Last week we covered aged care specialist accounting firm StewartBrown’s Senate submission analysing the declining viability of residential aged care.
This week we look at their views on the declining viability of delivering home care.
For the nine months ended March 2018, across 21,700 home care packages (412 home care programs), the average earnings before tax per client day (pcd) was just $4.39, a drop of $0.99 pcd.
“The decline indicates the sector is still managing the flow on deregulation consumer directed care model as well as adjusting to operating in a far more competitive landscape”.
“Since June 2016 the number of approved providers and home care has increased nationally by 307 (61.5% increase), however, the number of funding packages has only increased by 2.77%”.
“Many new providers have a low-cost model which promise more than they can deliver, resulting in pricing pressures”.
Average revenue declined 5.03% underpinning an overall reduction in profitability of 39.7%.
What is clear is that home care operators will have to urgently reshape their service bundles to deliver higher margins and increase marketing to hold existing clients and take new, profitable clients from other providers. And fast.
If you wish to read more detail contact Gordon Corderoy, Senior Partner at StewartBrown, at info@stewartbrown.com.au for a copy of their comprehensive Home Care Report – March 2018.
