The aged care industry in Australia is undergoing changes. Aged care providers – including home care and residential care – are diverse businesses. They operate in a landscape marked by an ageing population and growing demand for services, yet face an ongoing shortage of skilled workers to support this growth.
Aged care in Australia today
As the population ages, the need for aged care services will continue to increase. According to the Aged Care Taskforce report, people 70 years old and over will increase by 2.3 million over the next two decades. Demand for residential care is expected to double over the next 20 years, while the projection is that 1.7 million people will utilise home care by 2043.
The industry faces challenges and meeting demand is complex. This includes factors such as policy changes, a shortage of skilled workers, and the need for complex care models which include meeting mandatory care minutes and having registered nurses 24/7 onsite. All of these put pressure on margins, and managing finances can be a real challenge.
Challenges and opportunities for finance leaders in aged care
Finance leaders and professionals in the aged care sector face the ongoing challenge of balancing financial sustainability while navigating complex resident contributions, and keeping up with evolving government regulation and pricing policies. Â
Compounding these pressures are stringent staffing compliance requirements, which have a direct impact on the bottom line. The ability to optimise staffing ratios plays a pivotal role in determining whether a provider operates at a surplus or deficit, making workforce management a critical aspect of financial strategy.Â
These considerations – and more – impact service delivery and the viability of for-profit and not-for-profit providers alike. While there are challenges, the growth in the sector will create new opportunities and open avenues to not only provide a greater quality of care, but to do so in a sustainable way.Â
To succeed and stay ahead, it will be critical for leaders in the sector to have systems that can analyse data, optimise operations and reporting, and help them forecast and plan for the years ahead.Â
In this whitepaper, we delve into these challenges in greater detail, examining the vital role finance plays in aged care operations and exploring strategies to mitigate financial risks, ensure compliance, and enhance overall efficiency.Â
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In this whitepaper
- Workforce planning for aged care providers: Skill shortage is a persistent problem in aged care. We discuss the factors contributing to the skill shortage, how providers can gain operational efficiency and manage workforce costs, and key considerations for robust workforce planning and an effective labour plan.
- Funding management in aged care: The transition to the Australian National Aged Care Classification (AN-ACC) represented a significant shift in how aged care funding is structured. We discuss the impact of this based on provider profiles, the financial and operational challenges this presents, and how care minutes and other compliance need to be factored in. We also suggest what finance teams should consider when building aged care funding models.
- Capital investment decisions for sustainable growth: CAPEX planning in aged care is about balancing immediate needs with long-term sustainability. We discuss how to take a proactive approach to CAPEX so aged care facilities can remain competitive, deliver high-quality care, and achieve financial resilience in an ever-evolving sector.
- Financial planning and analysis for aged care: FP&A plays a central role in ensuring financial stability and growth of aged care providers. The key responsibilities of finance professionals include continuous financial analysis and reporting to assess the financial health of the organisation, dynamic budgeting and forecasting that is agile, regulatory compliance and funding optimisation, and providing strategic financial decision support. We discuss these roles in more detail and highlight solutions being adopted by leading providers.
