Different funding arrangements are causing problems: ACSA

ACSA is calling for a review of the Multi-Purposes Services (MPS) program following a budget increase for state-run services that could impact the viability of other rural aged care providers.

Inside Ageing reported last week the budget allocation for the MPS program had been boosted by several million dollars and will continue to increase by $6.8 million each year.

In response to the funding announcement made by Aged Care Minister Ken Wyatt, ACSA CEO Pat Sparrow said the MPS program is no longer meeting its original purpose and the different funding arrangements for state-run services are causing problems.


“Multi-Purpose Services were originally located where there were no alternative aged care services. In addition they were designed to strengthen the viability of both health and aged care provision in small rural and remote communities. But now there are some aged care providers delivering services in those areas, and with the MPSs operating under different funding arrangements, that does create some difficulties,” she said.

“To ensure that aged care providers are viable and that older people can continue to access aged care services in their own communities it is time for these arrangements to be reviewed.”

LASA CEO Sean Rooney sees it differently.

“Multi-Purpose Services (MPS) are a key part of the aged care services system and they specifically meet the needs of older Australians in rural and remote areas,” he said.

“Given that we know rural and remote or state owned aged care providers are generally not financially sustainable within the current funding model, LASA welcomes any additional funding that ensures older Australians have access to care and services in regional, rural and remote communities.”

The outlook for many rural providers is concerning, with the most recent data from the Aged Care Financing Authority (ACFA) showing the average EBITDA margin for not-for-profit facilities is only 10.9% and the average profit is $9,318 per bed per annum, according to Ansell Strategic.

“Whilst the sector performance is improving, there is still at least a quarter of the industry making a loss, with the lowest performing quartile reporting an average EBITDA loss of $5,814 per bed per annum,” David Cox, Head of Operational Strategy at Ansell Strategic, said, confirming the increased viability supplement is still “universally less” than the average cuts to the ACFI funding.

Although the biggest impact of the ACFI changes will not occur until 2019-20 when the majority of residents will have transitioned to the new CHC funding classification, Mr Cox warned providers across the sector will be exposed to operating losses before then which will impact their long term viability.

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