Aged Care under pressure as calls grow for Royal Commission – EHE, REG, JHC
Stock
Estia Health (ASX:EHE) $2.48, Japara Healthcare (ASX:JHC) $1.42 & Regis Healthcare (ASX:REG) $3.23 as at 17/09/2018Event
The three listed aged care providers have all been whacked between 11-16% each this morning on the back of new PM Scott Morrison’s push to open a Royal Commission into the sector. There has been many investigations into care provided to the elderly across all providers for some time now highlighting the structural and systemic issues facing the industry and as the Australian population ages, the issue looks to only be getting worse as funding falls and demand rises. While the Royal Commission has not formally been launched, it appears it has bipartisan support as Bill Shorten announced he believed action was overdue. Terms of the commission will need to be created, and it will likely target both for & not-for-profit providers to try and reduce the growing complaints backlog that has seen the regulator close nearly one facility per month. Four Corners will also be highlighting on the failings of aged care in a two part series starting tonight as more than 4,000 people responded to their call to contribute to the investigation – touted as the biggest contribution to an ABC investigation. The series will focus on a number submissions from the public regarding the poor care residents have received and further enhance the calls for the Royal Commission. Estia Health (ASX:EHE) Chart
Japara Healthcare (ASX:JHC) Chart
Regis Healthcare (ASX:REG) Chart
Market Matters Take/Outlook
The listed companies have taken a battering, and although the commission will focus on all providers to aged care. Listed companies often face the most scrutiny as they can been seen as the public face for backlash. Although demand for aged care services will continue to rise – 1000 Australians turn 85 each week, these stocks will likely come under pressure while they face the public scrutiny through a Royal Commission.
