Our Position – Regional and remote aged care: reforms to sustain and improve vital services

Access to aged care remains a challenge in regional, rural and remote areas. Despite over a third of older Australians living in these locations, only 21% of residential care services are located in rural, remote or very remote areas (Modified Monash Model (MMM) 4–7).

The level of frailty in these areas is expected to increase at a faster rate compared to metropolitan areas. Older people are unable to get sufficient access to complex wraparound supports to respond to their needs or have to travel long distances to access care. Aged care providers incur significantly higher operating costs in regional, rural and remote areas. Limited access to essential health services and infrastructure further restricts options to expand service offerings or achieve efficiencies through economies of scale.

The funding model, called the Modified Monash Model (MMM), does not accurately reflect the high cost of service provision in some rural and remote areas such as mining towns. These towns face significant isolation challenges, located six or more hours by road from metropolitan centres, making essential health services scarce and more costly. Immediate changes are needed to the categorisation of these communities to ensure older Australians, regardless of where they live, can access safe and high-quality care and providers can continue to operate sustainably.

The residential aged care sector has been operating at a $5 billion operating loss over the last five years. This has deterred investment in capital infrastructure upgrades and technology uplift, particularly in regional, rural and remote locations. Current capital funding by the Government is one eighth of demand in the sector.

With an ageing population and a scarcity of capital investment in the sector due to financial stress, the supply of aged care services will remain constrained in these areas. More investment in capital is needed to expand the availability of aged care services in regional, rural and remote areas.