Research: A perfect storm in aged care

A recent study of industry challenges underscores the perfect storm facing aged care. Providers are struggling to cope with a ‘triple whammy’ of a staffing crisis, increased compliance costs and reduced revenue. Inside Ageing partnered with Catalyst Research to explore the biggest problems facing industry leaders. 56 providers submitted their thoughts.

Almost all (96%) cited staffing as a key concern. As one executive stated, “I have never in 35+ years as a health professional and senior leader in aged care, seen such workforce shortages and operational losses”. Seven in ten have increased recruitment and over half are boosting retention activities. Four in ten have invested in new technology to improve efficiency.

On average, providers seek to grow their workforce by 15% in the near term. One in three sees the industry pay increase as beneficial, though half say it’s too early to say if this will make a difference.

Many are not targeting a specific industry in their recruitment activities, though some are focusing efforts on healthcare (39%) and hospitality (24%). Industry uncertainty adds another layer of complexity to staffing.

Cam Ansell of Ansell Strategic highlights the impact of government reforms on retention, particularly senior management.

“It’s hard to keep good people if they don’t see a future for themselves”.

Cam Ansell

Increased compliance costs are mentioned by three in four as a major issue. On average, providers report a 32% increase since the Royal Commission. This has a knock-on effect on employee effectiveness.

“More compliance documentation takes RNs off the floor,” suggests one executive.

“Regulatory changes and compliance burdens are way too costly to administer and put stress on overstretched resources,” says another.

The financial impact of compliance is considered not adequately accounted for in funding arrangements, impacting provider sustainability. Over half state that revenue shortfalls are a key issue.

Again, respondents highlight the calamitous interaction between these factors.

“Financial caps limit our ability to recover costs and maintain quality goals” indicates a RAC executive.

These insights are consistent with the recent Stewart Brown report on provider profitability. As senior partner Grant Corderoy points out, “The inadequate revenue stream from consumers who can afford RAC is the issue – this is the basis of underfunding!”.

Inside Ageing and Catalyst Research thank participants who contributed to this study. Each respondent will receive a more detailed report in recognition of their contribution. We envisage future studies to explore how providers navigate current and emerging challenges.

The full report is priced at $1,800 plus GST and is available for purchase. To obtain a copy: – upon payment a copy will be emailed to you by Catalyst Research.


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