Nearly 200 aged care homes in dire straits

Finbar O'Mallon
Almost 200 aged care providers housing more than 50,000 older person are at risk of going broke

Almost 200 aged care providers housing more than 50,000 older Australians are at serious risk of going broke.

The peak national body for providers, Leading Aged Services Australia, has identified an alarming scale of the risk of collapse.

Its accountants went over the publicly-available financial reports of aged care homes from 2017/18 and found 197 providers faced collapse.

LASA believes an extra $1.3 billion in federal government funding is needed before Christmas to keep them afloat.

"The scale of this risk is alarming for residents and their families, as well as stressed staff, financially stretched providers and the government," chief executive Sean Rooney said on Tuesday.

It follows the release of a scathing review of a Gold Coast nursing home that was forcibly shut and its residents evacuated after it went into administration.

That report found federal aged care regulators had failed to appreciate the mounting risk at Earle Haven.

Eight of the 69 residents were sent to hospital after the Queensland government organised an evacuation.

Three have since died, including one person who suffered a fall during the evacuation.

Mr Rooney said more than half of aged care operators were running at a financial loss.

He called for structural adjustment programs in the industry to let financially distressed operators bow out, while other operators stepped in to take their place.

Mr Rooney told AAP this would help avoid the "unplanned chaos" of situations like Earle Haven.

"We can't just keep putting money into the system if the system is broken," Mr Rooney said.

He said fundamentals in the aged care system - policy, regulation and finance - weren't keeping pace with the changing needs of the sector.

The association previously released a financial risk survey of aged care providers, finding 80 per cent were facing challenges.

Of these, more than half would have to reduce investment, 41 per cent would have to cut staff and 15 per cent may have to withdraw services.

Aged Care Minister Richard Colbeck told parliament on Tuesday the government would "make additional investment into the aged care sector prior to Christmas".

"The government has taken significant efforts over recent times to repair the aged care system," Senator Colbeck said, in answer to a Labor question about the LASA report.

He said the government was focused on home care places, young people in aged care and the use of restraints - three areas identified as "urgent" in the royal commission's interim report.