UK aged care homes with ‘outstanding’ star ratings charge more – will we see the same here?

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In 12 months’ time, all aged care homes in Australia will receive a star rating as part of the Government’s Royal Commission reforms – and the UK experience suggests it could have a major impact on occupancy and what providers are able to charge.

Savills’ Spotlight: UK Care Home research showed that the occupancy rate of care homes classed as ‘outstanding’ by the UK regulator, the Care Quality Commission (CQC), averaged 81% throughout 2020, compared to 74% for those rated ‘good’.

‘Outstanding’ homes also charged 22% more on average than those classed as ‘good’.

Craig Woollam, Head of Healthcare at Savills, said the quality of accommodation and operators had never been more important to residents than during the COVID-19 pandemic and this was evident in the relationship between star ratings and occupancy rates.

“It is also clear that the classification of a care home has a significant impact on the rate that it charges with a clear premium being paid for those homes that fall into the ‘outstanding’ category,” he said.

The UK has seen its aged care occupancy fall from 88% to 90% in the first quarter of 2020 Q1, to between 78% and 82% for the subsequent four quarters – levels are only now starting to recover.

Star ratings are also playing a role in aged care closures – Savills notes that 46% of the beds that closed during this time were rated as either “requiring improvement” or “inadequate” by the CQC.