Aged care bed supply at a ‘crisis juncture’: report
Three in four of the nation’s nursing homes face years of sustained financial losses if Labor fails to act on the recommendations of its own taskforce, a new analysis warns.
Three in four of the nation’s 2600 nursing homes face years of sustained financial losses if the Albanese government fails to act on the funding recommendations of its own aged-care taskforce, a new analysis warns.
Persistent losses across almost 2000 residential care facilities through to at least 2029 would inevitably see more closures, especially in rural and regional areas, at a time Australia’s ageing population requires more beds and more services, the report by leading aged-care accountancy firm StewartBrown finds.
Already half the nation’s nursing homes are losing money, StewartBrown partner Grant Corderoy said in the Aged Care at the Crossroads report, with aggregate losses over the past five years hitting $5bn.
“The lack of financial sustainability has significantly restricted new builds and innovation, and the sector is now at a crisis juncture where there is a significant risk that sufficient aged-care beds will not be available to meet the future demand,” Mr Corderoy said.
“Whilst currently over 50 per cent of all aged-care homes are operating at a loss, if there is no funding reform then up to 75 per cent of homes are projected to operate at a loss, which will inevitably lead to further home closures.”
The analysis shows the bottom 75 per cent of homes in terms of financial performance are currently losing $14.82 per bed per day, and if no reforms are made will continue to make significant losses each year through to 2029, when they will still be losing $14.09 per bed per day.
Mr Corderoy was a member of the government’s aged-care taskforce put together last year to look at the sector’s financial sustainability. It was chaired by Aged Care Minister Anika Wells and run by the Department of Prime Minister and Cabinet.
It reported to the government in December with a series of recommendations, including that older Australians with the means pay more for the non-direct care components of their aged care, such as accommodation, food, cleaning and gardening.
The government has yet to formally respond to the taskforce report or put forward the content of a new aged-care Act as proposed by the royal commission, despite committing to enact legislation in this term of parliament for commencement next July.
It is understood the government has been looking to negotiate a bipartisan approach to the aged-care Act, but the talks have dragged on for months.
The Coalition is understood to be seeking further stakeholder consultation on issues such as criminal sanctions for directors and officeholders of aged-care providers and some of the thresholds before personal financial contributions are required.
Hopes the legislation would be put before parliament ahead of the winter break were dashed, leaving the sector worried momentum for reform was stalling and more providers would be forced to close their doors.
Both provider and consumer advocates have raised concerns that unless the draft legislation is put to parliament in the next two sitting weeks starting in August there will be insufficient time to see it pushed through.
“The sector cannot continue to operate in this climate of legislative and funding uncertainty,” Mr Corderoy said.
“We don’t need further stakeholder consultation before we get a response from the government and the opposition. Let the recommendations be tabled and then we can discuss the nuances.
“Time is of the essence. It is now time for the government and opposition to provide a clear and unambiguous response.”
The StewartBrown report notes that the lack of financial certainty in the sector is already seeing older homes closing and not being replaced by new ones, even though demand is rising.
The taskforce’s final report estimated an investment of $37bn would be required to build the additional aged-care rooms needed by 2050, with a further $19bn required to refurbish and upgrade existing aged-care rooms. In the next six years alone $5.5bn would be required for refurbishment and upgrades.
In recommending a greater user-pays system, the taskforce warned that “current funding arrangements will not deliver the required amount of capital funding”.
The StewartBrown report noted that failing to invest in aged care affected the broader health sector.
“The shortage of beds particularly affects the health sector where ‘bed blocking’ occurs when an elderly person remains in hospital due to an aged-care bed not being available. This also impacts persons needing to enter hospital and no bed is available for them,” it says.
The government and opposition say good-faith negotiations on aged-care reform are ongoing.
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