The Federal Department of Health has announced the winners of 10,940 new bed licenses. This follows applications lodged mid last year for 38,859 new residential aged care places which is double the number in 2014. This means only 28% of applications were successful. See the chart opposite.
Grant Corderoy, Partner at specialist aged care accounting firm Stewart Brown (pictured), says the allocation gives a clear view of the government’s view of new residential aged care development. He points out that top recipients are the private operators that can raise capital to fund new beds.
And Grant points out that most of those new beds are in the higher demand, higher RAD metropolitan markets.
This leaves the not-for-profit operators to refurbishing existing beds in regional, rural and remote locations, limiting their expansion.
BUPA won 1,345 licenses or 12.3% of all beds, nearly double Regis who came next at 844.
(BUPA actually won 673 but thanks to its purchase mid last year of Innovative Care from the Croft family for $250 million, BUPA picked up 672 that Innovative Care had applied for and won).
A surprise was Aveo who was awarded 371 bed licenses. They have five care facilities across the 89 villages they now operate. CEO Geoff Grady has stated they want to grow their care offering with plans of 100 new beds a year from 2017. These 371 beds apply to four locations including two new greenfield developments Springfield in Queensland (144 beds) and adjacent to the Norwest business Park in Sydney (144 beds).
BUPA, Regis, Allity, Japara and Estia have each stated they wish to grow by 4,000 to 5,000 beds over the next four years. Missing from this group of bed licence winners is Estia. It was awarded just 12.