Australia’s residential care providers are in a challenging environment. While some providers are making healthy profits, smaller providers are struggling to survive.

This survival-of-the-fittest approach was exposed by ABC’s recent 4 Corners program, which put a spotlight on failures of parts of Australia’s residential aged care system and served as a catalyst for the announcement of a Royal Commission into Aged Care Quality and Safety.

The data has been clear for a long time. Residential care providers are struggling, complaints have risen, and staffing skill ratios have declined.

It’s a tough business. In March this year, 43.1 per cent of residential care facilities had a negative earnings result (Stewart Brown 2018). Unsurprising given that three in four (75 per cent) complaints are directed to the residential care sector.

Operating within just residential care is becoming increasingly unviable, especially if you’re a small provider. Providers providing only residential care fell by 16 per cent in the year to June 2017, compared to home care, which saw providers increase by 125.3 per cent.

These trends will continue, as smaller and less efficient providers are absorbed by larger players. But thought needs to be put into how this adjustment process impacts the lives of our elderly.

Complaints have risen 46.8 per cent in the past two years to June 2018, while referrals to the quality agency – which are more serious and systemic in nature – doubled to 1073 in the past year.

Aged care complaints, 2012-2018

Source: Aged Care Quality Agency 2018

The 2016 Aged Care Workforce Census shows a clear trend in staffing ratios. In the past 10 years, the number of registered nurses to personal care attendants declined by 26.5 per cent, leaving just one registered nurse to 6.1 personal care attendants.

Growth in aged care employment has come from lower skilled personal care attendants (PCA) and community care workers (CCW) alone. While nursing and allied health employment has declined, PCAs and CCWs grew by 24.3 per cent.

10-year growth in aged care workforce by occupation, 2006-2016

(PCA – Personal care attendant, CCW – Community care worker, AH – Allied health, EN – Enrolled nurse, RN – registered nurse). Source: Aged Care Workforce Census 2016

The funding data doesn’t match up either. Government funding for aged care increased by 2.1 per cent in the year to June 2017 – the lowest growth rate in 10 years. This occurred at a time when the number of Australians over the age of 70 increased by 4.8 per cent – the highest growth rate in 10 years.

Naturally, we all hope the royal commission will prevent future failures. But we need to acknowledge the costs it has to already struggling providers – making prospective customers more distrustful and interrogative in the already difficult information search, devaluing front-line staff who work for some of the lowest wages across Australia, and increasing compliance costs for an industry already struggling to keep up.

Let’s just hope in a years’ time we learn something we don’t already know. The money spent on the inquiry would be very helpful to the 122,000 in the home care queue.

Download a copy of the CoreData white paper, Australian aged care: an industry in flux