Latest StewartBrown survey: Temporary tailwinds and ongoing headwinds, especially in regions

StewartBrown's September 2023 report

The StewartBrown September 23 (3 months) Aged Care Performance Survey is based on financial data and input from 1191 aged care homes (98,226 beds) and 64,423 home care packages

Despite improved operating results in the September 2023 quarter, the report points to future cost implications, including meeting legislative requirements, 24/7 nursing coverage, and compliance measures.

The improved performance is attributed to increased AN-ACC subsidies and transition benefits as providers adapt to mandatory direct care minutes. However, the report warns that as the taxpayer-funded margin diminishes, overall sector sustainability, necessary investments, and encouragement for innovative care models will face continued pressure.

Currently, the government funds over 96.5% of direct care costs, but daily living and accommodation services operate at a considerable loss, the report advocates for increased consumer contributions – a strategy currently being considered by the government.

In terms of operating results, residential aged care homes achieved a marginal surplus of $0.89 per bed day, a significant improvement from the previous year’s $21.29 deficit.

Increased occupancy to 92.7% in September 2023, up from 91% in September 2022, contributed to the positive outcome as did the failure of most homes to deliver the mandated 200 minutes of care while still receiving government funding.

The above chart illustrates that the top 25% of homes provided an average of 182.56 minutes of care, which is 32.6 minutes less than the least profitable homes, averaging 215.14 minutes of care.

In the home care sector, revenue per client per day increased by $9.39, reaching $75.78, reflecting a 14.1% rise. However, the average operating profit per client day decreased to $2.23 from $3.56 in September 2022. Unspent funds per client have surged, exceeding $3.2 billion nationally. Staff hours per client per week increased, care management costs decreased, and administration and support costs rose to 26.5% of revenue.

The report emphasises ongoing financial challenges, especially in rural and regional areas that face unique challenges to their urban counterparts, despite receiving the same level of funding. The recent Australia’s Aged Care Sector Full-Year Report 2022-23 by UTS highlights the scale of losses and comparisons to other areas.

Australia’s Aged Care Sector Full-Year Report 2022-23, UTS Ageing Research Collaborative (UARC)

One of Australia’s largest regional providers, Whiddon, recently called for an urgent review of the funding model for regional aged care.

Despite their vital role in these communities, the funding model overlooks the additional challenges faced by rural facilities, including employment difficulties, logistical intricacies in transportation and sourcing supplies, maintenance hurdles, and the need for comprehensive support.


Please enter your comment!
Please enter your name here