Impact of COVID on RADs to cost aged care operators $80K per bed: Health Metrics data

The aged care software solution provider has looked at the numbers for us – and the next six to nine months will be ‘crunch time’. Health Metrics took around 10,000 beds from their clients and looked at their data from 1 March to 9 August. What they found was that the impact of COVID on residential aged care where RADs apply is costing operators about $80,000 per bed. CEO and founder Steven Strange says the result indicate if a provider has 1,000 beds on their books, 92% occupancy (which is higher than the industry average of 89%) and a 50/50 RAD/DAP position (which is predominant across the industry), then the predicted fall in the cash value of their RADS will amount to around $37 million. This figure depends on a number of factors including occupancy, average length of stay and acuity on admission, but Steven forecasts this 1,000-bed provider would start to feel the pinch in the next six to nine months. Some operators will be able to weather the storm – but for others, particularly those that are highly geared, it could mean a halt to their development pipeline, breaking a banking covenant or insolvency. Steven also points out that this same period has seen a bigger fall in occupancy levels – already on a downhill slope – especially in Victoria, which will worsen the hit. As we reported on Wednesday, the Department of Health has commissioned accounting firm StewartBrown to investigate RAD outflows and the associated risks. The question is: will its findings come too late for some?