Aged care transitioning towards future profitability: survey

Mirus Australia

Tuesday, 11 June, 2024

Aged care transitioning towards future profitability: survey

Aged care leaders are adapting to new funding structures and considering innovative strategies, a new survey has found.

The Mirus Australia survey was completed by 233 aged care leaders from 170 organisations within Australia. It explores the financial impact of the Australian National Aged Care Classification (AN-ACC) compared to the previous Aged Care Funding Instrument (ACFI) and highlights the sector’s proactive stance towards future profitability.

“The transition to AN-ACC has brought both opportunities and challenges. Our survey shows a cautiously optimistic view, with 60% of respondents agreeing that their business is financially better off under the new structure. However, there’s still a significant portion — 32% — who are unsure about the impact, indicating the need for continued support and adaptation,” said Andrew Farmer, CEO of Mirus Australia.

Key findings from the survey include:

Financial impact of AN-ACC vs ACFI
  • 16% of respondents strongly agree their business is financially better off under AN-ACC.
  • 44% agree, while 32% are unsure and 8% disagree.
Dependence on non-care income
  • 7% strongly agree that future profitability will depend on non-care income.
  • 44% agree, highlighting the sector’s shift towards alternative revenue streams.
  • 43% are not sure and 6% disagree.
Strategic reviews and innovation
  • 27% strongly agree they will review alternative strategies for profitability over the next 12 months.
  • 56% agree, showing a majority are ready for strategic changes.
  • 16% are not sure, reflecting some uncertainty.
Key factors for future profitability
  • 10% see increasing accommodation prices as key.
  • 15% focus on increasing consumer contributions to daily living.
  • 14% plan to increase revenue from additional services.
  • 9% consider retaining a component of deposits.
  • 11% are exploring other innovations.
  • 41% believe a combination of all these strategies is essential.
     

“The emphasis on non-care income and the proactive review of alternative strategies indicate that aged care leaders are keenly aware of the need for financial innovation. Identifying alternative revenue streams and adopting a multifaceted approach to profitability are critical for ensuring long-term viability,” Farmer said.

“The fact that 41% of respondents believe a combination of strategies is essential really tells the story of complexity of the financial landscape in aged care. It’s not just about increasing prices or consumer contributions; it’s about integrating multiple approaches to build a sustainable business model.”

The survey results reflect an industry that is not only adapting to new funding mechanisms but also proactively seeking innovative solutions to future challenges.

Image credit: iStock.com/cherdchai chawienghong

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