Clouded with uncertainty: Providers show mixed confidence levels over aged care reform

The future of aged care remains clouded with uncertainty with 70% of service providers acknowledging they are concerned about Australia’s readiness to support a growing population. 

The Aged and Community Care Providers Association’s (ACCPA) inaugural State of the Sector survey also revealed mixed feelings about the aged care system, with a divisive 51% believing it’s on the right track. Concerns over Government funding, recruitment, the reform journey and support for smaller providers remain at the forefront of industry minds.

Key points

• Workforce remains a top issue with just 36% of providers confident in their ability to recruit staff and meet their care minutes requirements
• More than two-thirds of providers believe the transition timeframes for new aged care reforms are too fast; 84% said this would put increased strain on the sector
• Nine in ten providers are concerned about Government funding with only 28% confident they could attract capital for refurbishment or new builds
• Almost everyone, 97% of providers, are worried about the increasing costs associated with the delivery of services to older people

“Australia’s population is ageing and we need to be ready. It’s critical that funding is sufficient to deliver care and to attract investment so we can build for the future,” ACCPA CEO Tom Symondson said.

“These responses from providers show even more clearly that the Australian Government’s response to the Aged Care Taskforce as part of the new Aged Care Bill is essential to making the aged care sector more sustainable.”

Growing optimism shines through uncertainty

With the number of people aged 80 and over set to triple over the next 40 years, there is reason to be concerned about Australia’s ability to support a growing ageing population. Seven in ten aged care providers are worried about this. 

Meanwhile, a minority of providers – 11% in total – had either no confidence or low levels of confidence to meet projected demand over the next 12 months. 

Most – 77% – are very confident about their ability to meet growing aged care demand, however. A further 12% simply said they are confident.

Coupled with a growing level of confidence in where the sector is headed, there is optimism shining through the cloud of uncertainty. As ACCPA highlighted, the Royal Commission into Aged Care Quality and Safety detailed a system in crisis that was often not delivering quality care. That was in 2021.

Now, 51% of providers believe aged care is heading in the right direction thanks to a host of reforms that build on the Royal Commission’s recommendations. Large providers are among the most optimistic.

More work is required, though. One-third of the sector is still unsure if the reforms will pan out and result in sustainability and quality care. Another 16% said the aged care system is heading in the wrong direction. 

ACCPA urged the Government to ensure every provider involved in the system is taken on the aged care reform journey to avoid this. 

“Providers fully support well-designed reform, but that reform must be at a manageable pace and not exacerbate already existing problems,” Mr Symondson said.

Funding and expenses hinder progress

Despite multi-billion dollar investments into aged care in recent years, including the Government’s ongoing commitment to fully fund direct care, 92% of providers said Government funding remains one of the greatest challenges.

Growing expenses are partly to blame with the cost of materials for refurbishment or new developments a major barrier to improving the aged care environment. Limited resources for recruitment and staff retention have also hindered progress, especially for rural and remote providers.

Smaller providers with fewer than 50 employees were most at risk of closure, according to ACCPA’s data, with 20% not confident in their ability to continue to provide aged care services in the next 12 months, compared to 9% for larger providers.

The cost of delivering care is also rapidly increasing with 97% of providers concerned by increasing costs. Less than half of providers believed they could innovate to improve their service delivery as a result. Many also reinforced ongoing worries over attracting capital to invest in technology, provide better accommodation and deliver higher quality care. 

“This almost universal concern is not unsubstantiated, given 50% of residential providers continue to lose money and the margins of Home Care providers continue to decline – crashing to $1.80 per client per day in the first half of 2023-24, from approximately $3.20 in 2022-23,” Mr Symondson said.

The workforce divide

Workforce shortages and the ability to meet care minute requirements are top fears for providers, yet 78% are confident or extremely confident in their leadership teams and their ability to navigate and implement new reforms. 

There is less certainty about having enough direct care staff to meet key reforms such as care minute mandates and 24/7 registered nurse coverage. Providers were also split on their confidence that their organisation could meet the new requirements proposed under the Aged Care Bill with the available workforce.

• 91% indicated they have or are likely to recruit more RNs in the next 12 months
• 96% have increased hours or shifts allocated to existing staff (or are likely to) as a result of the reforms in the next 12 months
• Almost half have offered overtime to existing staff, while another 23% are likely to in the next 12 months
• Residential care and retirement living providers are more likely to increase their use of agency of staff
• Just 15% of providers have reduced operational places due to aged care reforms, while 14% are likely to over the next year

Reform challenges remain

Understandably, these workforce and funding challenges have resulted in many providers deeming the current reform timeline as too fast. Overall, 69% said the transition timeframe is too fast, with only 12% claiming it’s too slow.

Providers also demonstrated varying levels of confidence in meeting specific aged care requirements, with the most confidence found in meeting the 24/7 RN responsibility, strengthened Aged Care Quality Standards and overall governance requirements.

Lower levels of confidence were reported by providers struggling to meet care minute targets and supporting wage increases.

With most providers believing the new aged care requirements will put a greater strain on the aged care sector, there is a major desire for better-paced change and clearer communication from the Government. 

“Aged care providers are motivated to provide quality care and the best ageing experience possible for older people living in Australia. However, their transformation journey must be met with the right supports to enable them to innovate and evolve.

“By providing evidence-based insights, the collective voice of aged care providers outlined in this report will help direct the development of strategic mechanisms to alleviate pressures, enhance provider confidence and support long-term viability,” the report concluded.