The Aged & Community Care Providers Association (ACCPA) has sounded the alarm about the latest StewartBrown sector data, which shows that just over two thirds of residential aged care providers are operating at a loss.
In the nine months to March 2022, aged care homes posted an average loss of $12.85 per resident per day, which StewartBrown predicts will rise to $15.59 by the end of this month; this position has steadily worsened since 2018.
In all, 64% of mature aged care homes recorded an operating loss over the three quarters, with 38% reporting an EBITDAR loss.
“It seems a very reasonable proposition is that residential aged care has now reached the fiscal cliff,” the report reads.
“It is the opinion of StewartBrown that after five years of significant aggregate operating losses in the residential aged care sector, that structural funding reforms (including care recipient co-contribution) are essential.
“However, to avoid closure of homes and reduced service delivery, especially in regional locations, an emergency funding package needs to be delivered in the short term to ensure current viability and allow for the necessary funding reforms to be properly implemented.”
According to ACCPA Interim CEO Paul Sadler (pictured), these figures confirm evidence that residential aged care providers are struggling under increased financial pressure.
“Based on these figures, many providers could be forced to leave aged care unless there is additional funding to allow providers to meet the increasing costs of providing quality care and support.
“It is clear that aged care workers need a significant pay rise, but without additional support, aged care providers will be unable to attract more workers and to realise improvements in the quality of care,” he said.
South Australia was the least hard hit, with an average operating loss of $5.96 per resident per day, compared to $30.51 in the ACT.