Industry consultants are predicting intense competition between providers in home care with a range of new players seeking to enter the government-subsidised market.
Private providers, brokerage agencies and allied health services are among those applying for approval from the Department of Health to deliver home care packages. The new players are seeking to capitalise on the shake-up of the system in February 2017 that will see consumers free to choose their provider.
The number of approved providers has already increased by 15 per cent since the reforms were announced in the 2015 budget, according to figures supplied by the department.
A department spokesperson told Community Care Review it had received 112 home care provider applications in the last 12 months (1 July 2015 – 30 June 2016) and had approved 77 during this time.
Louise Greene, director of business improvement with The Ideal Consultancy, said private home care providers and brokerage agencies wanting to manage home care packages in their own right presented the most significant competition to current providers.
She said she was fielding the most number of enquiries from this group. “Brokered agencies will be the biggest challenge for approved providers because they already have the systems and processes in place to provide services; they already have staff and in a lot of cases they have quite strong relationships with the clients, stronger than the approved provider,” Ms Greene told CCR.
Interest was also coming from business-savvy entrepreneurs in industries such as food and childcare who were keen to pursue new business opportunities, as well as retirement village operators looking to provide services to their residents and large GP practices, she said.
Ms Greene said she was also working with aged care providers in regional towns that wanted to provide home care packages into their communities. These regional providers had the advantage of having a strong identity and local relationships to be able to find a local market, she said.
Like Ms Greene, Mark Sheldon-Stemm, principal of Research Analytics, said allied health businesses were also expressing an interest in becoming approved home care providers, especially in the context of an increased focus on wellness and reablement.
He said strong competition would come from labour hire companies that currently supply staff to aged care, home care franchise groups and residential care providers not yet delivering community care. Under the changes, existing residential care providers will be able to ‘opt in’ to provide home care as part of a simplified process.
“Many players are becoming very interested in this space, I think you will see a lot of disruption in the marketplace and new providers in there who will be competing with current providers on their services and price structures,” Mr Sheldon-Stemm told CCR.
He estimated populous states such as Victoria and NSW could see the number of home care providers jump ten-fold.
New CALD providers
Marisa Galiazzo, principal of Green Sea Shell consulting, said culturally and linguistically diverse (CALD) organisations were seeing an opportunity to cater to their communities and were applying to become an approved provider.
This was especially the case for new migrant communities, for example those from Indian and Filipino backgrounds, where services were not well established. While these organisations had limited aged care experience, they were able to deliver niche service and draw on community resources and networks, she said.
Ms Galiazzo said the streamlining of the approved provider process to focus on organisational capacity and governance rather than key personnel would support these smaller providers to enter the sector.
CHSP providers adding packages
Jonathan Pietsch, manager of Home Care Today, told CCR that attendees at a recent conference it held for new providers fell into three main categories – Commonwealth Home Support Program providers, residential providers and private fee-for-service businesses.
He said CHSP providers, which made up the largest group, were interested in adding home care packages to their existing programs so they could cater to clients as their needs increased.
Mr Sheldon-Stemm said he was also concerned about the length of time it was currently taking for the department to assess and approve applications. He said that some clients were waiting almost 12 months for an outcome.
Home care provider statistics:
- Applications received this year (January to June): 49
- Applications received in 2015-16 financial year: 112
- Approvals granted, January – June: 47
- Approvals in 2015-2016: 77
- Success rate for applications in last 12 months: 68%
SOURCE: Figures supplied to Community Care Review by the Department of Health
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