Key Points:
Aged Care Taskforce: In June 2023, the Australian Government established the Aged Care Taskforce to advise on fair and equitable funding arrangements. This initiative aims to ensure that the aged care system remains responsive to the evolving demographics, needs, and circumstances of older Australians.
AN-ACC Price Increase: Starting from July 1, 2023, the Australian National Aged Care Classification (AN-ACC) price for residential care delivery increased from $216.80 to $243.10 per resident daily. This adjustment, recommended by the Independent Health and Aged Care Pricing Authority (IHACPA), reflects a commitment to fair compensation for care providers.
Home Care Package Reforms: From January 1, 2023, reforms capped care management prices at 20% of the package level and package management prices at 15% of the package level. These changes aim to reduce excessive administration and management charges, ensuring more funds directly benefit care recipients.
Workforce Pay Increase: From July 1, 2023, the Australian Government allocated $11.3 billion to fulfil the Fair Work Commission's interim decision, delivering a 15% pay increase to build and sustain a valued aged care workforce.
Australia's aged care landscape is undergoing a revolutionary transformation spearheaded by the government's commitment to structural changes, financial sustainability, and heightened transparency. The second quarter QFS for the 2022-23 financial year and the 2023-24 Budget shed light on the ongoing initiatives driving this metamorphosis. HCPA provides in-depth guidance on regulatory compliance, helping providers understand and adhere to the complex regulatory landscape to ensure high-quality care and compliance with industry standards. This blog post delves into the key reforms, recent policy implementations, and the financial panorama of aged care in Australia.
Aged Care Taskforce
One of the cornerstones of this reform initiative is the establishment of the Aged Care Taskforce in June 2023. Designed to provide targeted advice on funding arrangements, the task force ensures an equitable aged care system for all Australians. With a keen focus on fairness, innovation, and adaptability to changing demographics, the task force aims to shape the future trajectory of aged care.
AN-ACC Price Increase and Home Care Package Reforms
Commencing on July 1, 2023, the Australian National Aged Care Classification (AN-ACC) witnessed a price increase from $216.80 to $243.10 per resident per day for residential care delivery. Aligned with recommendations from the Independent Health and Aged Care Pricing Authority (IHACPA), this adjustment aims to accurately reflect the costs associated with delivering high-quality aged care. Simultaneously, home care package management reforms have been implemented to cap care management prices at 20% and package management prices at 15%, ensuring more funds directly benefit care recipients. HCPA assists in developing and implementing policies and procedures tailored to providers, ensuring that you meet the required standards and provide optimal care.
Aged Care Workforce Pay Increase
Recognising the pivotal role of the aged care workforce, the Australian government committed $11.3 billion for a 15% pay increase, in alignment with the Fair Work Commission's interim decision. Launched on July 1, 2023, this funding infusion seeks to build and sustain a valued aged care workforce, acknowledging their critical role in ensuring quality care for older Australians.
Financial Landscape and Provider Performance
For residential aged care providers, the QFS for January to March 2023 reveals a positive trajectory in financial performance. Earnings before interest, tax, depreciation, and amortisation (EBITDA) per resident per day experienced a notable improvement of $6.09, reaching $19.02. This quarter, they also decreased the total net loss before tax, halving from $27.90 in September 2022 to $13.48 per daily resident.
Occupancy rates for residential care providers saw a slight increase to 86.0%, with an average care minutes target of 200 per bed per day expected by October 2023.
Home care providers continued their profitability, with a year-to-date EBITDA per recipient per day of $4.17. Approximately 74.5% of home care providers reported a net profit before tax, underlining sustainability.
COVID-19 Impact and Government Support
Acknowledging the ongoing challenges posed by COVID-19, the QFS recognises the increased operational costs, particularly in managing cases and outbreaks. The government's proactive approach is evident in approving approximately $142 million in reimbursements to providers for the COVID-19 Aged Care Support Program Extension from January to March 2023.
Australia's aged care sector is at the forefront of a transformative journey marked by financial resilience, workforce support, and responsive policy changes. As the government continues to roll out targeted initiatives, the aim is to create a sustainable and inclusive aged care system that meets the evolving needs of older Australians. The ongoing commitment to transparency and adaptability ensures that the future of aged care in Australia is not just sustainable but thriving.
HCPA is an all-in-one solution for Aged Care providers, supporting them with registration, growth and consulting. Contact us here or call 03 9084 7472 to learn how we can help you succeed.
SOURCES | Australian Government Department of Health and Aged Care ‘Quarterly financial snapshot of the aged care sector – Quarter 3 2022-23 – January to March 2023’ |