A study released January 26, 2012 and commissioned by the aged care sector claims that modern single-room nursing home accommodation is unsustainable.
High-care beds in hostels and nursing homes get an accommodation cost of only $32/day, compared with the $73 capital cost suggested in the report.
The research by Grant Thornton Australia also suggests that the additional cost of $144/day to cover for the provision of care results in a cumulative shortfall of up to $62/bed/day.
In a statement, Aged Care Association of Australia chief executive Rod Young said the report underscored the urgency of the need for reform and repealing obsolete laws which prevent reform.
The Australian Cost of Residential Aged Care Research report said the findings confirmed the inadequacy of the return-on-investment obtained by modern facility operators for them to justify the funding of new supply.
To reach a satisfactory return-on-investment, operators must earn from $26,500 to $32,200/year for every high-care bed prior to tax, the study found, a far cry from their average earning of about $6,700.
Recognising the critical state of the sector, the Productivity Commission suggested August 2011 a total revamp including separate charges for accommodation and care. It also recommended the “progressive” deregulation of the amount of care packages given and the number of beds in nursing homes and hostels.
Under the proposal presently being mulled by the national government, elderly citizens would pay up to $60,000 to cover care expense plus "uncapped" charges for nursing home accommodation.
Now banned for high-care places, accommodation bonds should be permitted, though optional, for all residential care, the Commission believes.
Prime Minister Julia Gillard has assured reform under her watch, though the Labor government has not reacted yet to the Commission’s recommendations.
The groups that commissioned the report include Catholic Health Australia, Aged Care Association Australia, Aged and Community Services Australia and Australian Unity.