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Business Strategy Webinar- Residential Care
9 February 2021 @ 12:00 pm - 1:00 pm
|Title||Business Strategy Webinar- Residential Care|
|Date||Tuesday 9 February 2021|
|Time||12:00pm -1:00pm AEDT|
|Location||Join from your phone, tablet or computer|
|Registration||LASA Member: FREE|
Non Member: $220 Inc GST
|Register||Click here to register|
Cam Ansell, Managing Director, Ansell Strategic
Grant Corderoy, Senior Partner, StewartBrown
Belinda Hegarty, National Head of Healthcare, Commonwealth Bank
Facilitated by Tim Hicks, General Manager Policy and Advocacy Leading Age Services Australia
Pressure on residential care operators has increased dramatically in recent years. Almost half of all providers are now reporting operating losses, and even top performing providers have experienced falling returns – driven by inadequate care funding, indexation pauses, dramatic slowing of increases in ACFI classification levels, slowing of pension indexation linked to the basic daily fee, falling interest rates reducing returns on accommodation and declining average occupancy. Negative media attention has damaged the reputation of the industry. Regulatory pressure has also increased with 40% of site audits now identifying non-compliance, and various regulatory changes adding to overheads. This has all been amplified in the last 12 months by COVID. Unsurprisingly overall investment and growth in the number of new residential care places has also greatly slowed.
The next few years should bring some relief on the gap between cost and revenue, with likely Royal Commission recommendations and acknowledgement from Government regarding these problems. Future indexation is likely to be more closely linked to cost changes, and short-term bridging funding to address the current inadequacy of funding for hotel services IS DESIRED. The proposed new care funding instrument – the AN-ACC – should align funding more closely to cost, with rural and remote providers likely to particularly benefit. However, the potential redistribution of the funding pool raises its own business risks. There are also likely to be significant implementation issues regarding the timeliness and consistency of external assessment.
Significant uncertainty remains about the extent to which government will fund additional care hours for residential care, or additional wages for staff, and whether this funding will be tied to input controls.Whatever happens, more disclosure of staffing and quality indicators seems likely. There may also be other regulatory changes, which will place greater pressure on small organisations with less capacity to manage the associated overheads.
Occupancy also seems likely to remain under pressure, despite rapid growth in the age range most likely to use residential care. This is partly due to reputational damage from COVID-19 and the Royal Commission, and partly due to likely further policy changes to support the wishes of older people to remain at home (e.g. more home care packages and packages at a much higher level). Current controls on residential care places through the ACAR also seem likely to be removed in the next couple of years.
In addition to all this, workforce remains an underlying challenge with likely increased regulation and expectations for qualifications, alongside the need to recruit many new staff in both home care and residential care. Despite these challenges, more appropriate funding mechanisms and underlying demographics suggest that there should be a strong future for residential care providers able to successfully navigate the initial structural changes.
Join us as we examine some of the challenges but more importantly the opportunities that may arise out of the Royal Commission and the reform process for residential care.