Monte v Millie – the latest word
Sydney’s Sir Moses Montefiore Home has published its answer to the latest comments made by care home owner Millie Phillips.
In the last edition of the Australian Jewish News (AJN 16/11/12), Mrs Phillips continued her bizarre campaign against the Home and placed another full page advertisement where she posed a number of questions which sought to denigrate the Board and bring the management of the Home into disrepute.
Our CEO, Robert Orie, met with Mrs Phillips a week before she placed this advertisement and thoroughly answered all of these questions. In light of this fact, I can only conclude that Mrs Phillips’ motives are to undermine the reputation of the Montefiore Home, regardless of the truth.
If so, this is deplorable behaviour and should alarm every member of the community. Senior management of the Home are amongst the most highly regarded individuals in the aged care industry and have a wealth of experience in both the commercial and not-for-profit sectors. The questions raised by Mrs Phillips indicate that she has absolutely no understanding of how professionally the Montefiore Home is managed, nor does she have an understanding of the financial figures she inaccurately quotes. In my opinion, Mrs Phillips, who operates nursing homes well below the standard of those operated by the Montefiore Home, is not a credible critic.
Below you will find a detailed response by our CEO and our independent auditor in respect to each of the questions raised by Mrs Phillips. In the interest of space, I have summarised her initial question. I trust that by reading our response you will be able to make your own assessment about Mrs Phillips and her apparent lack of knowledge and incapacity to understand the complex and sophisticated operations of the Montefiore Home.
David Freeman AM President
QUESTION 1
Why has the Home failed to claim Government care subsidies and forgone $40 million in income which cannot be claimed retrospectively? Monte’s accounts make no mention of any such funding being received until 2010-11.
ANSWER:
This is blatantly incorrect. The Home has always claimed its entitlement to Government care subsidies. Quoting directly from the past 5 years Annual Reports, in the 2007-08 financial year, Government subsidies totalled $19.645m, in 2008-09 they totalled $22.718m, in 2009-10 we received $25.201m, in 2010-11 they accounted for $29.433m and in the last financial year they totalled $32.686m. In addition to modest indexation applied to care subsidies, the increase in funding over the years is the direct result of the growing care needs of our residents and the corresponding increase in their care subsidy.
QUESTION 2
Why does the Home use excessive agency staff and have trouble attracting and retaining permanent staff?
ANSWER:
According to the Government’s own statistics (National Aged Care Workforce Survey) approximately 25% of nursing staff working in residential aged care facilities are casual or contracted (agency) staff. During the 2010-11 financial year, agency staff provided less than 15% of the total care hours provided by the Home. Given that we use contracted staff primarily to fill shifts of permanent staff members who are either attending training or on annual leave or sick leave, which can represent around 10% of a working roster, the use of agency staff to fill casual vacancies at the Home was less than 5%.
Permanent staff members currently account for 98% of the entire working roster and in 2011 we received a high commendation in the National Aged Care Association Awards as an Employer of Choice.
QUESTION 3
In 2011 Stewart Brown Business Solutions published their “Aged Care Financial Performance Survey”, that stated that care costs as a % of resident fees and care subsidies range from 53%-60%. Why is Monte’s ratio running at 95%? Do you regularly benchmark your operating costs?
ANSWER:
The figures quoted by Mrs Phillips are incorrect. I refer to the following statement from our independent auditor, Stuart Hutcheon, Partner of Stewart Brown & Co, the firm responsible for producing the survey.
“In 2011 the Montefiore Home’s care costs as a ratio of resident fees and care subsidies and calculated in accordance with the Stewart Brown Performance Survey was in the order of 59% and therefore consistent with the survey results” – Stuart Hutcheon, Partner, Stewart Brown & Co.
With regard to benchmarking, the Home undertakes regular benchmarking exercises and uses data from many sources including respected local sources such as Stewart Brown and Grant Thornton as well as international sources. The Home has ventured internationally for benchmarking data, which is not just limited to financial data but also includes quality and care outcomes, because it is difficult to find local aged care providers that are comparable in terms of the depth of services the Home provides, particularly in the area of allied health services, such as physiotherapy, diversional therapy and social work.
QUESTION 4
In the same Stewart Brown Survey they report EBITDA results of $18-20,000 per bed, per annum. Why does Monte have a deficit of $6.7m in 2011? What are “Other Expenses” totalling $1.5m and when will you publish your audited accounts?
ANSWER:
According to the Stewart Brown Survey the average EBITDA return, which is earnings before interest, tax, depreciation and amortisation, was in the range of $3,762 per bed to $6,407 per bed and well below the $18-$20,000 quoted by Mrs Phillips. The overall deficit of $6.7 million referred to by Mrs Phillips includes depreciation and other non-cash adjustments of more than $10.2m. As such, the EBITDA result was a surplus of $3.5m or $4,700 per bed. Taking into account culturally specific expenses such as religious services, Kosher food and security as well as the high standard of care and services provided to all residents, including fully supported pensioners, the Home’s financial performance is comparable to the top quartile results of commercial operators.
In relation to the question regarding “Other Expenses” this primarily represents the refund of interest earned on bonds for the period whilst awaiting probate. With regard to the audited accounts, the Home will publish the 2012 audited accounts on our website following their approval at the Annual General Meeting.
Robert Orie Chief Executive Officer
Stuart Hutcheon Partner – Stewart Brown & Co
I happen to have a couple friends in Montefiore in Hunters Hill, and vist them occassionally. Also my friend a retired GP with many years of work in Sydney was going with me there. In her practice she was actually atached to a similar retirement village run by the Polish/American convent. She was very particular looking into Monte functioning and considered their standard of care being exceptionally high. I believe that the more recently opened Retairement place in Randwick is even better. Good service is usally more expensive.