08/10/2009 - 00:00

Aegis consolidates in aged care

08/10/2009 - 00:00


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BURSWOOD-BASED Aegis Aged Care Group has strengthened its ranking as the largest operator in the sector by taking over six facilities, despite financial pressures besetting the industry.

BURSWOOD-BASED Aegis Aged Care Group has strengthened its ranking as the largest operator in the sector by taking over six facilities, despite financial pressures besetting the industry.

Combined with the development of a new centre in Spearwood and the expansion of two existing centres, the number of beds managed by Aegis will increase from about 1,300 to more than 2,100 beds.

That compares with the sector's number two-ranked provider, The Bethanie Group, which manages about 1,240 beds.

Also expanding is Applecross-based Baptistcare, following Silver Chain's recent decision to offload its residential aged-care facilities.

In the deal, the not-for-profit group will shift its focus to community care services by selling seven residential age care facilities to Aegis and Baptistcare.

Silver Chain communication manager Nick Harvey said the move away from residential healthcare was to refocus efforts on core business services.

“Our core business is delivering health and community care in people's homes throughout Western Australia," he said.

“We want to expand our services in that area in the years ahead, and residential care was not part of that strategy".

Aegis Aged Care will buy Cottage Homes in Highgate and take over the operating licences for lodges in Hilton and Claremont. Silver Chain will retain the freehold on the latter lodges.

Aegis chief executive Michael Cross said the acquisition was a practical way to improve the group's residential aged-care capabilities, particularly due to high costs to build new infrastructure.

“This was a strategic move by us to take over some facilities," he said.

“It's a more viable way to do it, rather then spend $15 million or $20 million on a new 100-bed facility."

Currently operating 1,320 low-care and high-care beds in the state, Aegis' planned purchase from Silver Chain will increase that number to almost 1,500.

Aegis is also believed to have finalised plans to buy three facilities with about 300 beds from another group in the sector.

Meanwhile, Baptistcare, which employs almost 1,100 staff, will extend its services in the state's South West region through the purchase of four Silver Chain lodges, in Albany and Margaret River.

Due to take place next year, the takeover will extend Baptistcare's network to 15 facilities and increase bed numbers from approximately 700 to nearly 850.

Baptistcare managing director Lucy Morris said the new facilities would help achieve the group's primary goals.

“Residential services for seniors is our primary business, what we're good at and what we've done for nearly 40 years," Dr Morris told WA Business News.

“We're hoping to create clusters of services so it's easier and we're more localised for people to access our services."

The aged-care sector, which was last reformed in 1997, has struggled to cope with demand and has been crippled by a lack of growth.

CEO of the Age Care Association WA, Anne-Marie Archer, is optimistic about the benefits expected from the deals, but has stressed that both the national and state aged-care sectors remain in critical need of reformed regulation.

“It's fantastic that they're taking over these facilities, and it's fantastic that they'll be maintained, but it doesn't fix the overarching long term problem," Ms Archer said.

She said the industry still required growth to cope with the unstoppable influx of people requiring on-going care.

“You need the industry to keep on growing, otherwise the burden will fall back on the state health system which isn't designed for that purpose," Ms Archer said.

Despite a record level of federal government funding, "under the current model of funding, there just isn't the financial capacity to get the return", she said.

“Most of those funds will never ever hit the ground in WA."


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