THE aged care industry has warned that Western Australia is heading into dangerous territory, with only a quarter of the 1,300 bed licences recently made available by the federal government expected to be taken up.
THE aged care industry has warned that Western Australia is heading into dangerous territory, with only a quarter of the 1,300 bed licences recently made available by the federal government expected to be taken up.
With more than half of all aged care facilities in the state operating at a loss, members of peak industry body Aged & Community Services WA have indicated it is no longer feasible for nursing homes to build new beds without urgent regulatory reform.
"The key challenges in the state are that our members have stopped building. There's no business case to build things, you can't build things to lose money," ACSWA chief executive Stephen Kobelke said.
The federal government received the first solid evidence of the poor state of the sector in 2006-07, when for the first time ever the allocation of bed licences was undersubscribed, with only 634 of the 1,000 new beds offered in WA taken up.
Ageing Minister Justine Elliot has since announced more than $41 billion worth of funding over four years to aged and community care in Australia, including $28.6 billion for nursing homes.
"Make no mistake, this is about putting in more nursing home beds and community care places in areas where they are needed most," a spokesperson for the minister told WA Business News.
"This year alone, WA aged care providers will receive $547 million in taxpayer subsidies."
However, the industry believes the funding doesn't go far enough, with signs of the mounting strain already showing in WA.
Silver Chain has had to overhaul services at its Hilton-based John Mercer Lodge after it failed to meet 36 out of 44 national industry benchmarks.
Silver Chain chief executive Chris McGowan told WA Business News that, like many aged care providers, Silver Chain was struggling to make ends meet.
"There has to be a fundamental change in aged care," he said.
"The return on investment is very low at the moment and there would be very few services with surpluses."
Residential aged care provider Brightwater Care Group's chief executive, Penny Flett, said stringent government controls on revenue and price indexation was forcing the industry to a "grinding halt".
"I think the situation will get worse. One of the issues is that it's a federal government system that's too tightly regulated," she said.
"And sometimes I don't think they're responsive to local pressures."
Last week, the Aged Care Association Australia welcomed calls by Catholic Health Australia and Catholic Health Care Services for changes to the rules regarding residential aged care capital raising capacity.
ACAA chief executive Rod Young said a recent survey of more than 700 aged care providers revealed many achieved a return in investment as low as 1.1 per cent.
"The industry's preference is to allow new residents to exercise choice as to how they pay for their accommodation and hotel services," he said.
