Aged care costing

IHACPA undertakes cost collections to gain a better understanding of the costs of delivering aged care services in residential and in-home settings. 

The results of these collections then support the development of IHACPA’s pricing advice to the Australian Government. 

IHACPA’s pricing advice will support the transition to activity based funding as part of Australia’s aged care reforms.

How do cost collections work?

IHACPA’s cost collections gather cost and activity data from a wide range of aged care providers with different geographic, demographic, residence type and individual characteristics. 

This delivers what is called ‘representative costed data sets’ that will support the refinement of classifying aged care costs and activities over time. 

Why are cost collections important? 

Cost collections are the first activity in developing an understanding of the drivers and variation in cost data, to help improve the quality and integrity of data collection. 

To ensure accurate and standardised costing across the aged care sector for activity based funding, it is essential to understand the factors driving costs. 

This enables IHACPA to develop a sustainable approach to aged care cost data collection, which continues the development and refinement of costing in aged care.

IHACPA is currently undertaking costing projects to contribute to the development of data collection specifications and data acquisition methodologies for the aged care sector. ​

IHACPA encourages all aged care providers to be part of cost collections to help shape the future of Australian aged care services. Register to express your interest in participating.

Get involved

Residential aged care costing

As part of IHACPA’s expanded responsibilities, the agency is required to understand the costs incurred by providers in residential aged care, changes in costs over time, and the drivers of costs.

In December 2018, the Department of Health and Aged Care engaged the Australian Health Services Research Institute (AHSRI) at the University of Wollongong to undertake the Resource Utilisation and Classification Study (RUCS). 

RUCS was a national study that looked at the needs, costs and classification of residential aged care. The RUCS reports describe the key parts of the study, including a proposed new assessment and funding model called the Australian National Aged Care Classification (AN-ACC). 

On 1 October 2022, the Australian Government endorsed AN-ACC as the assessment and funding model for residential aged care.

IHACPA will have annual cost data collections to be able to inform annual price advice to government. It is currently working to establish sustainable and accurate processes to collect cost data on a regular basis.

Current projects

IHACPA is working toward developing an annual cost data cycle that will be used to inform annual AN-ACC pricing advice to the Australian Government.   

The Residential Aged Care Cost Collection (RACCC) 2024 will include additional specific costing studies to ensure that the costs of residential aged care are accurately captured. 

If you would like to participate in the RACCC 2024 please register your interest using the form below.

Completed projects

In 2021-22, IHACPA commissioned the Residential Aged Care Data Insights project (RACDIP) and the Residential Aged Care Costing Pilot Study (RACCPS).

  • The RACDIP achieved its primary aim of using existing aged care datasets to analyse the AN-ACC funding model and expenses.
  • The RACCPS tested the collection of residential aged care data, including care cost, time and activity data, and provided a set of recommendations.

In 2023, IHACPA completed the Residential Aged Care Costing Study (RACCS) to inform the development of a costing framework and methodology to produce cost, time and activity data sets, and related materials. IHACPA will use these data sets for providing pricing advice on residential aged care. The final report is now available to download. 

Support at Home costing

In 2022, IHACPA’s functions expanded to include the development of pricing and costing advice on Support at Home aged care reforms. 

For this reason, IHACPA is undertaking a Support at Home Costing Study (SAHCS). The aim of this study is to develop initial pricing advice to the Australian Government and inform the implementation of the Support at Home program. 

The SAHCS aligns with the yearly cost cycle objective of working to achieve a sustainable approach to cost data collection. 

IHACPA is finalising the SAHCS 2023. The aim is to establish a method of consistent data collection. This can then be expanded on to ensure that pricing advice reflects the costs of delivering services and to support transparent funding. 

The study will also provide IHACPA with a better understanding of current service provision, data maturity and the drivers of cost variation of in-home aged care services.

Current Commonwealth Home Support Program (CHSP), Home Care Packages (HCP) and Short-Term Restorative Care (STRC) programs will be included in the study.

The SAHCS 2023 is an introductory study into the in-home aged care sector. Additional work will be undertaken by IHACPA to build on the learnings and create broader sector awareness. 

The Support at Home Cost Collection (SAHCC) 2024 is due to commence later this year. If you would like to participate in the SAHCC 2024 please register your interest using the form below.

Further information

Have a question or want to express interest in being part of our aged care cost collections? Contact us by filling the form below.

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