The slow attrition of providers from the residential care sector is evident in the latest Operation of the Aged Care Act report.

Last week, we discussed the report’s record low of 86.8% occupancy and its implications.

The findings also suggest that the consolidation of the sector is continuing its steady march, with the number of operators falling from 845 to 830 operators over the past year.

This reflects a continuing trend – the number of residential care operators in Australia has gradually declined by 12.5% in the past five years:

• 30 June 2019 – 873
• 30 June 2018 – 886
• 30 June 2017 – 902
• 30 June 2016 – 949

But is this process of consolidation about to speed up?

As discussed in the Viability issue of SATURDAY, building scale – through investment in workforce, IT, marketing and customer experience – will become increasingly important over the next few years as the Government’s Royal Commission reforms roll out.

Operators that cannot develop scale will need to partner with other providers to maintain viability, or seek additional Government assistance for those in rural and remote areas.

The Government has also made it clear that it won’t keep providers afloat as it has done in the past.

In contrast, the number of home care operators is still ticking up slowly – from 920 on 30 June 2020 to 939 as of 30 June 2021, a 2.1% increase.

But this number may also be on the way down.

In the Viability issue, there was also a warning from home care operators on the costs of implementing the new payments in arrears – around $100 million and counting in staff hours to educate consumers on the changes.

Will we start to see more home care operators also opting out of the system?

Read the full story in the Viability issue of SATURDAY. Subscribe here to read in full.