The inaugural edition of the RSM Aged Care Sustainability Review has highlighted a number of issues and trends that directly relate to the viability and sustainability of the residential aged care sector. Key findings from our research include:
1. Forecasts as to the population who may access residential aged care services in the future vary considerably.
2. Official estimates of demand are more likely to be understated than over stated. If the current utilisation rates are maintained then the base rate of demand may be up to 13% (35,000 places) above official forecasts.
3. Recent domestic trends and overseas experience suggest that the basis on which future demand has been forecast may need to be revised.
4. We see little evidence that sufficient supply can be created to meet the most optimistic forecasts of demand during the next decade
5. The available statistics suggest that even if supply could be created to meet demand that there is insufficient appetite for this within the sector.
6. There is an emerging trend towards shorter stays (1-3 mths) and this may be contributing to higher vacancy factors
7. Increased interest in applying for new places is yet to translate into more operational places
8. Despite improvement in operating performance in 2014 the industry is no more profitable than it was in 2012.
9. The profitability of the industry is declining
10. Return on assets and equity continue to decline
11. Indications are that the industry will become increasing reliant on short term finance in the form of resident loans which increases the risk profile of the industry
12. Recent interest in the industry is more focused on investment returns than creating additional capacity
We wish to acknowledge the support of Macquarie Telecom and St.George bank, our partners who have made this publication possible.
Macquarie Telecom is Australia’s number one B2B telecommunications company. With business-grade Voice, Data and Mobile services, we offer a truly integrated end-to-end telecommunications solution. However, Macquarie Telecom is not ‘just another Telco’. With a net promoter score of +56 we have some of the happiest customers in the Industry. In working with aged care providers for over 15 years now, we understand the challenges they face and how to tailor the right solutions to meet their needs.
Dedicated to Seniors Living Banking for more than 20 years, St.George recognises that the sustainability of the aged care sector is critical in shaping a positive outcome for Australia’s social landscape. We are proud to be partnering with RSM to bring you the inaugural Residential Sustainability Review.
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Download the RSM Aged Care Sustainability Review 2016