By Andrew Masters, Executive Chair, Bickerton Masters
Australia urgently needs more aged care beds. Yet at exactly the same time, the economics of delivering them are becoming increasingly difficult.
In a recent article by The Guardian, Health Minister Mark Butler is quoted to say “Australia needs a new aged care facility every 72 hours to deliver 18,000 additional beds within three years”.
Meanwhile, the AN-ACC price will increase by 2.6% from 1 October 2026, to $303.19 per resident per day. Against rising construction, workforce and operating costs, providers are questioning whether new developments remain viable.
Recent industry reporting suggests projects representing more than 2,000 new beds have already been shelved or put on as a result.
We therefore have two realities confronting us at the same time:
We desperately need more beds. Yet the business case for building them is becoming harder to make.
The consequences are already in our hospitals
Recent ABC reporting revealed that more than 1,400 people were stranded in Queensland public hospitals in April, around three-quarters of them older Australians. The figure had increased from just over 1,100 a year earlier, with the bed block estimated to be costing Queensland more than $3 million every day.
But there is another question we should be asking:
Who are these people, and what type of care do they actually need?
Treating stranded patients simply as a capacity problem risks overlooking the complexity behind the numbers.
Some may have stable but complex clinical or physical conditions that conventional residential aged care services are not resourced to support. Others may be living with dementia accompanied by significant behavioural and psychological symptoms, requiring environments, staffing models and expertise that many providers are understandably cautious about accommodating.
That distinction matters.
Simply creating more conventional aged care beds will not necessarily resolve hospital bed block if those beds are not designed, staffed and clinically supported for the people who actually need them.
There are models worth examining. HammondCare’s early approach at Daw Park, for example, demonstrated the potential of a step-down model, where the aged care provider supported everyday living and personal care while hospital clinicians retained responsibility for more complex clinical needs.
Perhaps the question therefore isn’t only “How many beds do we need?”
It is also:
“What kinds of beds, care environments and partnerships do we need?”
So, what can we do now?
Australia unquestionably needs new aged care facilities, and the sector needs funding settings that make investment in them viable.
But if we cannot build new capacity quickly enough, we also need to look much harder at the assets we already have – and whether they can be adapted to meet emerging needs.
Across Australia’s existing aged care estate there may be significant untapped capacity: underutilised areas, inefficient layouts, oversized communal spaces, redundant circulation, administration occupying valuable floor area, or land capable of supporting carefully planned additions.
Sometimes the opportunity might be five beds. Sometimes 10, 20 or more.
We recently participated in an industry discussion where one example demonstrated how adding just 13 beds generated sufficient additional revenue to help fund a broader redevelopment.
That changes the question from simply:
“How do we build more?”
to:
“How much more capacity – and what type of capacity – can we unlock from what we already have?”
Start with strategy, not drawings
This is the critical point.
We shouldn’t start by drawing more bedrooms. We should start by understanding the people who need them.
Tomorrow’s residents will have higher levels of acuity, increasing prevalence of dementia and more complex care needs. Providers may increasingly need environments capable of supporting people who historically would have remained within health services for longer.
That requires more than architecture.
It requires conversations about models of care, clinical partnerships, workforce capability, dementia and behavioural support, operational risk, funding and the physical environment.
Only then should we ask what the building needs to become.
A strategic asset review can examine occupancy and demand, models of care, workforce movements, clinical requirements, building and infrastructure constraints, underutilised spaces and available land.
It may identify opportunities for additional conventional residential aged care beds. It might reveal the potential for dementia-specific accommodation, higher-acuity environments or step-down care developed in partnership with health services.
Or it may demonstrate that redevelopment isn’t viable.
All of those outcomes provide valuable information.
The objective isn’t simply to build more. It is to invest in the right capacity.
Small numbers can create significant capacity
When Australia needs thousands of additional beds, finding five or ten within an existing facility can seem insignificant.
But consider a provider with 20 existing homes identifying an average of just five viable additional beds at each site.
That’s 100 additional places.
Multiply that thinking across Australia’s existing aged care estate and incremental capacity could make a meaningful contribution while larger developments progress.
It won’t solve the problem alone. We need new facilities, appropriate funding and long-term investment in aged care infrastructure.
But perhaps we also need to move beyond talking about stranded patients as a single group waiting for “an aged care bed”.
Who are they? What care do they need? What prevents providers from accepting them? And what would need to change – clinically, operationally, financially and physically – to create the right places for them?
Those questions take us back to where good development should always begin.
Strategy before drawings.
We can’t control every economic or policy setting affecting aged care.
But we can understand our assets better, understand the people who need them, challenge our assumptions and make more informed decisions about where to invest.
Perhaps some of the capacity Australia urgently needs isn’t waiting to be built.
It is waiting to be reimagined.
If you need help unlocking opportunities within your facility, please do not hesitate to contact our team. With 30 years experience in this field, we are more than happy to partner with you to find the best solution.