Aged care costing study puts resident costs $100 higher than the current AN-ACC funding

Scyne Advisory, formerly known as PricewaterhouseCoopers Consulting (Australia) Pty Ltd, has conducted the 2023 Residential Aged Care Costing Study for the Independent Health and Aged Care Pricing Authority (IHACPA).

The study aimed to inform pricing for residential aged care services in the 2024-25 financial year using the Australian National Aged Care Classification (AN-ACC) funding model. The findings also contribute to the development of costing standards, data request specifications, and recommendations for future cost and activity data collection.

The Costing Study, which ran from January to November 2023, involved collecting financial and direct care time data from 118 representative aged care facilities. Direct care time data was gathered using Bluetooth proximity devices worn by staff and residents, resulting in over 7 million direct care minutes observed for 4,598 residents. The study revealed averages such as 20 interactions with staff per resident day and 52 direct care minutes per day for permanent residents.

Financial data was collected from existing reports and validated for 111 facilities, with three expense streams, including care, hotel, and accommodation, allocated based on direct care minutes and occupied bed days.

The average daily cost for all participating permanent residents was $352, varying by AN-ACC class, remoteness, provider type, and facility size. AN-ACC class 3 exhibited unexpectedly high costs, possibly due to a small sample size. By comparison, the current AN-ACC price is $253.82.

The study also explored indirect care time practices, finding that 44% of costs were attributable to specific residents, while 56% were shared across all residents. Recommendations from the study included expanding sample sizes, flexible engagement with specialised populations, ongoing investigation of indirect care time allocation, and targeted studies on the cost of delivering aged care services to new residents.

Data quality and security recommendations focused on alternative avenues for data collection, QFR template modifications, and improved data transfer processes. Sector engagement recommendations included developing a roadmap for evolving costing capabilities and maintaining a customer relationship management tool for aged care providers. The study aims to ensure robust and reliable data for future pricing advice in the aged care sector.

View the full report here


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