"Providers not meeting their care minute targets are likely to report higher care profits", the Department of Health, Disability and Ageing states in its 120-page Financial Report on the Aged Care Sector 2023-24.
The average Not For Profit residential aged care provider that met their total care minutes targets in every quarter in 2023-24 reported a care profit of $6.80 per resident per day (prpd) for the year.
By comparison, the average Not For Profit service that did not meet all their quarterly total care minutes targets in 2023-24 reported a care profit of $34.83 prpd - a "significantly higher" result, according to the report.
The more often the providers failed to achieve their quarterly care minute targets, the higher their profits, the report showed, as demonstrated in the main chart above. Those who never met the targets reported the highest care profits.
The same trend applied for For Profit residential aged care providers. When they met their total care minutes targets in every quarter, they reported a $20.23 care profit prpd. When they did not meet all their quarterly care minutes they reported a $46.72 care profit prpd.
"This result indicates that some providers not meeting their care minutes are either using care profits to cross-subsidise losses in accommodation and hotelling, and/or to boost profits," the report states.
After reporting net losses between 2018-19 to 2022-23 years, the residential aged care sector returned to profitability in 2023-24. Earnings before interest, tax, depreciation and amortisation increased by $28.04 per resident per day to $35.61.
The latest data from the Department of Health, Disability and Ageing shows only 49% of aged care homes met both their total and RN care minute targets.
Capital expenditure growing
Also noteworthy in the Financial Report on the Aged Care Sector was data showing spending on capital works was $4.2 billion, up 16.7% from $3.6 billion in 2022-23.
And building approvals increased for the first time since reporting began in 2020-21, from 224 in 2022-23 to 232 approvals in 2023-24.
10,000 more beds needed every year
The report also shows Government predictions for future aged care demand.
By 2044, in 20 years' time, the average increase in residential aged care care demand is forecast to be approximately 10,600 residents per year, to approximately 410,000 people in residential aged care by 2044.
You can read the report in full here.
