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
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
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