Modest profit lift for sector, says report

The financial performance of home care providers continues to improve, according to the latest government report.

The financial performance of home care providers improved slightly, according to the latest government report.

Released by the Department of Health and Aged Care, the Quarterly Financial Snapshot for January to March 2023 shows – compared to the previous quarter – profits were up for home care providers by $0.06 to reach $3.65 per care recipient per day.

This equates to a collective year-to-date net profit before tax of $214.1 million.

Source: Department of Health and Aged Care

The net profit before tax result has fluctuated in the first three quarters of the 2022-23
financial year. “The department will continue to monitor changes in profitability each quarter for home care providers and undertake further analysis as more data is collected,” say the report’s authors.

Overall, the year-to-date percentage of profitable home care providers increased slightly to 74.5 per cent – up from 73.8 per cent at December 2022 for the year to date.

Profitable home care providers serviced 75.7 per cent of all care recipients.

Source: Department of Health and Aged Care

Home care caps

“This is the first quarter of data available since the introduction of capped fees for care and package management to ensure that more funds are available to meet the needs of home care recipients,” say the report’s authors.

From 1 January 2023, care management prices were capped at 20 per cent of the package level and package management prices were capped at 15 per cent of the package level. While the median care management and package management percentages remain below the caps for quarter, they have increased for some package levels compared to the previous quarter.

The report shows median care management fees for level 3 and 4 packages increased from 16 per cent to 17 per cent over the two quarters and are now consistent with the percentages for level 1 and 2 packages.

While median package management fees for level 3 and 4 packages remained at 10 per cent, the fees for level 1 and 2 packages increased 1 percentage point to 11 per cent from the second to third quarter.

Source: Department of Health and Aged Care

Staff costs

The median total staff minutes was 54.17 minutes per care recipient per day with the total median staff cost increasing from the second to third quarter to $45.04 per care recipient per day – up $0.55.

Source: Department of Health and Aged Care

Home care providers submitted their average hourly rates paid to direct care staff for the period. The data showed the home care sector median of the average hourly rate was:

  • $50 for registered nurses
  • $37 for enrolled nurses
  • $33 for personal care workers.

The average hourly rate is reported by providers by calculating the average hourly rate of direct care staff employed as per the employee award, agreement or contract – it does not include on-costs, penalty rates or casual loading.

From the fourth quarter of the financial year – April to June 2023 – the department will be collecting additional information from providers on wages of direct aged care workers.

“This will allow for the monitoring and reporting of funding provided by the Australian Government for the purpose of increasing workers’ wages, as a result of the Fair Work Commission decision, and to ensure that funding is being passed on,” say the report’s authors.

Account balance

Since 1 September 2021, any unspent government subsidy accrued is held in a home care packages recipient’s Home Care Account Balance. There was an increase of $90 million in the total account balance as of 31 March 2023, while unspent funds reduced by $30 million.

Source: Department of Health and Aged Care

For-profit and not-for-profit home care providers are the primary provider type included in the quarterly financial snapshots. The reports draw upon data collected through My Aged Care and other internal departmental sources.

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Tags: January to March 2023, Quarterly Financial Snapshot,

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