Benchmarking Financial Performance Big Numbers! The 2017 Survey - PowerPoint PPT Presentation

Benchmarking Financial Performance – Big Numbers!

The 2017 Survey The 2017 ACFPS has been the largest so far and continues to grow in participation and coverage  Data collected from over 957 Facilities  Represents more than 38% of Sector  Data from more than 20,000 HC Packages  Represents over 30% of Home Care Sector  Largest known survey of its kind in any industry sector in Australia

Residential Care

Results for the Year ‐ Survey Average Metric 2017 2016 Difference $10.78  Care Result Per bed day $9.42 $1.36 + $0.97  Accommodation Per bed day $(0.05) $1.02 Result = $11.75  Facility Result Per bed day $9.37 $2.38 $4,082  Per bed per $3,236 $846 annum $8,941  Facility EBITDA Per bed per $8,397 $544 annum

Results for the Year ‐ Top Quartile 2017 2016 Difference  Care Result Per bed day $37.96 $38.41 $0.45 + Accommodation Per bed day $(0.72) $(0.40) $0.32  Result =  Facility Result Per bed day $37.25 $38.02 $0.77 Per bed per $13,102 $13,483 $381  annum  Facility EBITDA Per bed per $18,285 $18,121 $164 annum

Average Care Result ‐ Trends SURVEY AVERAGE CARE RESULT DOLLARS PER BED PER DAY $14 $12.00 $12 $10.78 $10.66 $9.84 $9.42 $10 $8.47 $8 $6.79 $6 $5.07 $5.10 $4.74 ACFI subsidy $4 rate freeze $1.48 $2 $‐ Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17

Revenue v Expenses Cumulative increase in ACFI + supplements and Care costs (Base Year 2007) 100% 86.8% 90% 80% CUMULATIVE INCREASE 83.0% 70% 60% 50% 40% 26.2% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ACFI & Supplements (including MTCF) Expenditure ‐ care services CPI

Occupancy by Quartile Occupancy ‐ Top to Bottom 98% 97% 96.9% 96% 96.4% 96.2% 95.8% 95.7% 95.5% 95% 95.3% 95.0% 94.9% 94.6% 94% 94.3% 94.1% 93.7% 93% 93.5% 92% 92.0% 91% 91.3% 90% 89% 88% 1st quartile 2nd 3rd 4th Survey Top 50% Bottom Bottom quartile quartile quartile Average 50% 75% 2016 2017

Comparison of Survey Average and Top Quartile CARE RESULT DOLLARS PER BED PER DAY $60 $38.68 $38.42 $37.96 $50 $35.29 $33.23 $35.24 $36.19 $40 $26.39 ACFI $30 Subsidy Rate Freeze $20 $12.00 $10.78 $10.66 $9.84 $9.42 $8.47 $10 $6.79 $5.10 $‐ Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17 Care result ‐ average Care result ‐ top quartile

RACF Summary Survey Average vs Top Quartile Top Quartile Top Quartile Survey Average Survey Average Average Average 2017 2016 2017 2016 Revenue ‐ Care 221.73 214.55 223.30 214.95 Expenditure Direct care costs 130.71 125.78 111.70 105.83 Total expenditure 212.31 203.77 185.34 176.53 Care result for the year $9.42 $10.78 $37.96 $38.42 Accommodation result $(0.05) $0.97 $(0.72) $(0.40) Facility Result $9.37 $11.75 $ 37.25 $38.02 Facility EBITDA per bed per annum $8,397 $8,941 $18,285 $18,121 KPIs Occupancy 94.6% 94.9% 96.4% 96.9% Care costs as % of care income 59.0% 58.6% 50.0% 49.2% Average bond/RAD held $279,513 $252,319 $291,179 $259,177 Average RAD taken during year $320,254 $298,627 $352,619 $311,888

RACF Summary Top Quartile vs the rest Top 25% Bottom 75% Bottom 50% Bottom 25% Average Average Average Average 2017 2017 2017 2017 Revenue ‐ Care 220.43 218.36 223.30 221.25 Expenditure Direct care costs 111.70 136.43 141.67 147.52 Total expenditure 185.34 220.41 228.14 237.37 Care result for the year $37.96 $0.84 $(7.71) $(19.01) Accommodation result $(0.72) $0.15 $0.49 $0.69 Facility Result $37.25 $0.99 $(7.22) $(18.32) Facility EBITDA per bed per annum $18,285 $5,495 $2,749 $(1,029) KPIs Occupancy 96.37% 94.13% 93.51% 91.95% Care costs as % of care income 50.02% 61.66% 64.27% 67.56% Average bond/RAD held $291,179 $203,351 $158,096 $267,187 Average RAD taken during year $352,619 $219,256 $166,646 $308,266

Breakdown of Care Result Average Top Quartile Difference Care income 221.73 223.30 (1.58) Care services costs 130.71 111.70 19.01 Hotel services 39.96 37.10 2.87 Utilities 6.21 5.91 0.31 Administration and support services 35.42 30.64 4.78 CARE RESULT ($ per bed day) $9.42 $37.96 $28.54 Average Top Quartile Difference Occupancy 94.6% 96.4% 1.7% Supported resident ratio 45.4% 43.0% (2.3%)

Key Messages ‐ strong financial performance  Building design efficiency  Good quality management ‐ set targets, KPI’s, forecasting  Benchmark performance ‐ dollars & hours  Maximising income in line with resident’s care needs (ACFI);  Staff numbers and skill mix aligned to the funding levels and facility design (roster management & operational efficiency);  Maximising accommodation prices;  Maintaining occupancy levels; and  Significant refurbishment ‐ operational efficiency and higher RAD price

ACFI ‐ Further Analysis

Changing nature of Residential Care Proportion of facilities in each Band 100% 9% 15% 90% • Fewer facilities in 13% 80% “low‐care” bands 18% 70% 25% • More facilities in 60% Bands 1 and 2 28% 50% • 2016 data has 40% 29% been restated 30% 23% using 2017 Bands 20% 24% 10% 16% 0% 2017 2016 Band 1 Band 2 Band 3 Band 4 Band 5

Average ACFI Subsidy by Band $195.55 $194.98 $220 $177.54 • 2016 data restated $175.43 $200 $169.74 for 2017 bands $165.42 $164.00 $162.11 • Adjusted for COPE $180 $150.54 $148.02 (real terms) $160 • Decrease in real $125.98 terms of $125.12 approximately 1% $140 in each band • Increase across $120 survey due to higher acuities $100 Band 1 Band 2 Band 3 Band 4 Band 5 Average June 2017 June 2016

Looking Forward We calculated the projected facility results for FY18 in doing so we: • Adjusted for ACFI reductions and Rate Freeze • Adjusted for Resident fee increases • Adjusted for Wage increases of 2.5% • Adjusted for other expenditure increases

Projected results ‐ Facility Results June 2017 and Possible effects of ACFI freeze and expenditure increases $41.04 $42.51 $45 $39.37 $38.62 $37.25 $35.48 $40 $34.12 $34.16 $31.97 $31.08 $35 $29.12 $24.87 $30 $25 $20 $10.85 $10.26 $15 $9.37 $8.31 $7.83 $7.68 $10 $4.05 $2.43 $2.30 $2.18 $0.77 $0.49 $5 ‐ Band 1 Band 2 Band 3 Band 4 Band 5 All Facilities June 2017 Survey Average June 2017 Top Quartile Forecast Survey Average Forecast Top Quartile

Basic Daily Fee and costs of Everyday Living

Cumulative increases in Resident fees and Everyday living expenses 80% 71.3% 70% 60% 54.5% Cumulative increase 50% 40% 26.2% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Resident income ‐ care (excluding MTCF) Total hotel, utilities and admin costs CPI

Revenue Gap ‐ Everyday Living Costs $85 $65 $35.42 $34.04 $33.32 $29.48 $28.35 $27.19 $24.79 $25.24 $45 $25.20 $6.21 $5.93 $20.96 $6.20 $19.11 $6.33 $6.23 $5.36 $4.95 $4.32 $3.65 $3.26 $3.11 $25 $49.09 $48.25 $47.49 $46.50 $44.54 $41.71 $40.25 $38.65 $33.41 $32.05 $31.52 $5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $(16.10) ‐$15 $(18.88) $(20.59) $(20.97) $(22.74) $(23.79) $(23.95) $(24.15) $(29.06) $(29.74) $(32.51) ‐$35 Basic Daily Fee Hotel services Utilities Administration Revenue gap

Outsourcing vs In‐House 100% 90% 39% 80% 68% 64% 70% Contract 60% 50% 40% In‐House 61% 30% 36% 32% 20% 10% 0% Catering Cleaning Laundry

Costs of Utilities Cumulative increase in utilities since 2007 250% Rates, 209.5% 200% Total utilities , 100.0% 150% Rubbish removal, 104.6% 100% Electricity, 87.6% 50% Gas, 48.7% 0% Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Jun‐12 Jun‐13 Jun‐14 Jun‐15 Jun‐16 Jun‐17 ‐50% Electricity Gas Rates Rubbish removal Total utilities

Average Refundable Deposits Received Average RAD taken during financial years 2016 and 2017 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 National ACT NSW QLD SA TAS VIC WA average 2016 408,504 320,189 240,570 288,827 232,289 332,784 279,719 298,627 2017 392,235 332,006 267,694 308,497 243,966 371,712 323,405 320,254 2016 2017

Average RAD taken in FY17 vs published Accommodation Prices by state $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 National ACT NSW QLD SA TAS VIC WA Minimum Published Accommodation Price Median Published Accommodation Price Average RAD Taken Maximum Published Accommodation Price

Median state facility RADs compared to median capital city house price Hobart 88.67% Canberra 87.65% Brisbane 68.80% Adelaide 73.86% Perth 67.31% Melbourne 58.13% Sydney 38.48% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

RAD/DAP/Combination splits 23.8% 24% 25.5% 26% 27% PERCENTAGE SPLIT 14.3% 19.6% 35% 33% 33% 61.9% 54.9% 41% 40% 41% Listed provider Listed provider ACFPS average ACFPS average ACFA report average average Jun‐17 Jun‐16 Jun‐17 Jun‐16 Jun‐16 RADs/RACs DAPs/DACs Combination