The Estia Health Ltd (ASX: EHE), Japara Healthcare Ltd (ASX: JHC), and Regis Healthcare Ltd (ASX: REG) share prices are mixed today after the Australian government's Royal Commission into Aged Care Quality and Safety delivered its final report.
Estia shares closed 7 cents lower to finish a $2.07. Japara closed the day 4.77% higher to finish at 81 cents per share. Regis shares closed 0.25% higher to end the day at $1.98.
All 3 ASX shares experienced a fall in the half-hour before closing – while the Prime Minister was speaking on the report.
Key points and recommendations
The two commissioners have come up with separate recommendations in some instances.
- The Aged Care Act 1997 should be repealed and replaced with a new Act to come into force by no later than 1 July 2023.
- Both Commissioners Pagone and Briggs agree the Aged Care Quality and Safety Commission (ACQSC) should be abolished and replaced. As well, both agree a new pricing authority should be established to oversee aged care.
- New minimum requirements to be implemented for staffing – including a Certificate III qualification and English requirements.
- The award wage for aged care employees should be increased, and 60% of the yearly percentage increase to the award wage should be subsidised by the government.
- One registered nurse (RN) should be on-site at all times by 1 July 2024 and all residents should be able to see the RN for a minimum of 44 minutes each day on average. 30% of the yearly percentage increase for the RN's minimum wage should be subsidised by the government.
- The Basic Daily Fee should immediately increase by $10 per day per resident.
- Aged care providers finances should come under the oversight of the Australian Prudential Regulatory Authority.
- Commissioner Briggs recommends refundable deposits be abolished by 2025 and replaced with user-fee, means tested system subject to the pricing authority.
Response from the government
In a statement released to the press today, Prime Minister Scott Morrison and Health Minister Greg Hunt stated:
I called this royal commission to ensure our oldest and most frail Australians could receive the respect and care that supports their dignity and recognises the contribution that they have made to society.
Today the Australian government is continuing to drive reforms with additional funding of $452.2m to address immediate priorities in the sector.
These immediate steps will drive improved quality of care by strengthening aged care provider governance, and improved oversight of home care which will ensure senior Australians and taxpayers are getting value for money.
It will provide additional financial assistance for residential care providers so they can improve care, whilst building the much-needed workforce of the future to support Australians who want to age in their own homes.
The government did not indicate how many and which of the recommendations it would follow.
How did Estia, Japara and Regis respond?
In Volume 2 of the report, Commissioners Casey and Briggs singled out an assault that occurred at Japara's Mitcham facility. The Commissioners noted the Mitcham facility as "an organisation that was determined to avoid accountability for its actions."
In a media statement released today, Estia Health CEO Ian Thorley responded to the report:
The Commission has been a thorough and valuable process and we believe, as a result, the entire sector will be better positioned to provide a sustainable aged care system that meets the needs of older Australians in the future.
As the report has just been released, we will take some time to review it in its entirety and we will respond more fully once we have completed our review.
Regis provided the following statement to Motley Fool Australia after initial publication:
Regis welcomes the release of the Final Report of the Royal Commission into Aged Care Quality and Safety today and importantly its recommendations for the future of aged care in Australia.
Regis supported the Royal Commission with the contribution of ten submissions.
Putting older people at the centre of the system will drive the urgent changes required. Regis looks forward to working with consumers, Government and stakeholders on reforming the sector for the betterment of all older people and their families.
Regis has a 30 year history of providing a high standard of care and services for our residents and clients, as well as strong supports for our workforce.
Japara did not respond to Motley Fool Australia's request for comment before publication.
ASX aged care share price snapshots
While today's results are lukewarm at best for Estia, Japara, and Regis, the shares are still trending higher overall.
As the COVID-19 pandemic was in its early stages, the Estia, Japara, and Regis share prices took a battering. Since then, Estia and Regis shares have exceeded their pre-pandemic prices. The exception being Japara, which is currently 9 cents lower than this time last year.
Editor's note: this article was updated on 2 March 2021 to include a response from Regis, which was supplied to Motley Fool Australia after initial publication.
