Concern as aged care facilities face collapse amid serious financial distress

Nov 12, 2019
Leading Age Services Australia has revealed almost 200 aged care facilities are in serious financial distress. Source: Getty

The concern is growing for Australia’s aged care industry with new data revealing up to 50,000 of the country’s elderly are at risk of inadequate care as facilities battle with dwindling finances.

The country’s peak body for aged care providers has crunched the numbers of the Government’s 2017-2018 Aged Care Financial Reports and found almost 200 facilities are experiencing unacceptably high levels of financial distress with money owed far outweighing assets.

Describing the situation as dire, Leading Age Services Australia (LASA) CEO Sean Rooney says the data is quite alarming for not only residents and their families, but also impacts stressed staff, financially stretched providers and the government. He has called for an additional $1.3 billion operational funding before Christmas for the facilities doing it tough and says structural adjustments are necessary to ensure the country’s most fragile have a roof over their head this festive season.

“We believe this is particularly critical for regional and remote providers, with the latest evidence given to the Aged Care Royal Commission highlighting concerns for the country services,” Rooney says. “This additional funding should be on top of the government’s welcome commitment to a quick response to the three immediate priorities highlighted in the Royal Commission’s Interim Report, which include a major home care boost.”

The new warning follows the release of LASA’s recent Aged Care Financial Risk Survey, which found 80 per cent of surveyed providers are facing challenges and if conditions don’t improve, 41 per cent may have to reduce direct care staff. Rooney says the number of providers operating in the red is shocking and is no doubt a contributing factor in the looming closure of three regional aged care facilities in New South Wales and Victoria.

“Our appeal for funding assistance has nothing to do with maximising profits,” he says.

“It is solely focused on maintaining and improving care, while avoiding more service closures.”

Unfortunately, the latest data follows a string of concerns voiced by providers. A recent survey of aged care workers revealed the shocking reality of overwork and chronic understaffing that is forcing workers to cut back on care for home care and residential aged care customers.

Nine in 10 residential aged care and home care workers said they were too stretched by heavy workloads to offer elderly Australians proper care. The worry caused by being forced to provide substandard care means depression, stress and emotional and physical fatigue are common among aged care workers.

As a result, four in 10 intend to leave the sector within five years, the survey by Australian trade union United Voice and the Health Services Union found. Furthermore, workers said they were dealing with emotional and physical fatigue, with four in 10 revealing they plan to leave the sector within five years.

This outflux of aged care workers has previously been flagged as a major problem for both the aged care industry and its customers. The federal government’s Aged Care Workforce Strategy Taskforce warned in June 2018 that the aged care sector was suffering from high staff turnover, poor employee engagement and difficulty attracting workers – even though we are an ageing population.

Exacerbating the issue of surging numbers of aged care consumers, the survey of 5,000 aged care workers found that nine in 10 respondents from the residential aged care sector and more than seven in 10 home care workers said they’d seen a noticeable increase in the number of people who required complex care. Workers particularly pointed out a rise in the number of people with dementia requiring care.

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