with Goldman Sachs analysts singling out Australia’s biggest private hospital, Ramsay, as the most exposed, given 20 per cent of its revenue comes from Victoria.

Estia confirmed its corona­virus cases after announcing a writedown of between $124m and $148m, and that it had successfully secured $5.8m from the federal government to help cover the extra costs of caring for its highly vulnerable residents during the pandemic.

The NSW Nurses and Midwives Association cautioned at the start of the pandemic about the virus spreading into aged-care homes, given the sector’s highly vulnerable resident population and lack of nursing and trained infection control staff.

Estia said that while residents “continue to enjoy normal activities and movement within the homes”, it had followed correct infection control procedures.

“Neither employee worked while showing symptoms of the illness,” Estia’s board said in a statement to the ASX. “All infection-control precautions were put in place immediately upon notification and we are working with the Victorian Health Public Health Unit and the Commonwealth Department of Health to monitor this situation.

“Strict protocols and testing remain in place at all homes and will do so for the foreseeable ­future, including testing of all new admissions.”

The company said it had enforced tight restrictions late last month following the fresh spike of coronavirus cases in Melbourne. “The decision was taken on June 29 to reintroduce visitor restrictions in the company’s 19 Melbourne metropolitan homes, except on compassionate grounds,” it said.

Estia added it had made iPads available to its residents so they could continue to communicate with their families.

“We continue to employ additional staff to assist with resident/family communications,” it said. “The residents continue to enjoy normal activities and movement within the homes.”

Estia’s board blamed “ongoing uncertainty of future sector funding and financing, exacerbated by the issues arising from the COVID-19 pandemic”, for the $124m-$148m writedown.

It said the writedown was non-cash and would not have an impact on the company’s debt facilities, compliance with banking covenants or its ability to undertake capital management activities.

Despite the uncertainty from the pandemic, Estia’s board said its occupancy rate had begun to recover towards pre-coronavirus levels of 93.8 per cent.

“Occupancy in mature homes, representing 5946 operational beds, was 92.7 per cent at June 30, having improved gradually since May in line with the easing of home and community restrictions arising from the COVID-19 pandemic,” the board said.

“Second-half occupancy was 92.6 per cent over the six-month period, and full 12-month occupancy was 93.2 per cent.”

Healthscope chief medical ­officer Victoria Atkinson urged people not to delay medical treatment, following Victoria re-entering stage-three restrictions and miss what may be a critical undiagnosed health issue. She said when the state was last in lockdown, during April and May, emergency department presentations plummeted 20 per cent.

“Most concerning, cardiology admissions were down by as much as 40 per cent, meaning people were ignoring potentially dangerous chest pain symptoms,” Dr Atkinson said.

“All too often we see individuals present at our emergency departments with a complaint that, had it been ignored, might have led to serious longer-term repercussions.

“The current restrictions do not and should not prevent people from seeking medical care.”

Dr Atkinson said Healthscope’s hospitals had implemented measures to protect the health of patients, staff and doctors.