The Aged Care Financing Authority (ACFA) has released its 2017 report on the funding and financing of the industry and it makes for interesting reading.
Total profit for the sector was $1,063M, an increase of 17.2% from $907M last year.
Aged care providers have increased their revenue to $17.4B for 2015-16 or $263.92 per resident per day, with 69% of providers achieving a net profit meaning 31% didn’t.
The sector also spent $16.3B, an increase of 8.1%, representing $247.58 per resident per day.
However this includes $1.3B of ‘other’ income – suggesting operating profits are dependent on this ‘other’ income, rather than Govt funding, as they have increasingly been in recent years.
Private providers also dominated the figures, with an average EBITDA per resident per annum of $13,908 compared to $10,182 for the Not For Profits and -$12 for Government providers (ie they made no surplus).
As usual, metropolitan providers also performed better than regional services with an average EBITDA per resident of $11,701 per annum compared to $9,046.
Other snippets from the report include:
- Total EBITDA was $1,985M, up from $1,776M, a jump of 11.8%;
- Average EBITDA per resident per annum grew from $10,222 to $11,134, an increase of 8.1%;
- The average occupancy rate in residential care was stable at 92.4%; and
- The average number of supported residents was 46.8%, up from 47% in 2014-15 and 44.4% in 2013-14.
The figures sound positive. However ACFA warns that the $1.8B in aged care funding cuts from last year are starting to bite.
“The changes to the Aged Care Funding Instrument (ACFI) to date are being reflected in marginally reduced financial results as at March 2017, and that results may decline further as the full effect of the ACFI changes and indexation pauses take effect,” the report reads.
Govt providers are also the weak link: “Without the government providers (which represent 10 per cent of all residential care providers) included in the analysis, the average EBITDA of the remaining sector would be $524 or 5% higher than the $11,134 reported.”
Food for thought.
Check out the report here.