New report suggests retirement living growth could save aged care billions

The Retirement Living Council released the Better Housing for Better Health report over the weekend, providing a clear view of how the retirement living sector is influencing aged care and what the future may hold for both retirement and aged care communities. 

Setting the scene

• Retirement communities have evolved, moving from villages focused on physical real estate to centres providing in-house care, well-being and support services for independent living
• Currently, there are approximately two million people aged over 75 in Australia with an expected 70% making it 3.4 million people over 75 by 2040
• Almost three-quarters of people aged 75 and over live in homes that have one or more spare bedrooms, indicating many are in homes oversized for their needs – and sometimes abilities
• Entry prices into retirement communities are, on average, 48% lower than median house prices in similar areas

Australia’s ageing population is arguably the driving force behind a reimagined retirement living sector. With nearly 10% of the population over 75 by 2040, there’s a considerable number of people who will be seeking and living in communities designed to keep them fit, social and healthy. 

Retirement Living Council (RLC) Executive Director, Daniel Gannon, said the rise of retirement settings that can offer a plethora of care services and delay older people from entering residential aged care are a benefit to the sector. 

“If we think residential aged care is under immense challenges now then it’s only going to get more and more tricky over the next two decades as Australia’s population continues to age,” Mr Gannon said.

The number of residential aged care recipients is expected to double by 2040, with roughly 270,000 residents set to place a considerable amount of pressure on the sector. Added financial and workforce strain could negatively impact the quality of care provided.

RLC’s report highlights the full potential of increased access to home care services for older people living in retirement communities, particularly those with embedded healthcare services. Focusing on the different services and opportunities retirement living and aged care sectors provide is one step towards relieving the pressure on aged care, according to Mr Gannon.

“A lot of people think residential aged care and retirement living are the same thing but they’re not. It comes down to lifting the awareness and profile of this sector so that more and more Australians better understand the healthcare benefits,” he explained.

Reduced Government spending burden

There is the potential for retirement living to reduce Government spending on aged care, with the RLC identifying possible savings of between $350 million and $1.05 billion by 2030.

Simply delaying an older person’s entry into aged care by one year could substantially reduce expenditure by $350 million, although it is a two-year scenario posed by the RLC that highlights the greatest savings.

They suggest a two-year delay to aged care alongside a larger volume of retirement community units (Up from 12.6% to 14% of the market share) could save over $1 billion. These savings even include an additional $989 million for home care, which is offset by over $2 billion saved in residential aged care spending.

Enhanced healthcare support

• Retirement communities help residents remain roughly 15% more active than their peers living in the community
• Residents are also 20% less likely to be hospitalised after entry due to the additional support available
• They are also five times more engaged in social activities than non-residents

Nearly 45,000 people were waiting to access a Home Care Package as of September 2022, with the bulk of people living in New South Wales and Victoria. By providing an environment where older Australians maintain independence and have easy access to health and aged care services, there is the hope that home care service waiting lists can be reduced. 

This is reflected by a growing trend of retirement and aged care providers embedding healthcare and aged care services within their communities. At Ryman Healthcare’s Weary Dunlop Retirement Village, GPs provide on-site services twice a week, reducing the burden on other GP clinics and hospitals.

“Ryman makes it as easy as possible for us to provide a high standard of care for residents. We can access patient records from our medical clinic and issue prescriptions remotely. By having GPs onsite at least once a week and working closely with the doctors at our clinic, Ryman is helping reduce waiting times and long hospital queues in the local community,” explained Dr Silva, a GP at Wheelers Hill Clinic.