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Aged-care providers need extra funding

Posted on October 15, 2008, 5:05pm and updated on October 16, 2008 at 7:53 am

The release of the report on a national aged care survey show that many aged care providers are struggling.

According to the Grant Thornton 2008 Aged Care Survey, 40pc of aged care providers reported a loss in February 2007, while the average earnings for providers fell by another 105pc in the past year.

Aged and Community Services chief executive Alan Graham warned that unless “dramatic action” was taken, many operators were inevitably going to fail.

“It seems to me a sad indictment of the system when, as the survey suggests, providers can barely keep their existing premises running let alone think about what is required to meet future demand,” Mr Graham said.

Boandik Lodge aged care facility manager Gillian McGinty said a new funding system introduced in March has also not brought aged care facilities closer to a solution.

“We have already experienced a negative impact on our capital raising abilities due to the new funding instrument,” Ms McGinty said.

“Aged care facilities are reliant on accommodation bonds paid by residents to provide capital for new developments or upgrades.

“The new funding system can limit the number of people that are required to pay accommodation bonds, thus limiting our ability for capital raising.”

Ms McGinty said when more aged care places were made available, they were often not taken up by providers due to the difficulty in making a sustainable surplus.

The Grant Thornton Survey report highlighted that the community expected one bedroom accommodation while funding models failed to provide compensation for providers to meet the expectation.

The report suggested “significant investment” was needed to reshape the aged care sector for Australia’s ageing population.

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