Over 45% of aged care facilities in the red, latest StewartBrown reveals

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45.1% of facilities are now operating at a loss, according to the aged care accountants’ latest Aged Care Financial Performance Survey for the nine months to March 2019, up from 42.3% in December 2018 and 43.1% in March 2018.

You can download the report HERE.

The survey, which looked at data from 183 approved providers, 952 aged care facilities and 26,180 home care packages (HCPs), concludes the financial deterioration that started in the 2017 financial year is continuing.

Regional, rural and remote providers have also reached a “pivotal point”, the survey says – 67% of facilities are now running at a loss, an increase from 61% in the last quarter. 43% of these are recording a cash loss.

In total, StewartBrown found 19.75% of facilities recorded a negative EBITDAR – which the accountants blame on regulatory changes and funding pressures.

Results for home care are also down with providers’ EBT per client per day falling to $3.48 – 0.91 cents down from $4.39 in March 2018.

The report attributes this to the level of unspent funds which now average $6,788 per client – around $600 million.

StewartBrown’s Senior Partner Grant Corderoy warns that the Earnings Before Tax (EBT) for the nine months for residential care – which averaged $573 per bed per year or just $11.02 per week – is not enough for provider to build the cash reserves they need to expand and refurbish older facilities.

“We agree with what the peak bodies, providers and COTA are saying that the policy setting, and funding need to be addressed now rather than waiting for the results of the Royal Commission.”