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Escape the city
A business case for
‘going up the country’.
to stay at home for as long as they can. This has been supported by
increased availability of home care packages as well as assisted living
and private care options.
The national residential aged care occupancy rate declined
dramatically to about 90 per cent by June 2018. The factors leading
to the Royal Commission into Aged Care Quality and Safety have no
doubt added to the reticence to enter residential aged care.
The top 10 Statistical Areas Level 3 (SA3s) by occupancy levels as at
June 2018 relative to remoteness of an area are shown below:
By Safdar Ali
A
ged Care Allocation Round (ACAR) 2019 released 13,500
residential aged care (RAC) places made up of 63 per cent
in capital city metro areas and 37 per cent in regional and
remote areas. Given that 32 per cent of the 70-plus population lives
in regional areas, it is evident the Department of Health is playing
catch‑up in the provision of RAC services outside metro areas.
The top five winners in the 2019 ACAR were:
Table 1: ACAR 2019 – number of allocated places
Applicant
1
2
3
4
5
Metro places Regionals Total
288
1020
89
417
226 1102
20
579
Nil
161 1390
1040
668
417
387
Signature Care
Opal Aged Care
Arcare
Lendlease Aged Care
Japara Aged Care
Source: Department of Health, 2019.
Signature Care Group, which focuses on regional development
of RAC facilities, was the most successful in terms of numbers of
allocated places. Interestingly, 1102 places (79 per cent) of Signature
Care’s were outside metro areas. All of these were in regional cities
and towns which have amenities and the population to effectively
support RAC staffing and operations.
Except for Arcare, this contrasts with the other members of the top
five that won places predominately in metros.
The chase for high value refundable accommodation deposits
(RADs) is a strong motivation for RAC providers to expand their
presence in metro areas. While RADs are higher in the metros, other
factors may favour portfolio expansion in the regions.
OCCUPANCY
Occupancy is a vital factor in ensuring the success of a residential
aged care facility. In more recent times, occupancy levels have been
falling due to people needing higher level care exercising a choice
10 agedcareinsite.com.au
Table 2: Occupancy – top 10 SA3s – 30 June 2018
SA3
Hawkesbury
Central Highlands (Tas)
Joondalup
Wodonga – Alpine
Tumut – Tumbarumba
Darwin City
West Torrens
Blacktown – North
Wanneroo
Darwin Suburbs
West Torrens
Remoteness area – ABS
Inner Regional Australia
Outer Regional Australia
Major Cities of Australia
Inner Regional Australia
Inner Regional Australia
Outer Regional Australia
Major Cities of Australia
Major Cities of Australia
Major Cities of Australia
Outer Regional Australia
Major Cities of Australia
Occupancy
rate (%)
100.0
100.0
99.7
99.3
99.2
98.8
98.4
98.3
98.2
98.1
98.4
Source: AIHW and The Ageing Equation analysis.
Note: Statistical Areas Level 3 (SA3) are geographical areas built from whole
Statistical Areas Level 2 (SA2). Table 2 shows that regional areas are well
represented in the top 10 areas ranked by occupancy.
SUPPORTED RESIDENT RATIOS
The government pays an accommodation supplement for low
means, supported residents. The present maximum supplement
is $57.14 per day if an RAC service has more than 40 per cent
supported residents and is significantly refurbished or newly built. The
supplement falls by a quarter to $42.86 if the RAC has less than 40
per cent supported residents. The Maximum Permissible Interest Rate
(MPIR) is used to equate daily accommodation payments to a RAD
alternative. The rate is currently 5.96 per cent. Using this translation
rate, a full accommodation supplement equates approximately to an
RAD of $350,000.
Average supported resident ratios are higher in regional areas
and therefore, on average, provide greater opportunity for providers
to access the full accommodation supplement for 40 per cent of
residents equivalent to an RAD of $350,000.