StewartBrown’s March quarter 2024-25 Aged Care Financial Performance Survey has highlighted the looming shortage of aged care beds over the next 10 to 15 years, reinforcing the urgent need for sustained capital investment to meet growing demand.
The sector must be "investable" to achieve this aim, meaning it must make adequate returns, StewartBrown emphasises.
The latest StewartBrown survey showed the average EBITDA achieved in residential aged care for the March 2024-25 quarter was $8,067 per bed.
The respected aged care accountancy firm is advocating for returns of between $20,000 to $22,000 per bed, or the equivalent of a 4% return on a $500,000 bed, for the sector to be investable.
The March quarter result is well short of this goal, with results likely to be eroded further as operators move to higher rates of compliance with care minute targets.
The losses remain highest for Everyday Living and Accommodation services.
While the margin on direct care increased to $18.46 per bed day (pbd) (up from $15.13 pbd in the March quarter 2023-24), the margins on Everyday Living ($6.60 pbd deficit, down from a $5.62 pbd deficit in the previous corresponding period (pcp)) and Accommodation ($10.95 pbd deficit, down from a $10.16 pbd deficit in the pcp) both declined.
The report also notes that the Hotelling Supplement "is still insufficient by at least $10 per bed day to meet the Taskforce recommendation that it should equate to the actual costs of providing everyday living services."
Average occupancy over the quarter increased to 94.2%, up from 92.6% in the pcp, reflecting the decline in the number of new beds being built in the last five years.
StewartBrown surveyed 1,192 aged care homes for its March quarter results, capturing 99,323 beds.
Read the report in full here.
