2010 Aged Care Funding Survey
Health Headlines - June 2010
Deloitte has recently released the results of the 2010 Australian Aged Care Funding Survey.
This, the inaugural edition, highlights the challenges and opportunities that the current economic and regulatory environment presents for the aged care sector. While the report is an Australian publication it is still relevant to the New Zealand aged care sector.
The report surveyed members from national industry bodies and the Aged Care Association of Australia to ascertain their views on the topics currently affecting the industry. The hot topics included debt financing, supply capacity and Australia’s ageing population.
The survey profiled nearly 700 aged care facilities providers in both the for-profit and not-for-profit sectors. This represented almost 25% of the total number of facilities operating in the industry. The key highlights of the report include:
- Access to funding is the single greatest issue for all respondents at present and this is not likely to improve in the short term.
- Most respondents do not intend to make any further investment in their operations over the next five years.
- The ageing population is likely to result in facilities focussing more on catering for high care residents.
- Over half of the respondents regard their finance and IT departments as being less than effective.
With the New Zealand government reining in its spending, it is likely that the threshold for getting into aged care facilities will tighten. Only those needing the highest level of care will gain publically funded places in aged care facilities. As a result, these facilities will have to cope with a more complex patient mix. Although this is more costly, it is unlikely that government funding increases will be sufficient to cover the cost of this change.
To survive aged care providers need to take a good hard look at their cost structures. The first area providers should consider is making their back office functions more efficient. This can be done by evaluating how overhead costs can be reduced, and the viability of shared services and private-public partnerships.
Aged care providers need to promote the value they add inside the end-to-end continuum of care. For example, they can look to grow business by delivering step-down beds which take patients from relatively costly secondary hospitals. There is also merit in the aged care providers, who are currently in strong positions, consolidating with some of the weaker performing providers in order to secure greater economies of scale.
Please click here to view a full copy of the 2010 Australian Aged Care Funding Survey.