Aged care providers face increasing threats to finances

Researchers from the UTS Ageing Research Collaborative (UARC) have released a new, independent report into the aged care sector.

Australia’s Aged Care Sector Report  is the first in a series of biannual surveys examining the viability of aged care providers, the availability of skilled workers and the sustainability of subsidised aged care services.

“Australia’s aged care sector faces many complex issues concerning the quality of care provided to senior Australians and the sustainability of delivering that care,” said Professor Mike Woods, Chair of the report’s Editorial Board.

“The aim of this report is to provide a strong evidence base to underpin public debates and to guide decisions on future policy and operational reforms,” he said.

The report finds that many aged care service providers face increasing and acute threats to their financial viability. More than 60 per cent of residential aged care homes are operating at a loss, and the financial performance of home care services declined by 26 per cent compared to the previous year.

“Across the sector, the financial performance of aged care service providers has worsened compared to last year, raising serious concerns about the financial viability of services that senior Australians depend on,” said lead author Dr Nicole Sutton.

In relation to staffing levels, the report finds that only 5 per cent of surveyed residential homes have a direct care workforce that would exceed the sector average minimum staffing standards legislated by the Government in response to the Royal Commission into Aged Care Quality and Safety.

Direct care staffing time in residential homes increased by only 1.9 per cent compared to last year.

Across the sector, the financial performance of aged care service providers has worsened compared to last year, raising serious concerns about the financial viability of services that senior Australians depend on.

Dr Nicole Sutton

“Despite community and political pressure to fix the aged care workforce, aged care providers are struggling to improve staffing levels,” Dr Sutton said. 

“Staffing shortages have been a perennial challenge but have worsened in the last year due to COVID-19 disruptions and the rapid expansion of home care services.”

The report also shows that staffing time has continued to fall in home care. On average, across all package levels, home care clients receive about 32.6 minutes of care time a day, which is 32.1 per cent lower than five years ago.

The authors note that workforce problems are likely to worsen in the coming year with the release of more home care packages and the introduction of minimum staffing standards in residential homes.

However, the report also highlights a number of reforms currently underway that will help address these issues, including a new funding model for residential care, the design of a new Support at Home Program and announcements made in the Budget 2022-23 and by both major parties in the lead-up to the Federal Election.

The report’s analysis is based on de-identified data from the latest survey conducted by StewartBrown, a chartered accountancy firm that collects financial and workforce data from aged care providers and provides them with benchmarking and advisory services. The survey includes around 1,192 aged care homes and 55,821 home care packages. 

Read the full report.