Royal Commission costs for operators set to hit $100 million – Government the real winner

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Last Friday’s hearing marked 50 sitting days since the Royal Commission began its formal proceedings in January – and with the announcement of an extension, costs are expected to exceed $1 million.

Already Japara has spent $1.8 million, Estia $1.7 million and Regis $2 million to 30 June 2018 on the Commission on legal costs and staff to gather information on cases of substandard care for submissions – around $180,000 each per month.

Let’s say a provider has 5,000 beds and has spent $1.5 million – that’s $300 per bed. With 200,000 aged care beds across Australia, that’s $60 million.

Add in another six months to run and costs will be over $100 million – the same amount the Federal Government is supposedly spending on the Aged Care Royal Commission.

It could be argued this spending had some benefits – providers have been forced to identify red flags in their businesses and boards and CEOs are more aware of their responsibilities.

The real winner it seems is the Government – with occupancy down 2% thanks to negative media around the Commission, that is 3,600 beds the Government doesn’t need to fund.

At $250 a day, that’s a saving of $328.5 million a year.

So, the Government gets its wish for more people stay at home and providers have spent $100 million of their own money to improve their businesses.

We imagine the Government sees that as a good investment.

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The Weekly SOURCE is the leading media for retirement living and aged care businesses, delivering sector-specific news through four mastheads. Operating as part of The DCM Group, The Weekly SOURCE also provides a directory of proven sector specialists and an insights exchange.