The average daily cost for a permanent resident in an aged care home last financial year was $430, the Independent Health and Aged Care Pricing Authority’s Residential Aged Care Cost Collection 2024-25 final report has found.

Average daily costs were found to have increased with care complexity and were largely consistent with direct care time patterns, the report noted, with costs ranging from $354 for Australian National Aged Care Classification Class 2 residents (independently mobile) to $489 for Class 13 residents (not mobile).

But average daily costs differed between geographic locations, size and provider-type, with smaller and rural homes (Modified Monash Model category 6-7) and government-operated services recording an average daily cost of $768 per permanent resident compared to $419 in metropolitan homes (MM1).

The report – which will inform IHACPA’s pricing advice to government and any future development of aged care costing standards and business rules – included data from 199 residential aged care homes and 13,278 participating residents.

The report also noted there was less than 10 per cent variation in the average daily cost between metropolitan homes and small rural towns (MM5), ranging from $419 to $460, respectively.

(IHACPA Residential Aged Care Cost Collection 2024–25 Final Report)

Meanwhile the average daily cost for respite residents was slightly higher than permanent residents, ranging between $381 for Class 101 (independently mobile) to $498 for Class 103 (limited mobility). Respite care is more resource-intensive and variable and IHACPA attributed the higher daily cost to turnover-related admission and discharge activities.

IHACPA also noted that when comparing the report results with official AN-ACC class weights, respite residents incur about 5 per cent higher daily costs than permanent residents and their weighted-average AN-ACC price weights are 16 per cent higher.

This indicates AN-ACC relativities recognise, and may modestly over-recognise, the additional costs associated with respite care, IHACPA noted.

(IHACPA Residential Aged Care Cost Collection 2024–25 Final Report)

Direct care labour formed the bulk of total expenditure – 50 to 60 per cent for permanent residents and 58 per cent for respite residents. This represents a decline for both resident types, with care labour forming 65 per cent and 71 per cent of total bed day costs, respectively, in 2023-24.

Care time rises alongside daily cost

The report found average daily costs increased alongside increasing care complexity and were mostly consistent with direct care time patterns.

The care time ranged from 50 minutes for AN-ACC class 2 to 135 minutes for class 13.

Permanent residents received, on average, 100 minutes of direct care per day and 146 minutes of indirect care minutes, the report noted.

There was no consistent trend in the average daily direct care minutes across MMM categories but averages ranged from 85 minutes in regional centres (MM2) to 114 minutes in small rural towns (MM5).

(IHACPA Residential Aged Care Cost Collection 2024–25 Final Report)

Respite residents received an average of 105 minutes per day – ranging from 65 minutes for Class 101 to 130 minutes for Class 103.

IHACPA also used the report to highlight indirect care as a measurable part of the aged care workload, mainly represented through documentation and care management. It flagged digital maturity as impacting the indirect care workload.

IHACPA noted that its care minute data should not be directly compared to that of the Department of Health, Disability and Ageing as the workforce categories are not aligned. The department’s mandated care minute responsibility only captures care provided by registered nurses, enrolled nurses, assistants in nursing and personal care workers.

IHACPA also included 10 recommendations for improving future cost collections in its report, including:

expand participation and representatives
strengthen care time measurement and analysis
review and refine AN-ACC classes and weights
strengthen data alignment and integration
establish a rolling costing roadmap and strengthen sector capability
refine measurement of indirect care
improve visibility and measurement of allied health services
enhance representation and costing of respite care
optimise overhead allocation methods
maintain transparency and continuous improvement.

The full report can be read here.

IHACPA updates residential pricing framework

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