“It’s not about gold-plated luxury”: CHA on fixing aged care accommodation

Catholic Health Australia (CHA), the peak body for Catholic healthcare providers, has urged the Government to shift residential aged care from a “rationed model” to a “demand-driven system”.

CHA said the Government’s Residential Aged Care Accommodation Pricing Review must consider funding in this broader context of access and supply.

Closing the accommodation gap

CHA is on the frontline of aged care bed shortages. Around half its residents are in Government-supported places, many in thin markets where there are no other operators.

In its submission, CHA warns the current accommodation supplement gap – now around $90 per day between supported and non-supported residents – is eroding financial sustainability and limiting investment in new builds and refurbishments.

Over the past two years, financial institutions have taken a “more cautious” approach to aged care lending, further constraining new developments.

CHA’s 19 recommendations to the Review include:

• establishing a floor for the Maximum Permissible Interest Rate (MPIR) to make it more predictable
• increasing the Accommodation Supplement by at least half the current funding gap (around $45 per supported resident per day) as an interim uplift for Not For Profits with a high proportion of supported residents
• conducting regular benchmarking of accommodation costs so supplements reflect real build and refurbishment costs
• developing an accommodation quality and pricing framework that links published room prices to defined accommodation standards

Not gold-plated – just fit for purpose

In an opinion piece accompanying the submission, CHA Director of Aged and Community Care Alex Lynch said the goal is to give lenders and aged care operators the confidence to “renew ageing buildings and expand supply” – particularly for supported residents in regional, rural and remote areas.

It is not, Alex stresses, a bid for luxury.

“There is not – and should not be – a push to make every aged care facility a gold-plated, luxury offering. The core issue is ensuring that all older Australians have access to safe, modern, age-appropriate accommodation,” he writes. “This is not achievable with the current policy settings.”

CHA is Australia’s largest non-government grouping of health, community and aged care services. In aged care, it represents 12% of all aged care facilities and 20% of home care services.

You can read Alex Lynch’s opinion piece in full here.

You can read CHA’s submission here.