Staffing Reforms Trigger Surge in Aged Care Shutdowns

Australia is facing a shortfall of 16,000 nurses and 25,000 allied health workers in the aged care sector by 2033, new research reveals as workforce shortages force a further 16 residential aged care facilities to close. Aged Care Minister Anika Wells said the government had invested $11.3bn for a 15 per cent wage rise for aged care workers which was expected to deliver more than 10,000 workers for the sector in 2023-24.​ A new model created by a coalition of academics from the University of Melbourne, University of the Sunshine Coast and Monash University shows the nation is on track to experience crippling workforce shortages in the aged care sector if the government fails to act. A further 16 aged care facilities have closed between June and October this year with Labor’s stringent nursing reforms placing intense strain on the sector. The shutdowns mean Australia experienced an overall reduction in available aged care places with 505 new places opening while 830 places closed down over the past four months.

The closures come despite escalating demand in the sector as Australia’s population ages, with the Albanese government’s latest intergenerational report projecting life expectancy continuing to increase and placing more demand on government funded services. At least 47 aged care homes have shut their doors since September last year, according to figures from the Department of Health and Aged Care, as the sector grapples with Labor’s staffing reforms including 24/7 mandatory registered nurses and minimum care requirements. Recently, Southern Cross Care NSW & ACT announced it would close its 56 bed Moama residential aged care facility in the southern Riverina of NSW due to staffing challenges, saying Labor’s new reforms were placing “further pressure on providers to maintain their workforces”. Independent aged care expert Paul Sadler blamed the home closures on a combination of financial pressures and workforce shortages starting to bite, as he warned there was a risk further closures would occur.

“About 16 closures across four months is higher than it has been historically … it‘s obviously a pickup in the number of closures and shows financial and workforce pressures starting to bite,” Mr Sadler said. The sector is scrambling to implement a suite of reforms including mandated minutes of care per resident, quality and safety standards, and full-time nursing requirements as it adjusts to a new funding model brought in last October as recommended by the aged care royal commission. The overhaul comes as financial troubles plague the sector, with figures from the Quarterly Financial Snapshot of the Aged Care Sector revealing 66 per cent of private providers are operating at losses, with homes losing an average of $28 per resident each day. The Australian Council of Deans of Health Sciences chair Terry Haines, who commissioned the new model on aged care workforce shortfalls, called on the Albanese government to urgently look at ways of addressing the impending need.

Professor Haines said Australians would receive poor quality care without adequate nursing staff and allied health professionals, and elderly people would be forced into the hospital system for low acuity illnesses that could be treated at home. He said shortages in allied health staff – such as speech pathologists, physios, and occupational therapists had been abandoned by the Albanese government and should be treated with the same urgency that nurses have been. Aged Care Minister Anika Wells said the workforce crisis existed before Labor took office and that aged care workers had been “undervalued and underpaid for too long by the former government”. Ms Wells said the Albanese government had invested a historic $11.3bn for a 15 per cent wage rise for aged care workers which was expected to deliver more than 10,000 workers for the sector in 2023-24. “This is the largest ever pay increase for aged care workers. It signifies real progress towards genuinely valuing their dedication and skill and will help aged care providers attract and retain staff,” Ms Wells said.

Audit firm Grant Thornton’s national head of health and aged care, Darrell Price said the projected shortfall in aged care staff was “unsurprising” pointing to a global shortage of nurses. Mr Price attacked the Albanese government’s staffing reforms as counter-productive, arguing they were placing Australia further behind competitors including Canada and the Britain where red tape is being wound back. “Canada has completely relaxed their immigration rules around targeted professions where they are incentivising nurses into aged care as well as rolling back red tape whereas in Australia, we are increasing regulation,” Mr Price said. “Workers here are required to do far more in terms of monitoring and recording their activities and if you have people who speak English as their second language then understanding what is required is actually a challenge.” The media in September revealed aged care homes were growing the number of beds at only half the average rate of the past five years with a combination of Labor’s staffing reforms and inflation contributing to the declining rates of new beds being added into the market.

Residential facilities in the major cities added just over 1200 beds in the past financial year, which is barely half the average pace of the past five years, undermining the Albanese government’s push to substantially expand the sector in a bid to cope with massive levels of projected demand in years to come. Opposition health and aged care spokeswoman Anne Ruston seized on the closures, warning Labor’s decision to “impose rigid and expedited constraints on the sector is causing serious financial strain”. “Labor promised they would put the care back into aged care, but they are turning a blind eye as aged care providers’ struggle to keep their doors open under stringent new regulations,” Senator Ruston said. “Now we are seeing even more older Australians being forced out of their homes, and still no action has been taken to address the strain that the Government is putting on the sector.” Aged Care Industry Association chief executive Peter Hoppo urged the federal government to engage with the sector on the challenges it is facing recruiting enough staff to meet the mandatory requirements.

The peak body which represents 30 direct members including major ASX-listed companies and also consults with more than 500 facilities across Australia, said Labor should recognise its policy could potentially lead to further closures. “If there is an acknowledgment that a safe, high-quality model of care can be provided with fewer staff, then why isn‘t the government focusing on that, instead of a one-size-fits-all approach to increased staffing levels, which could potentially lead to more nursing home closures?” Mr Hoppo said.

Source: Compiled by APN from media reports

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