Extra funding eases plight of nursing homes
By Mark Metherell
October 21, 2008
THE federal Minister for Ageing, Justine Elliot, has announced an increase for aged-care training after a survey found many nursing homes battle to break even financially.
Up to 7700 training places will be provided over four years for aged and community care workers, costing $41 million, she says.
But aged-care leaders say the Government is ducking the challenge of future capital funding needs for nursing homes, citing a survey that found nursing homes average a return on investment on new single-bed rooms of just 1.1 per cent.
The Prime Minister, Kevin Rudd, said the Government supported the "extraordinary" service given by Australia's 2.5 million carers when he launched Carers Week yesterday, when Mrs Elliot announced $12 million for more respite services for carers.
However, critics warn that without a financing revamp Australia will fail to meet surging demand for care of the aged.
Mrs Elliot has stood by the Government's refusal to ease the ban on accommodation bonds on high-care nursing home residents, which, critics say, is needed to provide the capital for more beds.
She said the Government was providing $300 million in no-interest loans for more nursing homes in needy areas, and overall was providing record levels of funding, which will average $41,500 a year for each resident by 2011. This is a $5500 rise in real terms since 2003-04, government figures show.
However, an expert on the economics of nursing homes, Warren Hogan, said that under present policies, which limit the sources of capital for high-care nursing home beds, the supply of places for residents needing nursing care will deteriorate.
Professor Hogan produced a report on aged-care financing for the previous federal government in which he recommended extending accommodation bonds. The bonds are levied on residents in low-care hostel-type institutions but not in those providing full nursing care after an outcry over the issue in the late 1990s.
The research into nursing home finances by the survey company Grant Thornton came at a critical time for demographic change in Australia, Professor Hogan said. The aged care system needed to be overhauled to ensure "quality, equitable, efficient and sustainable care".
The chief executive of Aged Care Association Australia, Rod Young, said a nursing home in Victoria had closed and others were in trouble because of financial difficulties. "Significant reforms are essential. If not … more providers will have to close."
SOURCE: The Sydney Morning Herald (Australia)
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