How four aged care leaders are driving non-care revenue strategies

By Dotti Gill, Marketing Manager

The pressure to meet care minute compliance under the AN-ACC framework has left providers with slim margins, making non-care revenue streams essential for financial sustainability. With care delivery subsidies offering little relief, leaders are turning to accommodation pricing, additional services, and alternative funding models to close the gap. In our recent webinar, we explored these challenges with four aged care leaders: Anthony Donnellan, Business Development Manager at Vasey RSL Care, Victoria; Michael Griffin, Chief Customer Officer at Respect; Yvonne Ayre, Chief Executive Officer at Regents Garden; and Joel Murray, Operations Support Manager at Uniting NSW & ACT. They provided valuable insights on the challenges their organisations experienced and the strategies they implemented to enhance non-care revenue.

Insights on non-care funding challenges

Anthony’s journey with non-care revenue optimisation

Anthony discussed the importance of maintaining care minute compliance while also exploring alternative revenue sources. He noted that the average daily subsidy under AN-ACC yields minimal surplus against a 215-minute target, emphasising the need for non-care revenue.

To address this, Vasey RSL Care has focused on strategic accommodation pricing and the transition to health packages. Since 2024, all sites have implemented RAD increases based on market analysis and IHACPA applications, ensuring prices reflect demand. These changes have maintained occupancy levels without resident pushback. “A thorough review of facility offerings, local markets, and competitor pricing ensures long-term financial stability,” Anthony said.

The shift to health programs is also a major focus, with an emphasis on service efficiency and clear operational structures for managing opt-in/opt-out offerings.

Michael’s experience across a growing portfolio

Michael shared the challenges of scaling from 7 to 27 facilities, where non-care revenue has become essential to offset care funding constraints. His organisation has faced fluctuating occupancy and limited margins from care subsidies, prompting a focus on pricing, additional services, and operational efficiency.

To boost occupancy, Michael’s team has conducted customer and competitor research, adopted a CRM system, and hired sales-experienced staff. His additional services model, developed over 18 months with consultant support, now includes a mandatory program that has increased revenue without affecting demand.

Michael’s team has also invested in integrated software and flexible rostering, which helps align pricing strategies with operational efficiency. He highlighted the importance of simplifying consumer education around pricing, as many families find fee structures difficult to understand.

Yvonne’s approach at Regents Garden

Yvonne shared the financial complexities at Regents Garden, which manages 515 beds across five sites, 300 of which are extra service beds. Historically, these have been a significant revenue stream, but with extra services phasing out by July 2025, the organisation must adapt. Occupancy remains stable at 99%, supported by investments in staff training and care quality.

The transition to health packages presents both an opportunity and a challenge, as incoming baby boomers demand services different from past preferences. Yvonne’s team is actively evaluating resident needs to design offerings that justify additional costs while reducing the administrative burden of an opt-in/opt-out framework.

While RAD increases and the 2% retention policy provide interim financial stability, Yvonne stressed that the main challenge lies in creating resident-centric offerings that meet evolving expectations.

Joel’s strategy at Uniting NSW/ACT

Joel outlined the dynamics of managing 5,700 beds, where care revenue constraints have made non-care funding a priority. With occupancy nearing capacity, Uniting has shifted focus from volume to maximising yield. All facilities have implemented additional service fees, and accommodation pricing has grown annually without significant resistance.

This approach is backed by portfolio-wide reviews that assess occupancy, pricing, and refurbishment plans over 3 to 10 years. Joel noted the role of analytics in competitor benchmarking and demographic forecasting, which allows for quarterly pricing adjustments.

Joel also mentioned that larger providers like Uniting have the financial resilience to absorb regulatory changes, while smaller regional providers face increasing liquidity risks. He expressed doubts about the feasibility of RAD removal without substantial government capital injections, highlighting the importance of strategic financial planning.

Strategies employed to enhance non-care funding

Anthony’s focus on pricing
Anthony emphasised the importance of precise pricing strategies. His organisation regularly reviews RADs, with half of their sites assessed through IHACPA applications. “Regular market analysis ensures pricing stays current,” he said. This approach, paired with health program development, seeks to balance revenue growth with resident satisfaction.

Michael’s investment in systems and occupancy
Michael highlighted the value of systemic improvements. His organisation has adopted a strategic marketing framework to boost occupancy, using digital tools and a refined sales process. Investments in integrated software and flexible rostering also support pricing strategies, improving operational efficiency.

Yvonne’s commitment to resident-centric offerings
Yvonne pointed out the need to update legacy revenue models to meet modern demands. Her team is designing health packages based on resident feedback, recognising that “value drives willingness to pay.” This approach, combined with sustained occupancy and targeted RAD increases, aims to maintain financial stability during the transition from extra services.

Joel’s focus on yield optimisation
Joel discussed Uniting’s strategy of maximising yield. By leveraging the $750,000 RAD cap increase and advanced analytics, they’ve introduced quarterly pricing adjustments. “Market readiness supports these price changes,” he explained, noting minimal resistance linked to rising property prices. This ensures liquidity and capital value are optimised across their portfolio.

Looking ahead

The webinar highlighted a sector-wide challenge: with care subsidies offering limited financial relief, non-care revenue is crucial for sustainability. Nearly 600 services have raised prices recently, and demand is expected to exceed capacity by 2030, requiring significant capital investment. The diverse strategies of Anthony Donnellan, Michael Griffin, Yvonne Ayre, and Joel Murray demonstrate the need for tailored approaches, from data-driven pricing to operational improvements.

With rising compliance costs and the introduction of health packages, providers must balance innovation with regulatory demands. Regional providers, in particular, face liquidity risks, making data-driven decisions and financial flexibility more important than ever. AI and real-time analytics are expected to play a growing role in pricing and forecasting, shaping the future of aged care financial management.

You can watch the full recording of the webinar here.

How we can help:

Ask us about our Capital Optimisation Strategy Workshop, designed to help providers maximise non-care revenue for profitability and sustainability. We’ll assess your current state, define clear financial goals, and create a roadmap to achieve them. For more information, request a callback.