The Australian aged care sector is experiencing a period of rapid change, with new regulatory reforms, evolving business models and breakneck consolidation in 2014. As we settle into 2015, we can expect to see emerging trends that will be the key focus of aged care players this year.
Growing In Home Care
The collision of health costs and ageing is creating pockets for domestic growth in aged care. Presently, in-home care represents a high growth opportunity in the aged care services market. In Australia, ‘care packages’ are growing at 13% per annum (much higher than residential aged care). The high growth is expected to continue because of the following factors:
- Receiving in home care services is more cost efficient compared to moving to a residential nursing home;
- Many elderly prefer to remain in their homes as much as possible;
- Remote delivery of health services are becoming easier thanks to advances in technology.
Availability of More Products
Rdns.com.au says determining the level of care needed will afford people greater choice and flexibility in the delivery of their services.
More operators are diversifying revenue streams and maximising rates. Many expect that this will encourage people to relocate to aged care facilities earlier than they would prefer, therefore increasing the overall size of the market.
The recent Living Longer, Living Better reforms are also creating more choices for residents that were not available before. Addition of gyms, pools, shops, cinemas, and dining establishments are transforming aged care facilities from traditional hospitals, like nursing homes, to resort like facilities.
There are emerging offshore opportunities for Australian aged care service providers to take their expertise to foreign markets, particularly in China.
Aged care is being touted as an unlikely winner in the historic China-Australia Free Trade Agreement (ChAFTA). Under the agreement, Australian businesses will have unprecedented access to the world’s second largest economy.
The proportion of China’s elderly population will grow much faster than Australia (from 8% currently to 25% by 2050). Social trends in China also underpin growth in aged care, with traditional family based care under threat as younger people move to cities and leave behind their extended families.