The aged care sector is set for big changes
Australia's aging population is predicted to drive massive growth in the aged care sector, which will demand a rethink of funding, and governance, according to Grant Thornton reports.
The reports also outlined tough challenges facing the sector, including increasing consumer expectations, recent negative media attention, aging infrastructure, and the need to increase the skilled workforce.
So what will the aged care sector look like in the longer term?
Grant Thornton Corporate Finance Partner Mitesh Ramji outlines trends, opportunities and solutions.
Ramji says it is likely economies of scale will mean fewer providers offering a more diverse range of services.
He predicts a move toward a more deregulated market in terms of aged care bed licensing, with a trend toward self-funded in-home care which lowers the burden on government and allows clients greater independence.
It means a more skilled, specialised workforce will be required to provide higher-needs care in live-in facilities later in life.
"Larger providers will offer a continuum of care and aged services," he says.
"So you might have a provider that does everything from self-funded retirement living, home support services, home care which is low [levels of] care, to dementia care, and then pushing towards palliative care.
So that resident can move with that organisation, depending on the level of acuity."
But, Ramji says, access to this breadth of services will depend on what the client can afford. And consideration needs to be made around federal budgeting for the increased demand on services.
So what are the solutions?
Funding for the future
Ramji says increased funding will be critical to meeting future aged care demand, and some options will have a bigger impact than others.
He says stimuli such as payroll tax exemptions, waivers on transfer duty for land, and capital gains tax relief could help incentivise growth in the sector.
Government funding could also be increased, according to Ramji, if GST was increased to meet the cost.
Another consideration, according to Ramji, is building awareness in retirees of downsizing incentives.
The retiree may sell their larger family home to make a lump sum contribution to their superannuation.
This would help establish a greater pool of resources to fund their aged care needs.
Ramji also suggests targeting stimulus at aged care employment.
"For example, [one suggestion is] wider use of salary sacrificing or incentives for employees to move to rural and remote areas where we know the need is the greatest," he says.
Ramji says thin labour markets and broader workforce issues are going to continue to be a challenge for the sector.
The sector has high rates of casual and part-time staff, is primarily female, and has an older average age than the rest of Australia's general workforce.
Ramji flagged difficulty in meeting growing demand.
"We talk about the experience of the provider and the consumer, but what about the experience for the people working in the sector?
"It's a very challenging sector for staff dealing with death and dying and often not very well paid."
More mundane tasks may be able to be administered by technology, freeing workers for more face-to-face jobs improving care contact time.
Ramji says technology is also being used to facilitate more interactions with the client's family – from telehealth using mobile phones, and tablets, to better community social media platforms, helping improve families understanding of the service and the experience of their loved one.