LASA Q Focus Magazine - Leading Age Services Australia ...

AGED CARESURVEY“On a national level, if threequarters of today’s 180,000residential aged care places couldsave $1.95 in admin costs perday, there would be a resulting$96million of sector-widesavings per year.”According to Shonhan, thesurvey results also point to theincreasing imperative to focus onefficiency measures in aged care,such as upgrading technologyto “by-the-bed” tablet recordkeeping to reduce administrationtime spent by care staff.Further efficiencies can also begained through consolidation orgroup purchasing arrangementsfor clusters of smaller aged careproviders.“The survey found thatfacilities with more beds (60or more) performed better, asadministration costs were ableto be spread out over moreresidents,” said Mr Shonhan.“It is inevitable smaller providerslook to consolidation in thefuture as a means to enhancetheir efficiency.”Additional survey results include:• The average net profit standsat 7.8 per cent, well below2005-06 levels of 9.95 percent.• Care costs now represent67 per cent of the averageprovider’s expenses (up from65.3 per cent in 2011), withaccommodation at 15 percent and services at 18 percent.• Between 2011 and 2012:o Average income -including subsidies,consumer and otherfunding combined – grew7.97 per cent.o Care costs (wheresubsidies are generallyfirst directed and whichinclude items like nursingand chemist supplies),jumped 11.58 per cent.o Average services costs(like cleaning andcatering) grew 9.07 percent.o Accommodation costs(like energy and rates)decreased slightly, down1.19 per cent.• Accommodation bondsmake up almost a third(31.17 per cent) oftotal financing. Thispercentage has steadilyincreased from 16.83 percent in 2005-06.• The average return onequity in aged care at6.57 per cent, which isrelatively low comparedto the returns in excessof 10 to 12 per cent thatefficient providers wouldlook for as a return ontheir equity.2012 Bentleys Aged CareSurvey reports are available fordownload by participants atwww.agedcaresurvey.com.auIndustry participants, banksand other interested parties canpurchase the data from the agedcare survey website also.Heath Shonhan will speak at theLASA National Congress, 4-7August in Sydney.About Bentleyswww.bentleys.com.auBentleys is an association ofindependent accounting firmsin Australia with specialistexperience in the aged care andretirement village industries.Bentleys offers a broad rangeof services including businessand corporate advisory, taxationsolutions, corporate recoverystrategies and aged care specificaudit programs. Since 1994, ourannual aged care survey hasbeen benchmarking the financialhealth of the aged care industryto guide the decision making ofproviders, the government andthe financial sector.Find out more atwww.agedcaresurvey.com.auHeath ShonhanDirector and Aged CareSpecialistLASA-Q Focus | Autumn edition 2013 23