70% of aged care homes at risk – user pays the only viable funding solution

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‘Plan B’ – a user pays system to allow consumers to contribute to the cost of their aged care services – is the only rational answer to deliver quality of care for consumers and the workforce and ‘optimism’ that residential care and home care operators need to remain viable into the future, according to StewartBrown Senior Partner Grant Corderoy.

“The only viable solution for the sector is to have a different funding model if we want to have the quality care, retain our workforce and improve career pathways, we have to be fair on the next generation who are already going to inherit a substantial debt,” he told SATURDAY.

“We must achieve user pays – we now need to make it easy for the Government to understand the priority of this reform.”

Why now?

Grant says that without urgent reform, up to 70% of aged care homes will be running at a loss within three to five years.

In StewartBrown’s September 2021 quarterly survey, operators recorded an operating loss of $7.30 per resident per day – despite the $10 a day Basic Daily Fee supplement from 1 July.

“Without the supplement which was not required to be fully acquitted, there would have been a $14-$15 a day loss compared to the previous year,” said Grant.

The current home care funding model also provides a disincentive for providers to ask consumers for a contribution because of the high rate of unspent funds and the shorter length of time spent in Home Care Packages (HCPs).

With the Government $960 billion in debt due to COVID-19, the only answer is to ask consumers to contribute a greater amount for their care or ‘Plan B’.

To hear more about ‘Plan B’ check out the full story in this week’s issue of SATURDAY, in your inbox at 6am, Saturday 5 March. Subscribe for full access HERE.

Hear Grant speak live at the LEADERS SUMMIT, Thursday 24 March and Friday 25 March, in Brisbane, Sydney, Melbourne, Adelaide and Perth. Register HERE.