Advisory and consultancy firm Korda Mentha released their aged care report at the end of 2014, and the results are certainly interesting for those involved in the sector.
The publication, entitled: Residential aged care industry, consolidation and convergence, details a number of important concerns specific to residential care, including growth, government reform and ongoing financial performance and viability.
Here, we'll take a look at several of these areas – necessary considerations for a sector that's set to see substantial expansion throughout the country over the next few years.
The state of the industry
Residential aged care is a massive Australian industry, currently around $14 billion. What's more, it's regulated to an extremely high standard. Korda Mentha noted that the federal government currently funds a significant two thirds of the operating revenue.
There's no denying that the residential care sector depends on this funding, and it's only likely to grow as elderly population continues to climb.
This leads into demand for care, which will likewise continue to rise. However, accommodation needs aren't the only issue – those entering care will require more choice and have more expensive care needs.
"Whilst the Living Longer, Living Better reforms have targeted community care as a preferred option (and directed significant funding to community care programs), in the longer term the growing need for higher care residential services will prevail," the report noted.
The impacts of Living Longer, Living Better
These reforms are necessary for the viability of the industry, but Korda Mentha explained that there are likely to be skewed benefits. In fact, metropolitan For Profit providers that specialise in High Care will likely have the most favourable outcomes.
For providers already struggling, the impacts could be significant.
Looking ahead – consolidation, convergence and growth
Korda Mentha noted that consolidation, convergence and growth in specialised services were set to be the main areas of focus for residential aged care providers in the near future, with large For Profit providers standing in the best position to take advantage of the developments.
It's now time for providers to start thinking about the future of the aged care sector, especially given the long term impact of reforms down the track.
What do you think are the biggest opportunities for success in the aged care industry today? Please contact us and let us know!