The Department of Health and Aged Care’s Quarterly Financial Snapshot for the March 2023 quarter reflects the second quarter since AN-ACC funding model took effect and shows the financial performance of the sector has improved. 

Collectively, For Profit and Not For Profit residential aged care providers returned on average a net profit before tax of $3.9 million for the quarter. Providers eked out an average net profit before tax of $0.23 per resident per day in the March quarter, an improvement of $12.89 per resident per day on the September quarter result, when providers lost a huge $27.90 before tax for every resident, every day. 

“This is the first quarter in the 2022-23 financial year that a positive net profit before tax position was achieved,” the 38-page report states. In fact, it has been some years since residential care providers turned a profit.

In the third quarter, operating revenue from Government funding and resident contributions increased, and expenses fell, the report states. 

The Quarterly Financial Snapshot cautions that profitability could deteriorate in the fourth quarter as “expenses are likely to increase in the April to June quarter to account for end of financial year adjustments of one-off expenditure”.

For the year to date, providers recorded an average loss before tax of $13.48 per resident per day. The total net loss before tax for the sector was $674.4 million. 

Occupancy, which was included in the 38-page report for the first time, was only 86.0%, with Not For Profit providers recording higher rates of occupancy on average than their For Profit counterparts.
 

The total average care minutes per resident per day for the sector was 190 minutes, an increase of one minute per resident per day from the second quarter. The sector average care minute target for the March quarter was 196 minutes so providers are behind. Mandatory requirements for 200 care minutes per resident per day come into effect on 1 October.

You can read the Quarterly Financial Snapshot in full here.

The SOURCE: With labour costs likely to rise further as care minute requirements come into effect on 1 October and one-off expenses and end-of-year adjustments expected, the good news is likely to be brief.