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Catholic Health sounds alarm on nursing homes' cash crisis

Nursing homes are facing the prospect of having to cut back on services and lower standards because government subsidies are failing to keep up with the cost of running the institutions, according to Catholic Health Australia CEO Francis Sullivan.

"It means the industry may not be able to deliver the standard the community expects and that the elderly deserve in future," he said.

Nursing homes fear they will be forced to replace nurses with less-qualified staff, skimp on quality food and furnishings, and rob their capital building funds to cover day-to-day operations.

New figures show the cost of running a nursing home has outstripped the growth in government subsidies by at least 6 per cent over six years.

Because residents' fees are capped by law, homes say they have no choice but to cover that gap by cutting services and lowering standards.

In a letter to a review of pricing in aged care, chaired by economics Professor Warren Hogan, Mr Sullivan called for an immediate injection of funds to cover the shortfall, as well as higher indexation in future.

According to his data, the cost of running aged care homes has jumped 15.5% since 1997 - with three-quarters of the rise caused by increases in nurses' wages.

But government subsidies - which range from $34 to $116 a resident per day - grew by only 9.3% in the same period.

The Australian

Catholic Health Australia

14 Jul 2003