Aged Care Pricing Commissioner: Annual Report 2017/18 released

The 2017/18 Annual Report of the Aged Care Pricing Commissioner has just been released and provides information on trends over the past five years as well reporting on the 2017-18 financial year.


31 Oct 2018

 

In the past financial year the Commissioner received 539 applications, an increase of 85% on the previous year, and approved 386. This included 220 applications for the renewal of lapsing approvals made on or before 1 July 2014, as approvals are valid for a four year period.
 

Of interest are the Approved Price Range of Rooms over the Five Years

The five year period (2013/14 to 2017/18) shows the total percentages of rooms approved for the following price ranges:

$550,001 to under $700,000: 37.09%

$700,000 to under $850,000: 36.42%

$850,000 to under $1,000,000: 17.84%

$1,000,000 to under $1,250,000: 5.07%

$1,250,000 to under $1,500,000: 1.76%

$1,500,000 and above: 1.82%

 

The report is available here

 

Commissioner’s Overview

2017/18 in Review and Trends over the Last Five Years

This year marks the fifth year of operation of the ACPC and it is timely to review trends over the last five years as well as report on our performance during the 2017/18 year. As stakeholders engaged in the Aged Care Sector would know the main statutory functions of the ACPC are to:

  1. review and approve proposed accommodation payments that are higher than the maximum amount of $550,000 as determined by the Minister; and

  2. review and approve applications for Extra Service fees.

One main area of activity this year has been the Renewal Applications for approvals for accommodation prices above $550,000 that were made on or before 1 July 2014. These approvals were valid for four years, so they would have lapsed on 1 July 2018 unless renewed. The renewal of lapsing approvals can take one of two courses namely:

  • a short form Renewal Application for a previously approved price, where there is no increase in price sought (other than allowable indexation); or

  • a New Application where an increase in price is sought.

The new short Renewal Application form sought from Providers information regarding contemporary photographs of the facility, Refundable Accommodation Deposit (RAD) history over the preceding 12 months, evidence of current value of the facility and any other information that Providers wished to submit in support of their Renewal Application.

Over 2017/18, the ACPC received 539 Applications, an increase of 85.22 % on 2016-17 when there were 291 Applications. Of the 539 Applications, 220 of these were Renewal Applications. The Renewal Applications were from 42 Providers, covering 66 Facilities and in respect of 2,978 rooms.


Applications Received by the ACPC over the Last Five Years

Over the last five years the ACPC has received the following number of Applications (including Renewal Applications):

446 in 2013/14;

244 in 2014/15;

216 in 2015/16;

291 in 2016/17; and

539 (including 220 Renewals and 319 Applications) in 2017/18.

 

Residential Aged Care Approved Providers Nationally to 30 June 2017

The number of Residential Aged Care Providers nationally over the last five years is as follows:

1,034 as at 30 June 2013;

1,016 as at 30 June 2014;

972 as at 30 June 2015;

949 as at 30 June 2016; and

902 as at 30 June 2017.

This steady decline of over 130 Providers over five years shows a continuing consolidation and rationalisation of Residential Aged Care Providers and this is a trend that is expected to continue over the next few years with tightening margins and financial pressures.

 

Residential Aged Care Providers Applying to the ACPC since 2013

Since 2013/14 we have seen the following number of Residential Aged Care Providers applying to the ACPC:

81 in 2013/14;

47 in 2014/15;

49 in 2015/16;

66 in 2016/17; and

104 in 2017/18.

Over the last five years the ACPC has received applications from 170 Residential Aged Care Providers representing 18.85% of all Residential Aged Care Providers.


Residential Aged Care Facilities Approved Nationally to 30 June 2017

Over the last five years the numbers of nationally approved Residential Aged Care Facilities were as follows:

2,720 as at 30 June 2013;

2,688 as at 30 June 2014;

2,681 as at 30 June 2015;

2,669 as at 30 June 2016; and

2,672 as at 30 June 2017.

As can be seen the number of Residential Aged Care Facilities nationally has remained fairly constant certainly over the last four years.


Number of Residential Aged Care Facilities Approved by the ACPC since 30 June 2014

The number of Residential Aged Care Facilities approved by the ACPC over the last four years is as follows:

108 as at 30 June 2014;

71 as at 30 June 2015;

73 as at 30 June 2016; and

102 as at 30 June 2017; and

135 as at 30 June 2018.

So we have seen an almost doubling in the number of Facilities approved by the ACPC since 30 June 2015.


Residential Aged Care Places/Rooms Approved Nationally since 30 June 2013

The number of Residential Aged Care Places/ Rooms approved nationally since 30 June 2013 is as follows:

186,278 as at 30 June 2013;

189,280 as at 30 June 2014;

192,370 as at 30 June 2015;

195,825 as at 30 June 2016; and

200,689 as at 30 June 2017.

As the figures above indicate, the number of places continues to grow fairly steadily over the last five years.

 

Residential Aged Care Places/Rooms Approved by the ACPC since 30 June 2014

The ACPC has since 30 June 2014 approved applications in relation to the following number of places/rooms:

5,690 as at 30 June 2014;

3,001 as at 30 June 2015;

4,142 as at 30 June 2016;

7,205 as at 30 June 2017; and

7,705 as at June 2018.

The ACPC has seen an increase of over 4,700 rooms approved since 30 June 2015. This increase is in part due to new and refurbished rooms coming into the Aged Care Sector.


Existing v New and Refurbished Residential Aged Care Facilities Approved by ACPC

The number of Existing Residential Aged Care Facilities approved by the ACPC from 30 June 2014 is as follows:

102 as at 30 June 2014;

57 as at 30 June 2015;

46 as at 30 June 2016;

63 as at 30 June 2017; and

86 as at 30 June 2018.

 

The number of New or Refurbished Residential Aged Care Facilities approved by the ACPC over the same period is as follows:

16 as at 30 June 2014;

14 as at 30 June 2015;

29 as at 30 July 2016;

44 as at 30 June 2017; and

50 as at 30 June 2018.
 

So whilst the number of New and Refurbished Facilities approved by the ACPC has continued to increase, the rate of increase is tapering off, perhaps reflecting the financial pressures being experienced by the Aged Care Sector.

As recent research reveals, including reports by ACFA and StewartBrown, the level of investment in New and Refurbished Residential Aged Care Facilities will need to increase dramatically in order to not only replace existing old stock but to meet future expected demand with the baby boomer generation coming on line.


Reframed and Withdrawn Applications

The office of the ACPC continues to work closely with Providers to ensure that applications stand the best chance of being approved. This educative role has meant that no Applications were actually rejected; rather Applications were revised, reframed or withdrawn on the basis after close consultation with my office that they would have been rejected in their original form. Actual rejections are of no benefit to anyone in the Aged Care Sector and the results shown below would tend to indicate an increasing level of knowledge and understanding of what is required to have a successful application that is ultimately approved by the ACPC.

The number of withdrawn Applications over the last five years is:

9 in 2013/14;

38 in 2014/15;

13 in 2015/16;

8 in 2016/17; and

12 in 2017/18.

The number of reframed Applications over the last five years is:

2 in 2013/14;

36 in 2014/15;

25 in 2015/16;

20 in 2016/17; and

41 in 2017/18.

 

Turnaround Times for Applications and Renewals

Over the last five years we have seen approval times in working days from the receipt of Applications to Approval present as follows:

22 Days for 337 Applications In 2013/14;

17 Days for 246 Applications In 2014/15;

18 Days for 196 Applications in 2015/16;

17 Days for 290 Applications in 2016/17; and

31 Days for 386 Applications and Renewals in 2017/18.

The approval times above are all well within the 60 day period and reflects in 2017/18 an 85% increase in Applications/Renewals and a large increase in workload for Assessors within the office of the ACPC with no real change in the level of resources and some lessening of support and disruption with the departure of the Director during the 2017/18 year.

 

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