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The legal ball game changes in a consumer-focused environment

While a consumer-driven home care market will create new opportunities to innovate and be creative, providers also need to be aware of their enhanced legal obligations in the new regulatory environment, writes Julie McStay.

Julie McStay

In any business, opportunity can be found in the gap that exists between demand and supply. As the Australian aged care sector comes to terms with a changing regulatory environment, responsive service providers will find multiple ways to grow their businesses by paying close attention to what consumers demand.

‘Give the customer what they want’ may seem to be an obvious business tactic. But community aged care providers are entering a new era, where federal funding follows the consumer who can pick and choose between the services supplied by providers. In circumstances where providers are learning to operate within new and unfamiliar guidelines, the obvious can sometimes go by the wayside.

In theory, this new funding model will lead to a more responsive service sector that will deliver efficiencies to the system. But as with all theories, that outcome is not guaranteed; there will be a period of trial and error as providers seek to fulfill consumer demands within an untested regulatory framework.

The first instinct of providers may be to err on the side of caution and take a conservative approach to the services they choose to offer to community aged care consumers. However, this approach could lead to lost opportunities.

Providers should be wary of years of conditioning to government regulation that could restrict their ideas.

The mindset of ‘we can’t do it because we think the legislation won’t allow it’ can be poisonous to growth prospects. So too can the habit of sticking to what you have always done.

Rather, providers should seek to be creative in their offerings and listen attentively to what it is that the consumers are asking for. It is through this dialogue between supplier and consumer, carefully formulated in well drafted contractual agreements, that both seller and buyer can benefit from these new arrangements.

Dealing with bureaucracy at any level can be a test of patience and ingenuity. The ability to recognise where opportunity resides, hidden among the red tape of government regulation, is a skill in itself. It is important for providers to seek specialist advice about what is and is not allowed within the current regulations so they can best meet consumer expectations.

While there is a substantial opportunity for providers to offer additional services to customers, there is also the associated risk that providers will be faced with in a more consumer empowered, market-driven environment.

More than ever before, service providers will need to scrutinise their contractual relationships with care recipients and the attendant risks and legal obligations of those arrangements.

Contracts are complex, and issues of risk management and service quality need to be addressed. Employment and workplace arrangements also need to be considered. The consumer-focused models are a new ball game, especially in terms of consumer protection compliance and legal risk mitigation. Many service providers may not be completely aware of their enhanced legal obligations.

In any government model where funding follows the customer and the customer chooses the provider, some providers will be challenged by a competitive environment that brings potential rewards as well as potential risks.

Promises will be made in the heat of competition for customers’ business and the Australian Consumer Law will come into play. Service providers should move diligently to ensure adequate systems and contractual protections are in place to satisfy the Australian Consumer Law requirements for service delivery and to mitigate their legal risks.

The new funding framework provides plenty of scope for agile and responsive providers to build sustainable businesses. The government has moved in the right direction to allow for greater flexibility in the market to better respond to consumer demands. And provided the government can resist its natural tendency to fiddle with the regulatory settings, both sides of the supply-demand axis should be able to settle at an equilibrium that satisfies all parties.

Julie McStay is a director of Hynes Legal in Brisbane, and leader of their aged care and retirement living practice.

This article appears in the current Autumn edition of Community Care Review magazine, which is out now.

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