Estia Health has been ordered by the Commonwealth government’s aged-care regulator to not take any new residents into two Melbourne homes following COVID-19 outbreaks that have so far led to 82 cases linked to its Ardeer facility and 50 to its Heidelberg West home.
Estia also said on Monday morning the so-called Notices to Agree issued by the Aged Care Quality and Safety Commission required it to immediately appoint an independent adviser “to assist” with the health and well-being of residents and it was also required to provide daily and weekly reports on how it was managing the outbreaks.
Victoria’s fast-growing second wave has shown the vulnerability of the country’s aged-care sector – one characterised by casual workers who often work across different facilities inhabited by vulnerable older people – to the pandemic.
One likely impact is higher labour costs. Short-term agency staff that provide temporarily relief when a facility’s own workers have to go into isolation or recover from COVID-19 themselves, cost about double the rate of the workers that account for up to 75 per cent of the staff in a facility, and operators will likely see their wages bills rise.
“We’re already seeing difficulties with staffing,” Patricia Sparrow, the chief executive of industry body Aged and Community Services Australia, said on Monday.
“As much as 30 per cent of the aged care workforce works between facilities and you’ll probably remember that there’s been a decision to try and limit that. And that’s what we’re working on.”
The shortage compounded by staff needed to self-isolate was creating an “unprecedented” scale of demand, Ms Sparrow said.
“We may well need bring staff from interstate … we’re going to need all the support we can to fill staff shortages now, but also in the days ahead.”
In an update on Monday morning at which he announced 532 new cases and 6 deaths, Premier Daniel Andrews said the state now had 683 cases linked to aged care homes, up from 560 on Sunday and 400 infected health workers, up from 381.
The spread of the virus has been swift – in a market update on July 13 Estia said it had no known cases of infection among residents, but later that day issued an amended notice to say 13 residents were infected at its Ardeer home in Melbourne’s western suburbs. It owns 69 homes nationally.
Estia, which is due to release full-year results on August 18, said on Monday it could not quantify the financial impact of the “rapidly evolving situation” on the company. The shares closed down 12??, or 7.6 per cent lower, at $1.46.
While the company’s FY20 performance is already locked in – Jefferies analyst Vanessa Thomson earlier this month cut her price target for the stock to $1.50 from $1.70 and her earnings per share expectation 4.9 per cent to 16?? – the pandemic’s biggest effect will be on the current trading year.
“We are concerned about FY21,” Ms Thomson wrote in a note on July 13, after Estia disclosed its first 13 infected residents.
“Temporary closure of facilities, greater operating costs with heightened health and hygiene protocols and increased use of more expensive agency staff will impact operating performance this financial year.”
Estia said it was working closely with state and Commonwealth health authorities and the regulator to manage the outbreaks.
“This is a very challenging time for our residents and their families. We have added extra support so that families are regularly updated about their loved ones, including those residents that have been transferred to hospital,” it said.
“We are providing daily updates to family members on their comfort and condition; and families can access a dedicated support line for the home. This is also a difficult time for our employees. We would like to thank them for their continued dedication and commitment as we all work through this together.”
Shares in rival Regis Healthcare – the health department has linked 25 cases to Regis Aged Care in Brighton – closed up 2??, or 1.4 per cent, at $1.41.
Japara Healthcare closed up half a cent, or 1 per cent, at 50??.
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