Aged care sector needs urgent staffing uplift and $55B for new and old beds – Plan B is the only answer post-election

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The latest analysis of the aged care sector’s financial performance appears to spell further ‘doom and gloom’ for operators – but there is a solution.

As the politicians are preoccupied with ensuring their party is elected in Saturday’s Federal Election, this week has seen the release of yet another report underlining the serious underfunding of Australia’s aged care sector.

UTS’ Australia’s Aged Care Sector: Mid-Year Report (2021-22) is a thorough – and concerning – look at how the sector is faring financially.

Critically, it underscores that the situation will not improve over the next 18 months as the residential care sector competes with home care for staff while more Home Care Packages roll out and the new minimum staffing standards are introduced in October 2023.

“The initial introduction of AN-ACC [in October 2022]will increase care subsidies,” it states. “However, that increase is expected to be consumed by required increases in direct care staffing minutes and the wage rates of the workforce for many providers, leaving little available to fund other improvements in quality of care and quality of life.”

The report also points to Aged Care Financing Authority modelling that there will be the need for refurbishment of 60,000 beds and another 79,000 new places over the next decade.

“This will require capital investment of an estimated $55 billion. Investment in new technology, equipment, process improvement to increase quality of care, efficiencies and reduce operating costs will require further capital investment. However, the poor operational returns from aged care services makes attracting capital investment difficult, which will be an ongoing challenge moving forward.”

It is a dire picture.

But there is a solution.

Regardless of the result, this weekend will see a new Government put in place.

With the electioneering out of the way, the politicians will be able to return to their day jobs – and the sector will be able to begin to advocate for change.

Currently, providers are hamstrung by legislation in what they can charge for services – additional services are the only area where there is some leeway.

The majority of providers cross-subsidise services – or draw on capital reserves – to stay afloat.

But introducing Plan B or co-contributions for aged care accommodation and everyday living services would help to improve services for consumers and fill the funding gap for providers.

Post-election, it is time for action.