Embracing transformation in Aged Care

Darrell Price
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Ten years after the implementation of the Living Longer. Living Better Reforms, the aged care sector braces for more change. With the Federal Budget on the horizon, it will be interesting to see what considerations are given to a sector that faces continued uncertainty.

Since the Royal Commission into Aged Care Quality and Safety’s findings in 2021, pivotal steps have been taken, including the Government’s appointment of an Inspector General of Aged Care, Mr. Ian Yates AM, to track progress, and the establishment of the Aged Care Task Force (ACTF) to tackle funding deficits. 

In conjunction with the Commonwealth Bank of Australia, Grant Thornton convened CEOs nationwide to explore current challenges, the impacts of ACTF recommendations, and the future of senior care services. As the aged care sector navigates these transformative shifts, we shared perspectives on the essential focus of collaborative efforts, regulatory clarity, and strategic vision to ensure the well-being and dignity of senior Australians.

The Aged Care Taskforce

The Aged Care Taskforce (ACTF) has effectively captured the critical funding issues within the current system, primarily focusing on revenue streams and Commonwealth subsidies. While commendable, its scope did not report on significant financial performance variations in between providers. The uncertainty regarding the Government’s response remains a concern, prompting our response to the final report of the Aged Care Taskforce. This follows our submission to the ACTF highlighting key considerations on a capital model for the aged care sector.

The new Aged Care Act

The delay in implementing the New Aged Care Act offers providers valuable time to prepare for the impending changes. However, concerns over unreleased parts of the exposure draft of the Bill for the new Aged Care Act (Bill) arise, as they may impact the effective review by providers, the Aged & Community Care Providers Association (ACCPA) and industry lawyers. 

While shifts in care delivery have long been discussed, the Bill focuses on regulatory powers and penalties. Operational challenges, such as worker screenings, intersection with state laws, are expected to cause some delays.

In addition, delays in detailing the Support at Home program impede planning for home care providers, increasing demand pressures and consumer waitlists. 


Several providers are investing in controllable innovations, focusing on supply chain optimisation, process improvement and waste reductions – delivering cost savings for some. Diversification of certain providers by expanding into general practice, childcare and retail offerings, signals a move towards integrated solutions, driving better outcomes for residents and providers. 

Concerns around input controls, such as minimum care minutes stifle innovation and are preventing much needed technology adoption for resident monitoring and care for improvements to be realised. Technologies that replace the need for physical access, benefit residents by reducing disturbances during rest. Providers also worry about the restrictive rules around the new Conditions of Registration for whistleblowers and complaints, and a prescriptive provider-level continuous improvement plan hindering progress.

Sector performance 

Optimism rises, as expectations of improved revenues hold promise of improving financial returns and lender confidence. However, concerns linger over the sector’s uneven performance, prompting calls to optimise providers performance to ensure equitable outcomes for residents and providers alike, while reducing government outlays. 

Escalating building costs, which have nearly doubled since 2018 to a range of $550,000 to $650,000 per bed for building a residential care facility deter investments and development, with some developments deferred until there is more certainty. 

Participants took comfort in the continuation of Refundable Accommodation Deposits (RADs) in the funding mix until the 2030 review, yet with no evident alternative for the $39b capital, providers remain nervous for their long-term investment performance.

The Independent Health and Aged Care Pricing Authority’s role in reviewing subsidies has been praised, yet concerns over the increasing rejection of RAD pricing applications arise. The lengthy and costly application process delays developments, impacting the profitability of providers – particularly in markets with rising house prices. More clarity on the assessment criteria and process is desired.

Additionally, recognising the integration of aged care with health services, providers advocate for streamlining processes and increasing collaboration, ultimately benefiting older Australians.


Organisations are producing and reporting more data due to advanced software and increased compliance requirements by the Department and the Aged Care Quality & Safety Commission. Boards are taking a closer look at this data, prompting more detailed inquiries from executive teams about the source and veracity of the data. This is primarily driven by directors’ efforts to balance personal risk with the strategic needs of the enterprise. In line with this, executive teams devote more time producing data requested by Boards and working with them to increase their understanding of what it means, the implications and how it can be used strategically.

However, this heightened interest is pushing Directors into operational areas, increasing pressure on executive teams to justify information provided. Directors stress the importance of balancing compliance obligations with achieving strategic goals, emphasising the need for clear communication between directors and executives.

The future 

Looking forward, there’s a concern that the ACTF’s terms of reference did not consider a long-term vision for the sector, which would offer strategic direction and opportunities for providers to make lasting investments – something providers would welcome. 

Delays in the Government’s response to the ACTF report and the new Aged Care Act, alongside uncertainty about funding wage increases, heightens concern in the sector. This leads to delays in decision-making amid growing demand, raising concerns that many older Australians may be underserved due to limited provider capacity and insufficient planning and government funding. 

Ultimately, uncertainty over new legislation and funding impedes the significant investments needed to address growing demand, challenging the sector’s confidence in securing financial support.

Looking ahead

Despite challenges, the sector remains optimistic, with providers exploring investments to enhance capacity in residential care and home care services. Yet, concerns linger about the sector’s ability to meet escalating demand, showing the need for concerted efforts to address these ongoing challenges and secure a sustainable future for aged care.

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