Jan 15, 2015

Profits rise, quality called into question in aged-care industry

Reforms to the aged-care industry have made running those businesses more profitable. But at what cost to the people they're supposed to be caring for?

Paddy Manning

Crikey business editor

Private industry figures show nursing homes more than doubled their profitability on average last year by cutting down on hours of care, particularly from trained nurses, and other costs per resident.

The annual survey by Bentleys Chartered Accountants was released in summary form late last year but a full copy of the survey has been provided to Crikey. The survey covers 179 nursing homes around the country, breaking down average income and expenses line-by-line, and shows that net profits jumped 159% last year, from $4.14 to $10.71 per resident per day.

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7 thoughts on “Profits rise, quality called into question in aged-care industry

  1. JMNO

    Having had two parents go through aged care homes and many friends in the same position, my advice to others considering aged care is always to choose a not-for-profit provider. They vary in quality as well but they are there usually because of a commitment to caring for people rather than making money

  2. Norman Hanscombe

    An interesting statistic would be a concise summary of how the Government and Private Nursing Homes compare on costs per capita to taxpayers.

  3. The Pav

    This is not the type of industry that large corporates should be involved.The large not for profits can be just as bad

    Small to medium size operators will keep the market competitive whilst no allowing no large player to have undue influence

    The next scandal will be when somebody rips of millions of Accommodation Bonds and the Feds have to pay out compo

  4. bushby jane

    I thought that the charming Dr. Wooldridge had already been involved in something like that,although he didn’t get into too much trouble from memory.

  5. GF50

    Thanks Paddy, now for the Private Hospitals robbery of the Medicare system!

  6. AR

    Profits up, care of the most vulnerable down. In other breaking news, water is wet and ..ahhh fuggit

  7. Jack Robertson

    Hey Paddy, long time no etc, hope all is well. Since I discovered that ranty lefty writing doesn’t pay the rent I’ve been working in Aged Care, so this stuff is interesting to me. One of the striking changes occurring in this industry is just how lucrative the hardhead$ are recognising it will be. One of the few guaranteed, captive and expanding markets going forward – throw in buckets of guaranteed government money and the promise of more to come and every suity bastard is now sniffing around. For those who will grab the opportunity for profiteering Aged Care has the magnificent advantage of a high level of inherent societal guilt attached, of the kind that discourages the average bleeding-heart progressive from applying too much scrutiny to the money-grubbers. Everyone’s got the guilts about dumping mum and dad.(No, now, do spare me the protesting, everyone: I’m actually the one wiping your dad’s arse, so save me the usual pious ‘Oh, you’re so wonderful, Í could never do what you do…’. Yes, you bloody could, you just choose not to. It might be because you and your partner are dirt broke and both have to work multiple jobs just to pay your rent. Or it might be because you’d rather do six Pilates classes a week than drop in on your mum for a daily chat, while hubby can’t bear the thought of not working the Futures Market 12 hours a day 7 days a week, because it might reveal to his mates that he’s got a small penis.)

    Aged Care is a pretty simply issue, really. And if we’re going to make it work into the future, people have got to have the intellectual honesty to face up to the fact that the level of care we provide to our old people is a function of the priority we choose to give it, collectively and individually, over other things we choose to do with our…time. Because time is the only thing you really need to provide good quality aged care – the level of care that doesn’t end up in those (to us Carers) tediously regular outbreaks of hidden-camera Walkley Gotcha! moments, and narcissistic public breast-beating by Ladies Who Lunch. Yeah, sure, qualifications, facilities, regulations, oversight, checks-and-balances, all that jazz are important, but overwhelmingly looking after an old person just needs…time. Time. That is, face-to-face care time, per carer, per client. Arguing about all the rest – private/public, bonded or daily fees, quality control, RN versus Carers – is kind of side-stepping the simple question: how many carers are we as a society prepared to provide per oldie? RN or AIN (or brain surgeon for that matter), the more human beings you have at the coal face caring for each old person daily, the better daily the care each one will get. By all means medical expertise is important, but the reality is that medically complex instances are going to be dealt with by doctors and nurses anyway. Wiping bums, showering people, dressing them, helping them get about, keeping them active and entertained and feeling valued as people…this is the bread and butter of ‘good’ care, and it needs carer numbers more than it needs anything else. So, for example re: this may very well make for better care standards overall to hire a dozen (good) Carers (at $20/hour) than to hire six Carers and three RN’s at $40/hour). That’s not to suggest that this is the trade-off many facilities make in cost ‘efficiencies’ – sure, they’re much more likely to hire six Carers and one RN (part-time), and pocket the difference. What we have to do is chest-poke them on this, but the only way we can free ourselves to do so openly and without reservation is to recognise that what we are buying when we choose to pay someone else to do for our kin what, in most societies still, families do themselves, is…’time’. The better care you want, the more time you need to pay for (and the more you need to ensure your commercial system is based upon the efficient provision of the right product – time – and can be scrutinised on THAT.

    Why else does the industry relentlessly resist minimum mandated staff-client ratios? Jesus, it’s hardly rocket science.

    So: the community needs to start arguing about this key question in the Aged Care industry directly, otherwise the industry will keep getting paid more and more (by us) for ‘time’, while keep providing less and less of it per client, the process being politely ignored by us, because we feel guilty, knowing that we are perfectly able to provide the product ourselves – ‘time’- but make a choice not to.

    Cheers Paddy, sorry for length, close to home!

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