89.4% residential occupancy figure may not be accurate – because Government not analysing data, Mirus Head of IT says

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It’s Manager IT and Projects Tyler Fisher says the data the Government is relying on to report occupancy may be skewed – and the true occupancy rate may be higher.

Mirus – which offers advisory services and online software for providers – recorded occupancy for the 71,000 beds it has under management at 90.38% in November.

Tyler explains the Government relies on Medicare reports which are the number of licenses allocated to a facility and the number of residents – for example, a facility has 100 licenses and 80 residents equals 80% occupancy.

But many providers don’t match the Medicare figures because they may have beds offline for refurbishment or be running a smaller facility to reduce costs.

So, your 100-license facility may only have 90 active beds – pushing occupancy up to 88%.

“If data is really going to be the future, there’s a long way to go,” Tyler concludes.

He puts the decline in occupancy since 2015 down to a range of factors – firstly, the options available.

Some areas are over-saturated with facilities – others are facing a dearth.

It is not always easy to rely on population forecasting for new beds because people entering residential care may move to be closer to their children or from a metropolitan to a regional area – a problem that has been somewhat alleviated by the new legislation to move aged care places that passed in September.

The higher acuity of residents is also a factor.

Tyler says they find clients who do not have a minimum care requirement – and a CFO who wants to fill beds – tend to take on residents with lower acuity to fill beds – leading to a higher occupancy – but this also reduces their subsidy (and makes it harder to adjust rostering to suit – a Mirus business solution, pictured below).

(He adds that residents often experience a ‘bounce’ after they enter residential care – when their nutrition, hygiene and clinical care improves – further delaying higher subsidies.)

Among their clients, For Profit providers have the higher tolerance for empty beds – which is seen in their figures.

As of 30 November 2019, their Not For Profit clients had 91% occupancy while the For Profits were sitting at 88.9%.

However, the difference in the level of subsidy was considerable – $175.86 for NFPs to $188.26 for the Privates.

Tyler also points out the release of new bed licenses always drives occupancy downwards, and with the next round due in 2021 and new stock coming online, he does not expect to see a rise in occupancy levels before then.

Despite this, he says there is always new demand which is what the Government has been preparing for with the release of new licenses.

“That’s the one thing the Government seems to have had the foresight for,” he said.

So, it’s not all ‘doom and gloom’ then as they say, though Tyler warns providers must still need to align their costs to their revenue and that means having data around occupancy and visibility around subsidies – and using these to guide business decisions.