Learnings from the Leading Age Services Australia state conference
21 March 2018
I attended the Leading Age Services Australia (LASA) Queensland State Conference at The Star, Gold Coast last week. LASA is the national peak body representing and supporting providers of age services across residential care, home care and retirement living.
LASA welcomed more than 350 delegates over the three-day conference, which was themed ‘Disrupt, Thrive and Innovate’, at a time of significant change and challenges across the industry. BDO had a good representation and the event was a great networking opportunity for all involved.
Of particular interest was Stuart Hutcheon’s (Partner, Stewart Brown) presentation ‘Financial Innovation in Aged Care – The importance of planning for financial viability with greater consumer choice’.
Stuart presented the results of a recent industry survey, which provided some interesting insights into the aged care industry. He highlighted the following factors which deteriorated over the six months to December 2017:
|Average EBT per resident per annum
|Average cost ratio
Reasons cited were predominately the freeze on co-payments, and notwithstanding the above occupancy numbers, a further decline in resident numbers due to increased waiting lists for home care packages.
Stuart suggested operators use the results to benchmark a number of key financial indicators against industry averages, such as EBITDA per resident per annum, occupancy levels, average ACFI and care staff wages as a percentage of ACFI.
Stuart also provided some great tips for operators to improve their ongoing financial performance, such as:
- Critically assess build design efficiency
- Engage in good quality management by setting targets, KPIs and re-forecasting budgets
- Benchmark performance against underlying results for industry averages as well as the top 25% in dollars and hours
- Maximise (where possible) income in line with residents’ care needs (ACFI)
- Align staff numbers and skill mix to the funding levels and facility design (roster management and operational efficiency)
- Maximise accommodation prices whenever possible
- Maintain occupancy levels (and be aware of breakeven levels)
- Consider significant refurbishment for operational efficiency, higher income and higher RADs
- Undertake financial forecasting versus budgets and model the future.
It will be interesting to see how this industry continues to evolve.