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Transition to CDC: a financial perspective


In preparing for the roll-out of consumer directed care, some of the first and most significant work happened in transforming our business model, writes Neil Fawcett.

The introduction of consumer directed care (CDC) has required a total rethink of our organisation’s service model. After a significant amount of consultation with clients and their families, we realised that while CDC brought with it the option for greater control for clients, it didn’t necessarily mean all clients wanted to take full control over their package.

Neil Fawcett, chief financial officer of Benetas.

Neil Fawcett, chief financial officer of Benetas.

As a result, we created three levels of package service:

  • Fully supported
  • Partnership
  • Self-managed.

In our opinion, this was what CDC was all about:  giving clients the choice on how much control they wanted to have, rather than expecting everyone to want fully self-managed packages.

To support the new model we needed to develop fee structures for each level of service.  In doing so, we needed to consider what the client would be prepared to pay but also to be competitively priced in the market.

As part of this, it was critical that we clearly articulated to our clients and staff how many hours were available under the different types of package service. And it was equally important that we developed tools to track the hours used and be able to charge clients who used more than the allotted hours under the package they had chosen.

Whilst we can’t truly know the full impact of CDC yet, we have started to get some indication. Since beginning the process of moving package funding and client expenses into the balance sheet, we’ve already seen it impact our financial performance.  The transition has highlighted inefficiencies that exist in our current staffing structures.

Shifting to user pays

Another challenge that we needed to plan for financially was the potential impact of the move to a ‘user pays’ system. Home care reform has seen the introduction of concepts such as co-contributions and income-tested fees, and with this comes added complexity.

As a not-for-profit aged care provider, we needed to be mindful that this system was being introduced to a cohort that had never been asked to make a financial contribution towards the services they received as part of a package. We identified that this shift was inherently going to bring with it challenges, based on the fact that it was new.

This challenge is made even more complex by many people still subscribing to the theory that it’s the government’s responsibility to provide care and support to people as they age. While there is nothing wrong with this argument, the reality is that this isn’t how things operate anymore. It has become our responsibility, particularly as a not-for-profit provider, to re-educate our service users.

So how did we do this?

We relied heavily on upskilling our Benetas Customer Centre staff and equipping them with the knowledge they needed about the reforms, to appropriately support clients, future clients, families and staff.

In addition to providing aged care advice, the customer centre is a central admission point for Benetas clients and for this reason plays a significant part in outlining client responsibilities around payment.

Supporting staff to change their thinking

Education from the customer centre needed to be reinforced by the messages given by our staff. We needed to encourage our staff, particularly managers, to think more commercially and to act quickly when fees go unpaid.

This has and will continue to require a huge cultural shift for staff. We are finding that some staff are making the transition, but others are finding it more difficult.

As a not-for-profit, this has come with its challenges. Our program staff are a dedicated group, who have been drawn to working for a not-for-profit organisation for a reason. Supporting staff to adjust their mindset and behaviours has involved respecting their values, and upholding those of the organisation, while retraining them in setting fees, creating budgets and having financial conversations with clients.

We’ve had to stay consistent with our messaging, in that despite being a not-for-profit, we are not prepared to accept significant loss or debt. We need to deliver a sustainable business.

What’s next?

With the major financial challenges addressed, our focus now moves to how we can invest in information technology to better serve our customers under the new model. We’re committed to using new technologies to deliver better client outcomes and an improved customer experience.

For Benetas, this includes an $8 million investment over five years into our current finance, residential care and home care IT solutions, as well as implementing a client resource management solution to support the work of our customer centre.

We’ve just started transitioning our home care clients to our CDC online client portal, MyBenetas. The portal provides clients with greater access to their statements, also giving them the ability to change the type and frequency of the services they receive from us. This will join the suite of initiatives we have  already rolled out to support the implementation of reforms across the business.

We know the journey to CDC in some ways is only just beginning, and it’s not certain what exactly the future will hold or what the impacts might be. What we do know, however, is that with proper planning across all areas of the business, the introduction of the ‘new world order’ gives businesses the opportunity to not just react, but innovate, transform and grow.

Neil Fawcett is chief financial officer with Benetas.

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5 Responses to Transition to CDC: a financial perspective

  1. Paulene July 16, 2015 at 1:35 pm #

    Great article, thanks Neil. It confirms my suspicion that the best community services workers are a cross between nurses, accountants and small business owners!

  2. Alan Williams July 16, 2015 at 2:55 pm #

    Having a level 4 package (10months) for my wife and having now a dialogue with my service provider has been great. Teething problems, Yes.
    I liken it to two newly weds. both have to have dialogue with each other to resolve difference but like marriage if you don’t talk about issues your heading for divorce. Service provider really do like feedback, they cannot make the relationship better unless you talk.
    Service providers are transistioning to the new regime where consumer do have more say but my experience has been positive.

  3. Belinda July 17, 2015 at 6:05 pm #

    Level four package and Level 2 package statements arrived, overcharged in excess of $400 having two showers on one day at same time, respite cancelled with ten days notice, still on statement, etc etc. Took myself and hubby 2 hours yesterday and nearly all day today to check calendars and statement, wrong providers listed, wrong amount of money listed….disgraceful! I can’t help but think of those who “trust” the system – and hope they don’t get ripped off. I’m not saying this is done intentionally at all, but the system is not user friendly, we always give notice with cancellations within week at minimum to all parties involved and confirmed back by all parties…..so who made this silly software? If you have a parent on a package, please check their statement each month, we have so many discrepancies it’s not funny. Home care also happened twice in one day for two hours by two different providers….it goes on and on. We don’t need this to have to deal with as well as our own problems and I have mum and dad to sort through too as they are concerned re their statement and have no idea of understanding it……Check your statements, put on calendar when care/help/support happened and for how long, and check, check, check…..

  4. taj July 21, 2015 at 4:09 pm #

    Move providers – many have. There is no excuse for poor financial management and planning

  5. jen June 20, 2016 at 9:18 am #

    Neil, have any of your supplier agreements changed in response to CDC? in that it seems now the consumer pays for such things as wound care etc…is that correct?

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