Aged care leader Aegis Care Group will further diversify into the health sector, with its second integrated facility after a consolidation of the business's ownership.
Aged care leader Aegis Care Group will further diversify into the health sector, with its second integrated facility, after a consolidation of the business's ownership.
Aegis chief executive and proprietor Michael Cross, who has taken full ownership of the business in the past year, confirmed that the Joondalup proposal included a new eight-story building in the heart of the city.
Mr Cross is now the sole proprietor of Aegis, the state’s biggest aged care provider, after buying out his partner Geoff Taylor.
The consolidation has taken place in stages since 2001, when Mr Cross became a 50 per cent shareholder.
About 20 years ago he moved to 70 per cent ownership and then 80 per cent in 2018.
Mr Taylor retired four years ago, and sold out the final stake as recently as June.
Despite moving to full ownership, Mr Cross does see more challenges on the horizon due to inadequate government responses to issues such as cost and standards which have plagued the sector.
Based on 3188 aged care beds in WA Aegis is more than twice the size of its nearest local competitor, another privately owned player Hall & Prior.
The group is now overseen by largely independent directors, with Mr Cross joined on the board by accountant Adrian Sloan, strategy, risk and performance consultant Leanne Mulligan, who is general manager of St John of God Health Care’s Office of the Trustees, and St John of God Midland Public and Private Hospitals chief executive Paul Dyer.
The Murdoch facility, part of a medical precinct driven by property developer Hesperia, was often referred to as the state’s first medihotel and signalled Aegis’s first foray out of aged care.
The Joondalup facility would not be the same scale or have all the same facilities.
“Subject to medical sector support, regulatory approvals and bank financing, it is proposed that all the services offered at Murdoch will be replicated at Joondalup to also assist in meeting the escalating health services needs of the North Metro Region,” Mr Cross told Business News.
Badged Aegis Health, it was fully owned by Mr Cross at the outset.
Mr Taylor, a founder of insolvency firm Taylor Woodings, was an equal partner in the aged care business founded in 1982.
However, he had sold down his interests over recent years and, 12 months ago, held approximately 20 per cent of the operating business.
Australian Securities and Investments Commission records show Mr Taylor and his business partner Tony Woodings still hold an interest in some properties that Aegis operates on.
The new development will also include a residential aged care element.
It will be part of the former Joondalup Basketball Stadium site, which was awarded by Landcorp to a joint venture between Aegis and developer Carmel Group in 2018.
Mr Cross said he remained focused on the provision of premium residential aged care and lifestyle services in WA, and the ownership change was part of delivering that vision.
“I am driven by the legacy initially to my father two decades ago who did not receive quality aged care, and more recently to my family in the provision of premium mental health services,” he said.
“I have therefore moved to develop my vision of clear diversification of the existing core Aegis aged care facilities into an integrated range of health services.
“This innovation is founded on modern boutique short stay surgical theatres geared to the needs of today’s specialists, inpatient and day therapy mental health services, tailored GP led urgent care services, the 80 bed medihotel extension of FSH [Fiona Stanley Hospital] patient capacity, and a medical training centre to cater for our future health workforce.”
“I have a strong and experienced executive team to support my personal commitment and vision to achieve more for the WA community in terms of health services as they need to increase into the future,” he added.
“I have no current intention to seek any new business partnerships, rather to build on what Aegis has proven over more than four decades in residential aged care and continue to respond to the future need with the support of all our key participants in health.”
Mr Cross said the aged care area remained problematic for many operators due to the structure of the sector, and doubted the federal government plan to inject more funds in home-based care would provide a solution.
He warned of a potential impact on state resources as a result, especially if disincentives to investment in the sector remained such as limits to the skilled workforce and the high cost of construction.
“With over 50 per cent of providers still unprofitable despite the massive capital investment involved, the aged care sector response by [the federal] government may not provide the improved sustainability they target.
“To motivate our ageing population to stay at home is enviable but only to the point where their care, comfort, nutrition, safety, and overall wellbeing can be maintained.
“Increased pressure on public hospital services could result.
“More focus is needed on the existing inefficiency of workforce deployment to the widely spread home care recipients.
“The significantly increased user pays model announced by government will further reduce the motivation to accept residential care support when required.
“The resultant reduction in the quantum of government funding being forecast will be judged by future prospective residents and their families.
“It is also doubtful the number of new care facilities will increase markedly given this shift when combined with sustained pressures within the building industry.
“Residential aged care facilities will continue their trend towards the provision of more acute services, but the limit of that capacity will be reached.
Mr Cross said care standards had risen for the sector as a whole, but he hinted that that that message was not always clear.
“The quality of residential care and accommodation being offered today has improved substantially over the past decade and it is up all providers and the industry generally to show our elderly prospective residents the true benefits of accepting the support of our dedicated and hard-working care givers in modern safe environments.
“Our undoubted need for a sustainable residential aged care sector is at a delicate point of its evolution and we should continue to explore options,” he added.
