Sep 07, 2020

COVID-19 drives aged care occupancy rate to 10-year low


As residential aged care occupancy rates fall to 10-year lows, home care providers may struggle to care for more patients with high acuity needs, according to a leading aged care expert.

During COVID-19, thousands of beds in residential aged care have been left empty across Australia as families have decided it’s safer to keep their loved ones at home.

The proportion of available beds that are occupied fell from 90.5 per cent in January 2020 to 89.1 per cent in August, according to a report in The Sydney Morning Herald. Aged care technology organisation, Mirus Australia, provided the data, based on information from Medicare.

The occupancy rate is now the lowest in at least 10 years, the report states, and suggests there are now around 3,000 fewer people living in residential aged care than there were at the start of the year.

The figures are likely to be even lower in rural and remote areas, where occupancy rates have historically lagged those in regional and metropolitan areas.

Tide is turning

But Grant Corderoy, partner with aged care accountancy specialists, StewartBrown, told HelloCare the tide is starting to turn and occupancy rates are starting to trend higher again. 

He expects occupancy rates will return to pre-COVID levels within three months, all going well with the sector’s battle with the virus.

“Pent up demand” that built up during COVID-19 is now beginning to unwind, with families and residents now making the call that it’s safe to return to residential aged care.

Occupancy rates in New South Wales and Tasmania have been the strongest to rebound, Mr Corderoy said, but added that Victoria is a different situation.

Historically, following outbreaks of infectious disease, occupancy has taken a dip, but it has always bounced back, Mr Corderoy said, citing the 2017 influenza season as an example.

Mr Corderoy said there has been a gradual drift lower in occupancy rates in recent years that has accelerated during the pandemic.

Negative publicity about aged care during the Royal Commission into Aged Care Quality and Safety has affected occupancy, and limited investment in refurbishment and building new homes has also limited the sector’s appeal in some areas.

The pandemic has compounded fears about residential aged care, accelerating the decline in the occupancy rate.

Lower occupancy compounds financial pressure

Lower occupancy will add to the financial pressure on aged care providers because it means they are receiving less revenue.

The latest research from StewartBrown shows 60 per cent of aged care homes recorded an operating loss for the nine months to 31 March 2020. The research noted many providers are “struggling to remain viable”.

Mr Corderoy said he’d “like to think” aged care providers are not cutting back on staff due to the lower occupancy rates, but he said they might be hiring “lower levels” of the same staff, for example, hiring a less qualified registered nurses than they might otherwise have, to help make ends meet.

Providers are “under pressure” to ensure care standards don’t fall, he said.

Home care may struggle with added burden

Lower occupancy rates in residential aged care are likely to mean a greater burden is placed on home care services as they cater to clients with higher acuity needs, Mr Corderoy said.

Home care services are “less mature” than residential aged care services. “They are not as sophisticated as residential aged care providers in the way they deliver care,” he said.

“This is the next area that needs to be looked at… I think home care has looming issues,” Mr Corderoy said.

Image: Wavebreakmedia, iStock.

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