The number of loss-making aged care facilities continues to rise and is expected to worsen due to the coronavirus pandemic, an industry expert has told Australian Ageing Agenda.
Accounting and benchmarking firm StewartBrown report released last week shows that 56 per cent of aged care homes recorded an operating loss (negative earnings before tax) and 29 per cent reported a cash loss (negative earnings before interest, taxation, depreciation, amortisation and rent) for the six months ending December 2019.
This is up from 51 per cent and 27 per cent respectively for the quarter ending September 2019 and 42 per cent and 21 per cent respectively for the six months ending December 2018.
StewartBrown senior partner Grant Corderoy said he expected the results and continued deterioration due to COVID-19.
“We expect most of those percentages to continue to deteriorate over the next six months, it would have anyway, but obviously with COVID, it’s going to cause a greater deterioration of the results,” Mr Corderoy told AAA.
Facilities operating a loss are increasing in all areas and are the worst in outer regional, rural and remote locations (71 per cent), followed by inner regional (61 per cent) and major cities (52 per cent), the survey shows.
Mr Corderoy said there has been no improvement to any of these figures because of the small increase in the Aged Care Funding Instrument subsidy and the larger increase in direct care expenses.
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Almost 6 in 10 aged care homes reporting a loss (Australian Ageing Agenda)
Aged Care Financial Performance Survey (Stewart Brown)
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