Last Saturday Adele Ferguson led the attack on retirement village operator Aveo once again.
It was a carefully developed execution commencing with an article in the top right-hand corner of Page 3 titled “Outcry over Aveo’s push into aged care”, followed by the lead article in the Businessday section plus a backup Opinion piece. All up, 4932 words – none complimentary.
Read them all HERE.
The thrust was that Aveo has introduced its Freedom model of private aged care, which residents “feel pressured to take up the expensive aged care package – whether they need it or not”.
The journalism is appalling. For instance, at no stage do they adequately explain what the Freedom model is, only that it has an expense. It is as the label says, private aged care. Aveo has added it as an optional service to its residents who live in independent living units – independently – if they should need or wish to move to a higher care model. It is their choice – which prior to the Freedom introduction they did not have.
There is expense involved, being the cost of higher levels of care. On paper it could sound expensive. In the articles they talk of about $38,000 a year plus a $100,000 DMF when the resident leaves.
Is $38,000 expensive? Providing high levels of care, meals and security costs this much. Personally in our family we were paying out approaching $70,000 cash each year for support over government funding to keep our parents out of residential aged care.
Our parents had no hesitation to incur these costs because it was their quality of life. They did not regard these as “excessive” or “gouging”, as Aveo is being portrayed.
Nor did we kids. We all made the choice that this was money that needed to be spent to deliver what our parents wanted. Isn’t it the same with both retirement villages and private aged care?
The simple fact is village residents (and their families) make the choice to join a village with a DMF structure which is to be paid on their departure. Similarly if they choose to utilise the Freedom model there is a DMF structure as well.
(Note: Aveo discounts the DMF if transferring from the village to the Freedom model. Also note that Aveo does not profit from care services – they operate on a break-even basis. This is not covered in the articles despite the journalists being repeatedly informed).
The challenge for the retirement village sector is the Fairfax crusade is already drawing regulatory review, including from unlikely places. Journalists are calling for the Australian Competition and Consumer Commission and the Australian Prudential Regulation Authority to investigate.
Any spotlight of course is welcomed but the sector needs to be able to present the facts succinctly along with the value it provides the customer, our residents.
These need to be prepared fast.
Aveo is being targeted because it is the only listed pure retirement village operator – it is on public view and it appears to be extremely wealthy. However their basic business model is no different from all operators who will also be dragged into the regulatory review.
Time for the sector to get on the front foot.