Home care sector earnings rebounded in 2023-24 after declining for three straight years, according to the Department of Health, Disability, and Ageing (DOHDAC)'s Financial Report on the Australian Aged Care Sector 2023-24.
Earnings before interest, tax, depreciation and amortisation more than doubled from the previous year to $476.1 million for the year, or $4.88 EBITDA per care recipient per day (pcrpd), a 77% increase on the previous year.
Care management fees rose 19% over the year to $13.50 per care recipient per day (pcrpd), while care management expenses increased only 4% to $7.56 pcrpd.
In 2023-24, income from care management fees represented 17.7% of total income for the sector level - below the cap of 20% - but an increase from 16.8% in 2022-23. The cost to providers of delivering care management was only 10.5% of income (down from 11.1% in 2022-23).
"These results indicate that providers may be using margins on care management services to cross-subsidise losses in other services," the report states.
"The department will continue to monitor prices set by in-home aged care providers, to ensure they are reasonable and transparent."
Under Support at Home, participants will have 10% of their quarterly budget set aside for care management.
Bottom three quartiles saw greatest earnings improvement
While the top quartile of performers in terms of profitability performed "substantially better" than the rest of the home care sector, the sector-wide improvement in earnings for home care was driven by providers outside the top quartile.
The performance of providers in the top quartile remained stable between 2022-23 and 2023-24. The average EBITDA for providers in the top quartile was $15.19 per care recipient per day, consistent with $15.25 in 2022-23. However, providers in the next top quartile showed notable improvement, with even more significant gains observed in the next bottom and bottom quartiles.
As of 30 June 2024, Services Australia held $3.6 billion in Home Care Package unspent funds.
You can read the report in full here.
