Al-`Aqar Healthcare REIT Annual Report 2020

Strategic Performance 51 Market Report Summary (ii) Resident may have to pay more for residential accommodation. Aged care in Australia is currently a hybrid system, with the federal government partly covering the costs of residential care accommodation for elderly and disabled citizens who pass a series of mean-based eligibility tests via what is known as the Aged CareFunding Instrument (ACFI).With thenumber of citizens in aged care expected to grow exponentially in coming decades, the federal government will find it increasingly difficult to fund the current level of care it provides, meaning more market-based approaches will be needed. In other words, wealthy Australians with significant assets such as highly valued houses will be expected to pay higher out-of-pocket fees for aged care accommodation, in order to subsidise those who have little or no assets and therefore little means to fund their own care. Given the budgetary pressures governments across the country face, it’s not unrealistic that one day aged care will be an entirely fee-for-service sector for all but the poorest Australians. (iii) Residents will demand greater lifestyle amenities. As baby boomers ease into their retirement years in large numbers and begin utilising residential aged care accommodation, many will demand greater lifestyle amenities not typically associated with this sector. With the baby boomer generation typically asset-rich, they’ll both expect and be able to fund a standard of living not dissimilar to their younger, independent years. (iv) Technology will play a greater role in providing care. From powerful comparison websites which allow the public to read reviews of individual facilities and compare their fees, to more ambitious possibilities including smartwatch-style monitoring devices and even robotic assistants who can follow nurses around facilities as they tend to residents; technology can enable administrative tasks to be completed more efficiently, freeing up quality time to tend to residents social and emotional needs. Success will require providers to be agile and remain vigilant to COVID-19 - supporting aged care residents, families and staff - while simultaneously adjusting operating models and response strategies. (Extracted from Aged Care Royal Commission Interim Report, PWC Aged care beyond COVID-19: keeping ahead of the curve report July 2020, The Age July 2020 & Japara Future Trends in Australian Aged Care) The budgetary pressures governments across the country face, it’s not unrealistic that one day aged care will be an entirely fee-for-service sector for all but the poorest Australians Technology can enable administrative tasks to be completed more efficiently, freeing up quality time to tend to residents social and emotional needs