7 More about other groups of providers Considers factors contributing to or associated with groups of providers: government regional influences recipients of viability supplement impact of supported resident remote Aboriginal and Torres Strait Islander (ATSI) and Services (MPS) providers 8 Recent changes on financial performance Outlines the funding and financing changes since 2013 that are expected to have an impact on future operating financial performance 9 Providers’ expansion plans Analyses the feedback from survey respondents on their future plans 10 Earnings lost on surplus liquidity Provides an overview of the impact on OEBITDA of relatively high liquidity attributable to lump sum accommodation liabilities held in liquid investments Appendix 1 Details of the quantitative analysis Details the basis of and limitations to our quantitative analysis Appendix 2 Details of the qualitative analysis Background on how the qualitative survey was developed and administered, including an analysis of the participants Appendix 3 Results of the multivariate analysis Provides background on the analysis and findings Appendix 4 Qualitative survey Contains a complete list of survey questions and an analysis of the responses Limitations of Our Analysis The quantitative analysis relies extensively on data held by DSS. This data includes:  de-identified GPFR data provided by approved providers  service-level information pertaining to location, ownership and care  subsidy-related information  information about approved places being allocated and brought online. Our quantitative analysis is on a single year’s data. We examined the consistency of providers’ quartile performance using EBITDA and OEBITDA. While financial performance measured by OEBITDA results in greater consistency of ranking, providers’ financial performance rankings do change over time. Providers with better financial performance tend to exhibit more consistency relative to providers with lower financial performance as measured by OEBITDA. ACFA recently completed a detailed review of financial data that DSS had collected through GPFRs. Among other things, ACFA noted the limited quality and usability of the GPFR data. As our quantitative analysis was primarily based on this GPFR data, our work is also constrained by the limitations of this data. Throughout this report we have
To provide insight into causes of the OEBITDA gap, we examined the management of operating revenue, and the operating expenses of the Group 4 providers compared to the better financially performing providers. Operating Revenue Management We have examined the effects of the following in respect of operating revenue management: operating revenue prpa government revenue comprising care subsidies (mainly ACFI) and accommodation supplements resident income comprising of income-tested resident-contributed care fees and accommodation charges, including bond retentions and deemed (notional) accommodation bonds. Operating revenue prpa 087 shows the varying capacity of providers in Group 4 to generate operating revenues by ownership. As differences in revenue would mostly result in similar differences in OEBITDA, the differences in all ownership categories are significant. The difference in the FP and government sectors, of $10,300 and $20,000 prpa respectively, is particularly striking. Government subsidies Government subsidies were reported by 846 providers as a separate line item in their GPFR. Chart 088 shows revenue from government subsidies for Group 4 providers compared to the better performing providers. While, overall, NFP providers receive similar subsidies – $48,872 prpa compared to $51,164 prpa – there is a significant difference in the government subsidies of FP and government providers of $9,964 and $8,246 respectively. ACFI management Government subsidy includes ACFI. Chart 089 shows that NFP providers in Group 4 receive $2,717 prpa less than better financially performing NFP providers, while FP providers receive $3,379 and government providers receive $2,988 less. The difference in total government subsidies received by NFP providers is less than the difference in the ACFI they receive because the majority of Group 4 providers receive other government subsidies, including the viability supplement for eligible providers. Resident income Chart 090 shows the extent to which revenue differences related to resident income. The difference between FP and NFP providers operating in the same financial performance group is a material contributor to their differing OEBITDA outcomes. To the extent that providers have some control over these charges – for instance, by using accommodation bonds in low care and high care extra service there may be some scope for the NFP