Reforms are producing an aged care supply crisis, provider warns

Aged care reforms have created an unwanted side-effect – insufficient growth to meet demand.

Aged care homes are growing the number of beds at only half the rate of the previous five years. And that is placing significant strain on the industry as a whole, say providers.

Bolton Clarke, Australia’s largest not-for-profit aged care provider, has analysed the government’s data, which it says highlights a potential supply crisis. Bolton Clarke policy executive Tim Hicks says all providers must prioritise new infrastructure investment to avoid aged care supply shortfalls.

“We have evidence that demand is growing faster than it has been,” he says.

An increase over the past year was likely driven by Australia’s ageing population, he postulated, which puts the industry “in a tricky situation where the recent investment environment makes it harder to build new stock”.

The other side of the aged care equation

But there is another factor driving industry shortages, says Mr Hicks, one resulting from government reforms. New staffing requirements are discouraging providers from expanding their services due to a shortfall of available workers, he says.

These changes include a requirement for a registered nurse at every facility at all times and mandated care minutes. The reforms were due to be implemented this week. While few would argue with the aim of the reforms, they may prove to be a short-term double-edged sword.

Aged Care Industry Association chief executive Peter Hoppo says providers are attempting to meet these requirements by reducing occupancy levels. This could result in the ‘haves’ having better care than ever but a rising number of ‘have-nots’.

“We know that our population is ageing rapidly,” Mr Hoppo says. “We must see much more investment in the sector now if we want to ensure that people continue to have the quality aged care support and services they need.”

What the government says

While the rate of growth has fallen, there is still growth, a fact the Albanese government is keen to emphasise. Aged care minister Anika Wells says the number of residential aged care places has continued to increase each year.

The 2023 figure of 225,388 is up from 217,067 in 2019, Ms Wells says. She also lauded her government’s nursing reforms as resulting in better care for elderly Australians.

Ms Wells also points to other reforms that support aged Australians who want to remain at home for longer. This has led to “a 14 per cent increase in the number of people with access to a home-care package in the past year”, she says.

It reflects “what older Australians have repeatedly told us they want – to remain independent in their homes for as long as possible”, she says.

Whether the government’s reforms will prove adequate remains to be seen. The answer is likely to present itself soon enough, though, based on current projections.

The latest Intergenerational Report projects an increasing life expectancy for Australians. For men life expectancy is projected to increase from 81.3 years to 87 years over the next four decades. For women over the same period, a rise from 85.2 years to 89.5 years is forecast.

Caring will be a challenge that faces communities and governments, present and future.

Has Australia done enough when it comes to aged care? What else do our governments need to do? Let us know your thoughts in the comments section below.

Also read: Age Pension ‘burden’ expected to shrink – but aged care costs will balloon