Aged-care system not ready for rising tide of baby boomers: Anika Wells

Ageing baby boomers could see demand for high-end aged-care surge by 9 per cent annually for the next two decades, with nursing home beds set to almost double to 350,000.

Aged Care Minister Anika Wells says the aged-care system isn’t ready for the rising tide of boomers hitting their 80s. Picture: AFP

The ageing of the nation’s baby boomers could see demand for high-end aged-care surge by as much as 9 per cent annually for the next two decades, with the number of nursing home beds ­required set to almost double to 350,000.

Aged Care Minister Anika Wells says Australia’s aged-care system isn’t ready for the rising tide of boomers hitting their 80s, and the higher expectations they bring with them in terms of ­quality of care.

“We are at the precipice of the next great test of our aged-care system, the boomer generation,” Ms Wells will tell The Australian/Melbourne Institute Outlook conference on Wednesday.

“Unless we seek innovative models of care, embrace creativity, technology and international best practice we will not be ­prepared for the greatest impact on aged care this century – baby boomers.”

The first of the generation born between 1946 and 1966 turn 80 in just four years. They have transformed every industry they have confronted across their lives to date, and now it’s aged care’s turn, Ms Wells says.

“They have told us loud and clear they want to stay in their homes as long as possible.

“(But) at a certain point some will have to look to residential aged care, and they will expect a level of care they have worked hard over a lifetime to secure (and) have earned,” Ms Wells says.

Aged care is undergoing a rapid transformation in Australia as people opt to stay in their homes longer, bringing services into the home until they become too frail to stay and move into ­residential care.

This results in nursing homes being required to provide more intensive levels of care for people with higher levels of physical and mental decline. The average age for men entering a residential aged-care facility is 82 years and nine months and for women 85 years.

The October budget revealed the federal government will spend $27bn on in-home and residential care this financial year, rising to $34.7bn by 2025-26, just shy of funding for Medicare.

Despite the level of public funds pouring into the sector, the aged care royal commission last year found a system too often delivering substandard care, with shocking revelations about the use of physical and chemical restraints and poor standards of food served in some residential aged-care facilities. The commission made 148 recommendations in a bid to ensure older Australians lived out their final years with dignity.

The Albanese government came to office in May promising to fix aged care and in its first five months has enacted 37 of the commission’s recommendations, most recently to increase the minutes of daily care provided to nursing home residents.

But many providers continue to struggle to make the numbers work, with a recent sector analysis reporting an estimated two in three nursing homes in Australia operated at a financial loss last year. They lost an average of $14 a day a bed, despite a funding injection from the previous Coalition government of $10 a day a bed to improve care quality.

Occupancy rates have also fallen, the average now sitting at 91 per cent after being at 95 per cent in 2019.

Cost pressures in the sector are only expected to rise, both in the shorter term, with a key wage case currently before the Fair Work Commission calling for a 25 per cent pay increase for care workers, and over coming decades as the boomers, who have seen the standards of care their parents endured, make it clear they won’t cop it for themselves.

This is where innovation must come in, Ms Wells says.

“The baby boomer period spans 20 years. This is not a rogue wave, (but) a rising tide that swells for a decade or more before it peaks,” Ms Wells says. “Estimates suggest demand for high levels of care, including residential care, will surge by 5-9 per cent every ­single year as the boomers age.

“The current number of aged-care residents is around 200,000. By 2040, it will be close to 350,000 and this is despite the inevitable ­increase in home care.

“We can’t sandbag against this tide. We must build structures that protect us,” she says.