Healthcare provider Bupa has reported a 32% increase in profit to $537 million for 2022, but seen its residential aged care revenue flatline on the back of lower occupancy and higher workforce costs.
Bupa operates more than 50 aged care homes around Australia and supports more than 5,000 residents.
Bupa’s Australian aged care business experienced a drop in revenue and profits, due to lower occupancy and higher labour costs as well as the sale or closure of nine homes in 2021. Occupancy was 84% at the end of 2022, compared with 87% at the end of 2021.
Listed providers Regis and Estia Health have both estimated that a 1% increase in occupancy equates to around $7 to $8 million to their bottom line – so a 3% drop is significant.
Higher infection prevention and control costs also impacted the aged care business’s results.
Of the 22 aged care homes that received a one-star rating, Bupa operates four.
However, excluding COVID-19 support measures, overall revenue rose 3%, driven by improved margins in the insurance business, lower costs in Australian Health Services and a strong performance from the Hong Kong Health Services business.
Bupa’s Chief Executive Officer Hisham El-Ansary said, “A sector-wide workforce shortage remains the key challenge, with an estimated 35,000 vacant roles across the aged sector. These workforce pressures have an impact on occupancy, particularly in regionally based homes.
“We have put in place several workforce initiatives to mitigate these pressures including carer traineeships, our registered nurses graduate program and our overseas nurses’ program, which has recently taken in its first group of nurses.
“As the Government has recognised, addressing the significant workforce shortage today and making a career in aged care attractive for the next generation, requires a broad suite of reforms and Bupa welcomes the opportunity to contribute.”
Hisham will step down from his role at the end of this month.
