Occupancy crashes to a “catastrophic” 87.5%: Operation of the Aged Care Act report

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Another challenging finding from the 2019-20 Report on the Operation of the Aged Care Act 1997.

Check out the graph above.

The report lists the annual residential care occupancy for the 12 months as 88.3%.

However, James Underwood (pictured right) has pulled out data which reveals that occupancy has fallen from 89.4% on 30 June 2019 to 87.5% as of 30 June 2020 – a situation he labels “catastrophic”.

The Government data is not as granular as StewartBrown’s financial performance surveys – which measure the total number of available beds – while the Government figures are based on the number of approved places.

Most of these 27,161 empty beds are in shared rooms – with two, three or four beds – in older-style facilities that can’t compete against the new breed of single rooms with private ensuites that families now want for Mum or Dad.

These operators must be in a world of financial pain with no real solution.

But James says the reality is that there is not even enough demand for single rooms – and occupancy would need to rise considerably to fill up those larger rooms.

Big growth in home care impacting occupancy levels

As we covered here two weeks ago, 2020 saw the smallest increase in aged care beds since 2016 – just 3,748 – which should have a positive effect on occupancy levels, but hasn’t.

While COVID has impacted on occupancy, James surmises that it is the huge growth in Home Care Packages (HCPs) – which have grown by 35,729 places to 142,436 operational places at 30 Jun 2020 – that has been the real spanner in the works.

“Of these 35,729 places, some 16,719 were Level 3 or 4 places, i.e. “high care” home care,” he noted.

James suggests aged care providers should be focusing their efforts on sales – traditionally the domain of retirement living.

How many providers are prepared to invest in their sales teams however? And will they be fighting a losing battle trying to persuade the next generation to enter residential care – see the next story.