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Local providers favour cooperation over competition

As the government opens aged care up to market forces, providers have been preparing for increased competition, but four NSW organisations are seeing benefits from their new collaboration.

Next month four retirement living and aged care organisations in NSW’s Central Coast will formally launch a new collaborative, PACE Aged Care, through which a “shared services” model has been developed.

The four member organisations – Peninsula Village, Adelene Village, Central Coast Community Care Association and Evergreen Life Care – hope to use the group to achieve economies of scale in a range of areas including training, human resources, industrial relations, technology, administration and insurance.

It’s also hoped that through the group the providers can achieve synergies – by sharing contacts, knowledge and skills, and collectively improving best practice.

Combined, PACE Aged Care employs more than 630 local people and provides services to more than 1,150 older people.

The initiative has been the result of six months of intense work, although it has been in development since early 2013 when the idea for the group first came out of an informal gathering of local providers.

Ron Thomsen

Ron Thomsen

Ron Thomsen, a board member of Evergreen and project manager for PACE Aged Care, said that the development of PACE Aged Care had been informed by an extensive feasibility study the group commissioned from Stewart Brown accountants.

In addition to economies of scale and synergies, the study found that other potential benefits from the group were the provision of a stronger, more credible voice for the providers in negotiating with government and other stakeholders, and the creation of greater career opportunities for the staff of the member organisations, said Mr Thomsen.

The feasibility study led to the development of an initial strategic plan in 2014.

“In the last six months things have quickened to the extent that the strategic plan has been revisited, and flowing out of that a business plan has been completed,” Mr Thomsen told Australian Ageing Agenda.

“We’ve also produced a project plan which details 10 major projects that were identified in the strategic planning stage, and all 10 have been budgeted and time lined, to be completed by the end of December this year.”

The group has also crafted a comprehensive marketing plan, to create an image for PACE Aged Care and promote public awareness, he added.

It’s early days for the group – it officially launches on 17 March – but already the member organisations are seeing some benefits from their new collaboration.

“We’re already finding the larger bargaining power is providing economic benefits to the members,” he said.

“PACE is a much larger organisation and some service providers to the individual organisations are rethinking what they might have to offer all four together; out of that we’re definitely seeing potential.”

Discussing the lessons learned from the establishment of the collaborative, Mr Thomsen said it was not a process that would happen quickly.

“It’s been a long gestation period… A lot of thought has gone into how it might work operationally, how you might interface PACE with each of the four members. But because of the extensive work done early on, we’ve moved quite quickly in the last six months.”

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