Average staff hours per home care client have reduced to “potentially unsustainable levels”, according to a key financial report.
The latest StewartBrown Aged Care Financial Performance Survey, released this month, shows that average hours have dropped to less than six hours per client over a week.
StewartBrown says while the financial impact of COVID-19 hasn’t affected the December 2019 indicators, the pandemic will heavily influence the results for subsequent quarters until the virus stabilises and the economy returns to normal.
The report notes the government’s announcement of additional funding for staff retention but warns it may not be enough to cover the additional operational and regulatory burden involved in protecting aged care recipients from coronavirus.
Senior partner Grant Corderoy says COVID-19 represents a major challenge for home care providers, who are likely to see a decrease in demand for services by consumers who are self-isolating, coupled with loss of workers through illness, reluctance to attend people’s homes and increased childcare demands.
“We’re going to have that double sword of consumers wanting less hours and providers having less staffing hours they can provide,” he told Community Care Review.
Slight improvements in operating results
The report, based on data from 36,529 home care packages for the six months ending December 31, shows while revenue per client decreased by 6.1 per cent, operating profit was up by $1.40 compared to 2018.
Direct service costs decreased by $4.29 and staff hours per week reduced by 0.9 hours per client to an average of 5.8 per week.
“Whilst home care operating results were at a slightly improved level, revenue per client day has reduced and, importantly, average staff hours per client have reduced to potentially unstainable levels,” the report says.
“The mix between appropriate staffing and revenue will dictate the ongoing financial performance of the home care sector.”
Stewart Brown warns however that the improvement in financial performance may be the result of decreased staff hours and other reduced costs rather than an increased cash flow.
“Whether this is sustainable is open to conjecture,” the report says.
Mr Corderoy says that in the last two years, hours of direct home care have dropped by one and a half hours a week and for the top performing 25 per cent of providers hours have dropped even more from 8.8 to 6.5.
Mr Corderoy says it’s now reached the point where providers need to up their hours of care to compensate for declining daily revenue per client.
“In other words providers are going to have to increase the number of hours, unless they increase what they’re charging” he said. “What we’re seeing is that providers now can’t be reducing their hours any more”.
Unspent funds climb towards $8,00m
Unspent funds increased by about $1,078 per client to $7,904 per client, leaving more than $800 million sitting unused in coffers and making it an ongoing area of concern for home care providers.
“The biggest single issue in relation to Home Care Packages remains in relation to the level of unspent funds,” the report says.
“This continued growth in unspent funds, and many probable instances of their use for capital-related expenditure for care recipients is not sustainable. “
However Steward Brown says the recently announced changes to subsidy payments “will largely address the unspent funds concerns in this regard” the cash flow implications of the proposed reforms will need consideration.
“In-home care requires the redistribution of unused funds which are not being fully utilised in addition to the ongoing issue of more funding packages to meet consumer need,” the report concludes.
“Service revenue must improve to ensure that staffing hours per care recipient also increase to meet the ongoing care needs.”