The StewartBrown FY19 Aged Care Financial Performance Survey incorporates detailed financial and supporting data from over 1,102 aged care homes and over 34,999 home care packages across Australia. The quarterly survey is the largest benchmark in the aged care sector and provides invaluable insight into the trends and drivers of financial performance at the sector level and at the aged care home or programme level.

The listed aged care providers Estia, Regis and Japara have recently released their full year results to 30 June 2019. StewartBrown has reviewed the Listed Providers Financial Reports and Investor Presentations and a summary of this analysis can be found in the attached report. This listed aged care providers financial performance update focuses solely on the three listed providers in order to provide a timely snapshot and commentary on their results. The results and analysis for those providers in the StewartBrown Aged Care Financial Performance Survey will be made available during October. To view the whole report click here.

Survey Report out now CorporateAdminSurvey StewartBrown’s Corporate Administration Costs in the Aged Care Sector Survey finds: Corporate administration costs continue to increase at a rate greater than the increase in revenue There has been a particular increase in corporate administration staff costs Organisations are on average spending 16.87% of their operating revenues on administration Read the whole report. The report has a lot of detailed analysis of administration costs in the aged care sector, and studies the different business characteristics that effect these costs in isolation. In particular we look at: locations net assets revenue type employee productivity system use Royal Commission-related spending We must especially thank all those who took part with their data and insights this winter. So much was happening in the sector at the same time: the Royal Commission, the July reforms, and the reporting period for many organisations. We had a response from aged care providers covering 492 residential care facilities with 39,085 operational places, 18,857 home care clients and 22,207 occupied independent living units.

More speakers have joined our programme at the StewartBrown 2019 Aged Care Finance Forums: Professor Mike Woods of the University of Technology, Sydney; Rachel Lane, author and aged care consultant head of Aged Care Gurus; Mike Callaghan, Chair of the Aged Care Financing Authority; and Fiona Somerville, Director of The Ideal Consultancy, will be joining us and presenting their perspectives on the Aged Care sector. Leaving no capital city out, StewartBrown is holding a forum in each of Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart and Launceston. Speakers will vary slightly from venue to venue, so we will be updating booked attendees by email - and in this space - with complete lists of speakers in each city.

Our roadshow is taking an all-day forum around Australia, starting 15 October in Sydney then all the state capitals, and finishing in Launceston on 13 November. Share Knowledge and Insights From Across the Whole Sector The Aged Care Finance Forum is designed to inform the aged care sector. It explores the policy, operational and financial changes in the sector in 2019 and beyond, helping operators survive and prosper in an uncertain but exciting environment. The Forum is the opportunity for aged care providers and finance and operational staff across the sector to discuss challenges and share knowledge and insights. Guide to the 2019 financial changes and beyond Financial models in aged care are changing, with a much stronger emphasis on individualised funding in both the home care and the residential care segments. In home care, the model has changed from 1 July 2019 to accommodate the pricing transparency regime, and there are potential changes in the subsidy arrangements. The ACAR Impact Analysis has implications for residential care, and the forum includes a thorough update. Guest presenters from DOH, ACFA, COTA and more This is the sector’s opportunity for an in-depth analysis of these changes, setting out the practical solutions for your business. Additional presenters will include representatives from the Department of Health, ACFA, COTA, and operational experts on legal aspects, residential and home care, and quality standards. Practical business solutions – best-value seminar in 2019 Conducted by professionals who work closely with all stakeholders in the sector, the Aged Care Finance Forum is perhaps the most beneficial seminar you could attend this year. All attendees will receive their own USB containing all the presentations and other useful resources. The full agenda will be available soon. Sydney: Tuesday 15 October at Cliftons, Level 13, 60 Margaret Street, Sydney Melbourne: Wednesday 16 October at Cliftons, Level 1, 440 Collins Street, Melbourne Brisbane: Thursday 17 October at Cliftons, Level 3, 288 Edward Street, Brisbane Perth: Tuesday 22 October at Cliftons, Ground Floor, Parmelia House, 191 Street, Georges Terrace, Perth Adelaide: Wednesday 23 October at Stamford Plaza, 150 North Terrace, Adelaide Hobart: Tuesday 12 November at the Salamanca Inn, 10 Gladstone Street, Hobart Launceston: Wednesday 13 November at The Sebel, 12-14 St John Street, Launceston If you are unable to attend in any of these cities please e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. to register an interest in a webinar. We will then also accommodate you if possible at one of our regional live events. Registration opens at 8.00 am, for an 8.30 am start. Full-day registration includes morning tea, lunch and afternoon tea. Tea and coffee are available throughout. Grant speaking Pricing - StewartBrown survey participants The full-day registration is $500.00 - all prices exclude GST and fees. Survey participants are entitled to a price reduction. Check your email for the discount code too. Pricing - Non survey participants The full-day registration is $700.00 - all prices exclude GST and fees. Everyone is welcome, but seats are limited so register early.

This Sector Report is for the period ending March 2019 of the largest benchmark survey of Australia’s aged care sector – the StewartBrown Aged Care Financial Performance Survey. This quarterly survey takes in financial and supporting data from over 1,011 residential care homes, and over 26,386 home care packages (498 home care programs) nationally. The survey offers insights into the trends and drivers of financial performance at the sector level and at the individual residential and home care levels. Click here to download the ACFPS Sector Financial Performance Report for March 2019.

The StewartBrown December 2018 Aged Care Financial Performance Survey incorporates detailed financial and supporting data from over 965 residential care facilities and over 27,164 home care packages (503 home care programs) across Australia. The quarterly survey is the largest benchmark within the aged care sector and provides invaluable insight into the trends and drivers of financial performance at the sector level and at the facility or program level. Click here to download the ACFPS Sector Financial Performance Report for December 2018.

In February 2019, The Australian Department of Health (the Department) released the discussion paper “Managing Prudential Risk in Residential Aged Care” in consultation with the residential aged care sector and the broader community on the issue of managing prudential risk in residential aged care. The existing framework in place under the Aged Care Act 1997 (the Act) supports this objective, however two recent reviews have recommended that the prudential framework be strengthened (Ernst and Young and the Tune Review). The Department has invited submissions from all interested stakeholders to gather the sector’s views on the options for better managing prudential risk in residential aged care. Please see below for the StewartBrown submission on managing prudential risk in residential aged care. Click here to download the submission.

The listed aged care providers Estia, Regis and Japara have recently released their six months results to 31 December 2018. StewartBrown has reviewed the Listed Providers Financial Reports and a summary of this analysis can be found in this report. This listed aged care providers financial performance update focuses solely on the three listed providers in order to provide a timely snapshot and commentary on their results. Click here to download the report.

Click here to download a PDF version of the report below.

On 17 December 2018 the Government provided its Mid-Year Economic and Fiscal Outlook update for the 2018/19 year. In making the announcement it also included several measures that impacts directly on the aged care sector. Government Announcements in detail The Government will provide $454.9 million over four years from 2018 19 to support older Australians with improvements to residential and home care arrangements, including: $287.3 million over three years from 2018 19 for 5,000 level 3 and 5,000 level 4 home care packages; $56.4 million over four years from 2018 19 to assist people in home care by reducing the maximum basic daily fee that service providers can charge; and $111.2 million over four years from 2018 19 to increase the residential care viability and homeless supplements by 30 per cent to support people in residential aged care in regional, rural and remote areas of Australia and those at risk of homelessness. In addition, the Government will provide $81.7 million over four years from 2018 19 to support older Australians through better quality of services, improved regulatory arrangements for aged care service providers, and new workforce arrangements for people employed in aged care, including: $39.3 million over four years from 2018 19 to create an additional 300 Transition Care Places in Western Australia by 2020 21, to support up to 1,300 older people each year to return to their homes after a hospital stay; $30.5 million in 2018 19 to introduce an accommodation management payment in the Continuity of Support program; $15.6 million over four years from 2018 19 to the Department of Health, the Australian Aged Care Quality Agency and the Aged Care Quality and Safety Commission to improve regulatory arrangements and the quality of aged care services for people receiving Commonwealth funded home care and residential aged care, including expanded audit and compliance processes; $4.0 million in capital funding in 2018 19 to contribute to the expansion of facilities at Clare Holland House in Canberra to improve the provision of palliative care services; $3.9 million over three years from 2018 19 to contribute to the expansion of the Strathalbyn Aged Care Facility to increase aged care services by an additional 12 beds; and $0.6 million in 2018 19 to support implementation with aged care providers of workforce improvements recommended in the Aged Care Workforce Taskforce report, A matter of care — Australia’s aged care workforce strategy. The cost of this measure will be partially met from within the existing resources of the Department of Health. Other health measures with an impact on residential aged care facilities included: Provision of $98.0 million over four years from 2018 19 to increase the Medicare Benefits Schedule (MBS) fees for General Practitioners (GPs) attending a residential aged care facility to help ensure that GPs have appropriate incentives to provide care in aged care facilities; The following is an extract from the foreword to the MYEFO papers: The Government is continuing to invest in aged care, with total spending expected to reach a record $23.5 billion in 2021-22. This includes supporting older Australians to access quality aged care services and improving regulatory settings in the sector. An additional $287.3 million has been provided to bring forward by one year to 2018-19 the release of 5,000 level 3 and 5,000 level 4 home care packages to connect more older Australians with high-level home care support. The Government is also providing $56.4 million to assist people in home care by reducing the maximum basic daily fee service providers can charge. In addition, the Government will provide $111.2 million to increase the residential aged care viability and homeless supplements by 30 per cent to support people in residential aged care in regional, rural and remote areas of Australia and those at risk of homelessness. The Government has established a Royal Commission into Aged Care Quality and Safety to examine the quality and safety of care provided to senior Australians in residential and home-based aged care and to young Australians with disabilities living in aged care. The Government will provide $104.3 million over four years from 2018-19 for the Royal Commission and $17.2 million over two years from 2018-19 to the Department of Health, the Australian Aged Care Quality Agency and the Australian Aged Care Quality and Safety Commission to support activities associated with the Royal Commission. Commentary and Economic Context of the Announcements The various measures announced yesterday, while welcomed, are unlikely to improve the financial situation that many aged care providers currently find themselves in. The latest StewartBrown Financial Performance Survey for the September 2018 quarter shows that many aged care providers are continuing to struggle financially. Residential Care While there have been modest traditional seasonal uplifts in the results of residential aged care providers, the September 2018 results are still well below those for the same period in the previous financial year. Except for the increase in the viability supplement there was no increase in funding for the residential aged care facilities in the announcements today. Facility Result at September As part of our analysis of the June 2018 survey results and the settings that we were observing for the current 2019 financial year, we forecast what we believed would be the average results for residential aged care facilities and the results are shown in the graph below. While the increase in the viability supplement should improve the results of a relatively small number of providers, we do not see these forecasts changing significantly as a result of measures announced yesterday. Forecast Facility Result For those facilities that do qualify for a viability supplement, they will see them increase by 30% as a result of announcements made yesterday. This will be welcomed and as shown in the graph below is desperately needed by those facilities operating in rural and remote areas. Facilities with negitive facility EBT by remoteness Home Care With respect to home care providers, the announcements of additional packages will be welcomed. The increase in the number of high care packages should improve the financial performance of providers who will provide the services to these packages as margins are generally higher for high care packages. This measure should also help to alleviate the waiting lists for high care packages in the community. The September Survey has seen a general decline in financial returns for providers compared to the same quarter in 2017. Home Care EBT per client per day The announcements of an additional 10,000 high care packages from Calendar year 2019 is aimed at addressing the increasing waiting lists for those packages as shown in the graph below. Number-of-persons-on-home-care-package-waiting-list.png The measure to reduce the fee for low care packages (topped-up to the provider by the government) is interesting. We are yet to see the detail of how this measure is to be applied but it may have been better if it was accompanied by an announcement that the daily fee, even at the reduced level, was a compulsory charge, in the same way that it is in residential care and as recommended in the Tune recommendations. At present there is very little consistency in how providers are charging clients, if at all and this is affecting the viability of providers and, in some cases, their ability to compete against those that do not charge this fee at all. It may also make it more difficult for providers to charge the higher fee when they transition someone from a low care package to a high care package. We do not know, based on the information released, whether this will affect clients that have been assessed for a high care package but are currently allocated a low care package. On the positive side, this measure might encourage more people to transfer from CHSP services to the low care home care packages. It should be noted that there was no additional funding or other announcements in respect of CHSP. Click here to Download the report.

The StewartBrown June 2018 Aged Care Financial Performance Survey (ACFPS) incorporates detailed financial and supporting data from over 974 residential aged care facilities and over 24,952 home care packages across Australia. The quarterly survey is the largest benchmark within the aged care sector and provides an invaluable insight into the trends and drivers of financial performance at the sector level and at the facility or program level. Click here to access the sector report for June 2018. For more information on the Aged Care Financial Benchmark Survey click here.