Aged care in Australia is a $13.2 billion industry, which is set for steady growth in the coming years. It is expected that the population of the country will be 39.4 million by 2055 and the number of Australians over the age of 65 will grow from its current level to 8.5 million. The existing 2,700 aged care facilities in the country cater to only 170,000 residents. Colliers International, a prominent real estate company, estimates that by 2022 an additional 69,000 aged care places will be required.
Over the years the expectations of residents at aged care facilities has changed. Earlier, the average age of residents was lower and they had a reasonably active lifestyle. With increased longevity, the proportion of people who require high-care facilities has increased. It is expected that this trend will continue and the demand for aged care homes that can cater to high-care needs of the residents will increase.
Additionally, it has been estimated that about half of aged care residents suffer from dementia. This places even more stress on the infrastructure of the facility and on its nursing staff. Residents affected with this malady require special care and need to be housed and cared for in a manner that they do not harm themselves. The number of older people with dementia is currently about 220,000 and it is estimated that this figure will reach 730,000 by 2050. Hence, aged care facilities will need to greatly enhance their capabilities in this area.
An aged care facility is only as good as its staff and it is essential that they have an adequate number of registered nurses and other suitably trained personnel to take care of the high-care needs of residents. The infrastructure at the facilities will also need to address the specific needs of people afflicted with dementia.
The growth in the aged care industry will lead to some extent of consolidation as operators look for acquisition opportunities in an effort to achieve economies of scale. Larger operators have the advantage of being able to achieve higher occupancy rates, make greater investments in technology and lower procurement costs.
Companies running multiple aged care facilities can also implement more efficient administration systems and have standardised recruitment and staffing policies which permit them to provide a consistent and high level of care.
In addition to consolidation led by the larger players, another trend that will emerge is the separation of aged care and retirement villages. While the two branches of the industry are similar in many ways there are also several basic differences and many operators prefer to specialise and focus in one area.
In the years to come the aged care industry will continue to grow. But operators will need to adopt a flexible approach and cater to the changing needs of the market if they are to survive and grow.