Stewart Brown survey confirms ACFI ‘clawback’ of aged care funding – 28% of facilities operating at a loss

The Half Yearly Stewart Brown survey of 553 Residential Aged Care facilities to December 2012 proves conclusively that aged care bed income is not keeping pace with costs. They report:
Across the survey the average facility result was $7.06 per bed day which is less than the $8.24 per bed day average result for the year to June 2012.
The average facility EBITDA was $7,166 per bed per annum compared to $7,621 for the year to June 2012.
The overall EBITDA was $7,450 per bed per annum compared to $7,994 per bed per annum.
These results were achieved on an average income of $197.02 per bed day.
The facility result represents a return on income of only 3.8% per annum which is down from 4.25% at June 2012.
The graph shows that in the early stages of ACFI the average results were in sharp decline.
Instead of the seasonal recovery in results in the September quarter there has been a continual decline.

71.8% of facilities in this survey (June 2012: 77.8%) made an overall surplus taking into account all sources of income and expenditure.

• An average increase of $3.37 per bed day in income from June 2012
• An average increase of $2.73 per bed day in care costs
• An average increase of $1.88 per bed day in other operating costs
Consultants taking advantage of ACFI – was the Government right?

Leading up to the May 2012 Productivity Commission report on aged care and its future structure, the Government staged a background media beat up, arguing that consultants were advising care operators on how to ‘manipulate’ ACFI to increase income per resident.
The Stewart Brown figures below would appear to support the Government’s argument. It also supports the LASA and ACSA arguments that the sector is going to lose an additional $300M+ a year with the new ACFI rules, contrary to Government claims.

Year on year increases in care subsidies and resident fees income across all facilities in our survey since 2007.

2007 / 2008 4.7%
2008 / 2009 5.7%
2009 / 2010 6.4%
2010 / 2011 10.8%
2011 / 2012 7.5%
2012 / 2013 1.3%

Note for retirement village residents: electricity increases by 17% in 6 months. Rates up 144% in 5 years
Relevant for retirement village residents when it comes to budgets, the Stewart Brown report also details utility cost rises.

“The cumulative increase in both rates and electricity since 2007 is far greater than the increase to the CPI over the same period”.

“Electricity costs have risen by 111% in that period and rates by 144%. In the six months to December, electricity costs have increased by 17%”.