Additional concerns around aged care and home care rolls into the new year

Concern around the increasing financial distress of aged care facilities has continued into the new year, even after peak bodies and aged care industry organisations came together in December to call for urgent Government assistance.

A recent survey from StewartBrown, a chartered accountant firm, has found further financial struggles among residential care and home care providers, who have been forced to cut costs where possible to remain viable.

Peak bodies say the financial issues now affecting home care providers will have a run-on effect to quality care and the current waiting list for home care services.

Non-profit aged care peak body, Aged and Community Services Australia (ACSA), has again called for more Government support following this new analysis, which shows the state of the finances of aged care providers is continuing to deteriorate.

In the StewartBrown report, it states that costs are rising faster than the incoming revenue for providers, who require $8.25 per residential care bed per day so they can provide residents with everyday living services.

Patricia Sparrow, ACSA Chief Executive Officer (CEO), says the increasing cost has resulted in 51 percent of aged care homes recording an operating loss in both regional and metropolitan areas.

“More than half of aged care homes are struggling to remain viable, that’s something we need to fix urgently if we want to avoid closures and maintain proper aged care services,” says Ms Sparrow.

ACSA believes that while home care providers are fairly better than their residential care counterpart, they are doing so through cost-cutting, which could impact service quality.

The StewartBrown report found 30 percent of HCP providers, who were sampled, reported a financial loss before tax in 2018-19 financial year.

The Home Care Packages Data Report for 1 July to 30 September 2019 was released by the Aged Care Financing Authority (ACFA), which suggested changes to the home aged care administration, with savings going towards improving the home care queue.

Ms Sparrow says, “The report revealed 112,237 people are still on the waiting list for their approved Home Care Package and while this is a welcome slight drop on the previous quarter, it is still simply not good enough.

“We know the knock-on effect of waiting for packages is older Australians going into hospital or residential care earlier and putting more avoidable pressure on those systems.

“The measure currently being considered by Government to manage unspent funds could help meet demand and reduce unacceptable waiting times by providing additional high-level packages to older Australians.”

From ACSA’s own Home Care Packages Program Data Report, out of the 112,237 people (numbers from 30 September 2019) waiting for a package, 49,295 people have been offered a temporary Home Care Package and 62,942 who have not received any Home Care Package.

Leading Age Services Australia (LASA), aged care peak body, believes the plan to use unspent funds on the home care queue is necessary to stop people waiting for the care they need.

However, the peak body is concerned that this new Home Care Packages (HCP) program payment structure may be a struggle for providers to transition to.

Tim Hicks, Acting Chief Advocate at LASA, says, “The current queue is appalling, with over 112,000 older Australians waiting to receive packages at their approved level. LASA supports the payment administration changes in-principle, as long as all savings are used to boost Home Care Packages.

“At the same time, the ACFA report raises serious risks associated with the Government’s suggested implementation and timeframes, with more than 80 percent of LASA’s surveyed providers reporting cash flow concerns ranging from somewhat challenging to unachievable.

“We are worried some providers may not be able to afford to transition to the changed HCP payment arrangements without adequate safeguards, leaving care recipients in limbo.

“It is also imperative the Government provides timely advice to both older Australians and their care providers about details of the planned changes and any impacts on care delivery.”

LASA is still calling for a further $1.3 billion in funding to help the aged care sector stay on its feet and weather the current financial stress.

The StewartBrown report suggests that the unspent funds have risen every quarter to nearly $800 million.

To read the StewartBrown report, go here; to view the ACFA Report, click here, or to see the ACSA’s Home Care analysis, read here.