Aged Care Australia at Significant Financial Risk in 2020

In the last edition 44 of The Village News, I reported, “As 2019 came to a close, alarm bells were ringing loudly that 54% of all residential aged care facilities are operating at a financial loss”. I added, “Industry analysis of Department of Health data indicates that almost 200 Operators caring for up to 50,000 older Australians are operating at a high level of financial risk. Some RACFs will close in 2020!”. Well, it’s happening. It’s now!

In a matter of only a few months, that 54% is now 56% of residential aged care facilities operating at a financial loss and it’s only going to rise unless and until the Federal Government pays up and fronts up to its responsibilities on behalf of Australia’s taxpayers.

How can politicians be so removed from the inevitability of ageing? How can politicians be so dismissive of their parents and grandparents? Why is it that politicians are so disrespectful to older Australians, this is shameful!

And why is it that we who are young or younger care less that we don’t and won’t take the time to phone, email, write, visit our politicians and tell them what’s important, what needs changing, to remind them that our vulnerable and increasingly frail elders need a little more?

Why is it that politicians are so disrespectful to older Australians, this is shameful!’

We are soft, we are apathetic and if we are honest with ourselves, many of us just don’t care! Lest We Forget!

Lest We Forget! Well it is abundantly clear, we do forget. Until it is ANZAC Day in April or Armistice Day in November and we can all feel good about how patriotic we all are on these two days. And we can go to the footy and stand for a minute and we might wear a poppy. What a fraud! Our elders have the other 363 or 364 days to be seen and not hidden away, to be honoured, to be respected, to be cared for, to be listened to, to be part of the community, to be funded correctly!

The Facts

I can report from figures helpfully provided to me by Leading Age Services Australia Ltd. (LASA), that as at the end of 2019 in Australia, there were:

  • 886 Operators/Providers of RACFs;
  • 2,695 RACFs;
  • 241,723 residents living in RACFs;
  • 235,764 staff employed in RACFs;
  • 116,843 older Australians receiving Home Care Packages; and
  • 130,263 staff working in Home Care and Home Support.

In relation to funding, the Federal Government funded:

  • the RACF Industry with $12.2 billion; and
  • The Home Support and Home Care Industry with $4.4 billion.

aged care australia financial risk 2020Ciarán 

LASA and so many of my colleagues and I are acutely aware of the financial distress that its Members and that Operators/Providers are experiencing. The figures quoted above are very large sums of money but then look again at the numbers of people receiving services and employment. And that’s only the tip of the iceberg when it comes to costs.

A typical day in a RACF involves care staff and registered nurses, catering chefs and catering assistants, recreational activities staff, housekeeping/ cleaning, laundry and maintenance staff, physiotherapists, podiatrists, administration and accounts staff,  managers.

It involves a range of tradespersons to maintain and repair accommodation and buildings, plumbers, carpenters, electricians, painters, fire safety contractors, gardeners, all who are paid by Operators/Providers. If we renovate or build, add every discipline with a qualification to the payroll.

I am embarrassed to even have to write it. Is an older Australian worth an extra $10 per day? Politicians, bow your head in shame!’

And then we have every type and shape of auditor and audit/regulatory processes professionally and financially and from a certification perspective. From Council, State, Federal, the Aged Care Commission for Quality and Safety, yes, we even pay them large sums of money to inspect us to give permission allowing us to operate.

Operators/Providers take all the financial responsibility and risks to build and renovate our RACFs, to take out bank loans and to repay them, no support there from the Government who have clearly demonstrated also that they do not want to be anywhere near operating a RACF and that’s why only 5% or less of RACFs are operated by the Federal Department of Health.

And our staff in our RACFs are paid on Award Rates, above Award Rates and with penalty loadings which include 50% penalty rates above their basic hourly rate on a Saturday, 75% on a Sunday and 250% on a Public Holiday. And we have staffing available 24 hours a day, 365 days a year.

Add the medical and allied health professionals coming in from outside, audiologists, optometrists, dentists, denture technicians, pharmacists, pathologists, general practitioners, psycho-geriatricians. The hairdresser and the beautician too. All generating costs, all providing services.

All of these people with one focus, our residents.

It is estimated that Governments have removed and/ or reduced its funding obligations to our aged care industries by approximately $5 billion over the past 5 years. LASA is proposing a $670 million contribution a year to RACF funding that is needed. It might just be enough to keep some of those 56% of Operators/ Providers who are in financial distress and making a loss. Can you imagine 56% of our supermarkets or the banks or the retail industry making a financial loss. Our economy would collapse.

To put it quite simply, a $670 million injection a year, that’s roughly an extra $10 per resident per day. I am embarrassed to even have to write it. Is an older Australian worth an extra $10 per day? Politicians, bow your head in shame!

What you can do

Please contact your Federal MP: As a supportive colleague of our Company, I ask each of you to consider contacting your local Federal Member of Parliament and to highlight to them the dire need for the correct funding of Australia’s Aged Care Industry, its Residential Aged Care Facilities and Home Care Services. Feel free to forward to them this addition Issue 45 of The Village News to assist your email message. And if you do, it would be great to hear from you that you have done so with the email address of your local Federal MP. We can include them in future editions of The Village News and keep ‘Aged Care’ on their agenda in Parliament;

Ciarán Foley
Chief Executive Officer