Call For Emergency Funding For Residential Care Providers

News of planned closures of aged care homes evidences the fact that sector reform is too costly for smaller and regional aged care operators.

Call For Emergency Funding For Residential Care Providers
© Danielle Robertson Consulting Pty Ltd t/as DR Care Solutions

Within a year, Wesley Mission has exited residential aged care after 95 years of providing residential aged care services^[1]. This is a sad indictment of the times.

Wesley Mission has always been a small operator, at its peak operating four residential aged care facilities in the Sydney region. The first closure occurred in June 2022 and the aim is to close the remaining three by May 2023. In total, 283 residential aged care beds will be lost.

This is just one example of smaller not-for-profit operators leaving the residential aged care sector. There are plenty of others who have closed or are planning to close.

Research released in January 2023^[2] by the accounting firm, Stewart Brown, found that of the 1,138 residential aged care homes (92,312 beds) surveyed annually, 63% operated at a loss. The figure grew from 60% operating at a loss as at December 2021.

The firm expects 30 to 50 closures in the next 18 months. With the average home providing 70 beds, this will see the loss of 2,100 to 3,500 beds.

Why are they closing? Put simply, their financial position is unsustainable.

Why are they financially unsustainable? The 2019 Royal Commission into Aged Care Quality and Safety reforms adopted by the Commonwealth Government are proving to be too costly for smaller and regional operators to implement. Compliance issues, workforce issues and the pressures constantly on governance to run these homes are just a few of the issues.

No aged care workforce

The major issue is finding the aged care nurses and workers needed to provide the level of quality, safe care expected in residential aged care homes.

As of 1 July 2023, residential aged care homes must have a registered nurse onsite 24/7.
From 1 October 2023, residential aged care homes must provide 200 care minutes per day per resident, of which 40 minutes must be provided by nurses.^[3]

These are admirable reforms but when you come to understand that we currently do not have the nursing and carer workforce to provide these hours of care, the timetable for their implementation is unrealistic. A point I have been raising for some time.

Australian College of Nursing Chief Executive, Kylie Ward, sees the 1 July deadline as impossible. She warns that “we can’t staff the Australian nursing workforce today, tonight or tomorrow” and cites that “Australia is currently in need of 12,000 registered nurses”.^[4]

In the meantime, residential age care providers are managing current staffing shortages using agency staff and overtime for existing staff. It is unsustainable. Agency staff represent a cost of $15.33 per bed day, an increase of $8.81 per bed day compared to the same period in 2021^[2].

Of course, it’s more lucrative to be an agency registered nurse than a full-time employee. There again, employed nurses and carers will finally be rewarded a 15% wage increase from 30 June 2023^[5]. Hopefully these wage levels will attract more workers to the sector.

Imagine what the wage cost figures will look like when the mandatory registered nurse and carer hours apply from 1 July and 1 October 2023. The sector will need emergency funding from the Commonwealth Government to avoid closures.

Needing help caring for elderly loved ones? Please feel free to call me, Danielle Robertson, at any time for an initial discussion on how to set up the right care, support and assistance at the right time and in the right place.