23rd February 2024

Financial Resilience in Aged Care



Anchor Excellence

A Roadmap to Sustainable Excellence

Financial sustainability in the aged care sector is a critical aspect that directly impacts the quality of care provided to our senior Australians. Over the past two years, discussions surrounding this topic have intensified, with a particular focus on the gap between funding and the actual cost of care.

As the Draft Aged Care Reform Act undergoes its final consultation period and the Aged Care Task Force report is reviewed by the Federal Government, aged care providers are facing a pivotal moment. With changes in funding, compliance requirements, and the ongoing challenge of attracting and retaining talent amidst inflationary pressures, organisations are urged to conduct a thorough financial health check.

A comprehensive financial health check in the aged care sector should encompass various key areas to ensure sustainability and operational efficiency. Evaluating short-term and long-term financial goals, benchmarking performance against industry standards, and aligning financial strategies with organisational objectives are crucial steps in this process. Additionally, assessing talent management, staying abreast of regulatory reforms, and reviewing the finance function’s support and collaboration with operations and care teams are essential components of a successful financial health check. 

One of the critical aspects to consider during a financial health check is the evaluation of management reporting. Understanding the performance at entity, home, and functional levels provides a comprehensive snapshot that aids in making informed decisions. This detailed insight enables organisations to identify areas for improvement and make strategic adjustments to enhance financial stability. 

The review of the finance function plays a critical role in ensuring effective financial decision-making and building financial capability across the organisation. By partnering with operations and care teams, the finance function can translate financial information into actionable insights that support strategic and operational goals. This collaborative approach fosters financial literacy and empowers staff to comprehend the financial impact of their decisions, ultimately driving sustainable growth and quality care provision.

In light of the changing landscape and potential positive shifts in funding, aged care providers are encouraged to proactively engage in financial health checks to optimise their resources and prepare for upcoming changes. 

A financial health check if adopted, not just as a reactive measure but a proactive strategy, can enable a clever way to identify areas for improvement, enhance performance, and maintain long-term sustainability. It can serve as a valuable tool for organisations to understand their financial levers, make informed decisions, and adapt to the evolving landscape of aged care.

For aged care providers looking to enhance their financial performance and prepare for the future, engaging in a comprehensive financial health check is a strategic step towards achieving operational excellence and sustainability. 

Remember, the financial health of your organisation is not just about numbers; it is about ensuring the well-being and quality of life for our senior Australians. 

Let’s work together to secure a financially sustainable future for aged care and continue to provide the care and support our seniors deserve. We would love to hear from you and be able to help you – Contact us today, or reach out to our CFO Payal Kapoor today for a completely obligatory free discussion!