Opinion
Cam Ansell predicts private aged care in retirement villages is the growth service

About 11 years ago Cam Ansell jumped ship from advisory group Grant Thornton to establish his own advisory group, Ansell Strategic. Today he is at the forefront of the reshaping of retirement living and aged care, thanks to his in-demand mergers and acquisition business. 

With this insight, at the LEADERS SUMMIT in Sydney last week, he made the prediction that is in the above slide – that affordable independent living villages, which he includes land lease communities, are going to shrink in number, not grow. 

He says in 2035, 11 years from now, there will be two hundred thousand residents enjoying ‘independent living’. This compares with today where 200,000 retirement village residents and 100,000 land lease residents live in affordable villages. The number will drop by 33%. 

Cam didn’t say it, but we predict village and land lease residents who are independent today will increase in acuity and be the private aged care clients of tomorrow while staying firmly in their current village and land lease homes. 

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At the moment 200,000 people live in residential aged care homes, with high acuity and dementia. He predicts that just another 50,000 people will increase this number to 250,000 by 2035. 

The real growth, he says, will be in assisted living, with 350,000 people enjoying lower levels of care support, and they will be paying a considerable amount of it themselves. 

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What this tells us, once again, is that village operators will see their business model fundamentally change. Instead of say three employees for a 100 independent resident village, it is likely to be 15 to 50 employees to deliver assisted living. 

As we stated in my Opinion piece last week, and confirmed by Cam at the SUMMIT, we are not building enough aged care beds.  

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Today a new aged care bed costs a minimum of $450,000 to build. Assume an average of $550,000 over the next 11 years, and the extra 50,000 beds will require $27.5 billion in funding. Add another $14 billion to refurbish dated beds and the cost is $40 billion plus. It is possible the funding will be available, but only just. 

Logic says private village operators will continue with the independent living model and Not For Profit operators, who already are in the care business, will generate the real growth providing private aged care or assisted living, depending on what you call it. 

It will be tough for the private village operators, having tough conversations with residents about leaving the village, and most likely failing and then having to adjust their business model and their duty of care.  

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