Agestrong Health Group | Residential Aged Care Clinical Insight

Why the latest funding announcement should prompt a closer look at how physiotherapy is delivered in residential aged care.

The latest AN-ACC funding announcement has given residential aged care providers a modest increase in funding from 1 October 2026.

The AN-ACC price will increase from $295.64 to $303.19 per resident per day — an increase of 2.55%.

On paper, an increase is positive.

But for many providers, the more important question is whether a 2.55% increase provides enough additional funding to absorb the continued growth in wages, clinical workforce costs, operational expenses and the increasing complexity of resident care.

The answer from sector financial analysts is increasingly clear.

StewartBrown has stated that the level of the 2026–27 AN-ACC increase will not cover the true costs of care and will place further pressure on the financial sustainability of residential aged care homes.

Their most recent financial performance data also demonstrates just how tight the operating environment already is. For the six months to December 2025, 61% of the residential aged care homes participating in the StewartBrown survey were operating at a loss, while the direct care margin had fallen to only $1.57 per resident per day.

For providers, this creates a difficult balancing act.

You need to continue providing high-quality, clinically appropriate care.

You need to meet increasingly complex regulatory and clinical requirements.

You need to maintain appropriate staffing and workforce capability.

And you need to do all of this within a funding environment that is not necessarily keeping pace with the cost of delivering care.

So where does this leave physiotherapy?

This is where I believe aged care providers need to start thinking differently.

The answer should not automatically be to reduce physiotherapy.

In fact, with an increasingly frail and clinically complex resident population, maintaining access to high-quality physiotherapy remains incredibly important.

The better question is:

Are we using our physiotherapy workforce in the most clinically and financially effective way possible?

Traditionally, many residential aged care facilities have operated with a relatively simple model:

X number of physiotherapist hours per week = physiotherapy service.

But does every one of those hours actually require a physiotherapist?

That is an important question.

A highly experienced physiotherapist brings considerable clinical expertise to assessment, clinical reasoning, complex decision-making, treatment planning, reassessment, clinical escalation, falls management, equipment prescription and multidisciplinary care planning.

There are also components of therapy that, when clinically appropriate and appropriately delegated, can be delivered by a suitably qualified Allied Health Assistant under physiotherapist supervision and direction.

That distinction creates an opportunity.

More therapy does not necessarily require more physiotherapist hours

At Agestrong Health Group, we have been looking closely at how residential aged care physiotherapy can be structured differently.

Our proposed Allied Health Assistant Supervision Model separates clinical expertise from routine therapy delivery, while keeping the physiotherapist firmly at the centre of clinical decision-making.

The physiotherapist assesses the resident.

They establish the goals.

They develop the individualised therapy program.

They determine what can appropriately be delegated.

They provide supervision and clinical oversight.

They review and reassess the resident.

And they remain responsible for clinical decision-making and escalation.

The Allied Health Assistant then delivers appropriately delegated therapy within their scope and under the physiotherapist’s supervision and direction.

This is not about replacing physiotherapists.

It is about making better use of them.

The opportunity is to put the right clinician on the right task

Imagine a resident who requires regular strengthening, mobility practice, balance activities or a structured exercise program.

Once that resident has been comprehensively assessed and an appropriate program established, does every subsequent session necessarily require the same level of physiotherapist clinical expertise?

In some cases, yes.

In others, potentially not.

That is where a clinically governed delegation model can create additional capacity.

The physiotherapist can spend more of their time on residents requiring higher-level clinical reasoning, while the Allied Health Assistant supports regular implementation of appropriately delegated therapy programs.

The result can be:

More therapy on the floor.

Greater utilisation of physiotherapist expertise.

More flexibility in workforce planning.

And potentially lower overall physiotherapy expenditure.

Our current modelling indicates that a delegated model may provide approximately 13–20% savings in physiotherapy costs, while maintaining a similar level of resident-facing therapy hours. These figures are indicative rather than guaranteed and depend on the facility’s resident profile, current service model, workforce and clinical requirements.

It doesn’t have to be an either/or decision

Importantly, changing the delivery model does not mean committing to one approach for every resident.

Some residents will require direct physiotherapist intervention.

Some will benefit from regular therapy delivered by an Allied Health Assistant under appropriate supervision.

Some may be suitable for virtual physiotherapy reviews.

Some may require scheduled onsite physiotherapy blocks.

And some facilities may benefit from a combination of all of these.

This is why we believe the future of residential aged care physiotherapy needs to be flexible rather than fixed.

A new funding environment requires new thinking

The 2.55% AN-ACC increase is not something aged care providers can control.

But providers can control how they use their available resources.

This is not simply a conversation about reducing expenditure.

It is a conversation about value.

How do we make sure every dollar invested in physiotherapy produces the greatest possible clinical benefit?

How do we make sure our most highly skilled clinicians are spending their time where their expertise adds the greatest value?

How do we maintain regular therapy for residents without automatically increasing physiotherapist hours?

And how do we create models that can flex as resident needs change?

These are the questions that will become increasingly important as aged care providers navigate the financial realities of the next few years.

The opportunity

At Agestrong Health Group, we don’t believe there is one physiotherapy model that works for every residential aged care facility.

We believe the service should be designed around the residents, the clinical requirements, the existing workforce and the available budget.

That might mean a traditional physiotherapist-led model.

It might mean an Allied Health Assistant working under physiotherapist supervision.

It might mean scheduled physiotherapy blocks.

It might mean virtual reviews.

Or it might mean a combination.

The important thing is that the model is clinically appropriate, properly governed and financially sustainable.

Because in the current aged care environment, doing things the same way simply because that is how they have always been done may no longer be enough.

The question isn’t whether you can afford physiotherapy.

The question is whether you can afford not to rethink how your physiotherapy service is delivered.