The Australian government faces a growing dilemma with its Aged care policies that affects those looking for suitable aged care places.
Social analysis by McCrindle Research indicates the magnitude of the problem. Longer lives mean that, for example, the over-85 age group will expand from around 480,000 persons today to a staggering 1.7 million by 2044! This growth will generate a rapid increase in the demand for aged care places as the population ages.
At the same time whilst the government has expanded the total sum spent on aged care, it has been trying to reign in the rate of increase in expenditure. Successive Federal budgets have achieved this by limiting the funding available to providers per resident and by making it more difficult for people to access aged care or home care when they need it most.
To make matters worse the current residential aged care workforce has a relatively old median age of 48 years. Aged care also has and one of the lowest salary levels making it difficult to attract new staff, yet the increase in demand indicates that almost 78,000 additional workers will be required in the sector over the next decade on top of the replacements needed for those who will retire.
Recent research by accountants, StewartBrown, has revealed that 43 per cent of aged care facilities (usually the smaller and non-metropolitan operators) incurred financial losses in the period to March 31, 2018 with the number of providers recording losses increasing over time.
Such provider financial losses are likely to increase in future years as the Aged Care Funding Instrument that the government uses to compensate providers rose by only 1.4 per cent in July 2018 after being frozen for two years. Loss-making providers will either disappear or be swallowed up by more efficient large operators.
These data make it imperative that when you are looking for an aged care place for yourself or an ageing relative you keep an eye on what funding changes the federal government is planning and try to assess the ongoing sustainability of the facility you are considering.