Is there a future for not-for-profit aged care providers in a consumer-driven market that seems made-to-measure for private operators?
Professor of social policy at UNSW Kristy Muir and aged care specialist John Picot from Grant Thornton Consulting spoke about what providers need to do to survive, and even prosper, in a radically altered business and cultural environment at a conference of aged care providers in Sydney.
The struggle to adapt to change
Speaking to Community Care Review ahead of his presentation at the ACSA National Summit, Mr Picot said the aged care sector, as with human services across the board, has experienced a progressive shift from the traditional faith-based model of delivery, to one where the government has picked up the social welfare banner and is contracting providers under a consumer-driven system.
Many NPF providers have struggled to adapt, he says.
“The not-for-profit sector has by its very nature been mission and purpose-driven,” Mr Picot said.
“The natural dynamics that you have in a market – commerciality, the need for marketing, the need for sales and a selling function that can articulate value – those sorts of scales are not just absent for the NPF sector but in some instances are seen as anathema.
“It’s been a very significant and painful change because it has been a shift from a culture which is quite maternalistic to one which is really very consumer and sales focused.”
Navigating the new order will be important for the NFP organisations that currently provide more than half of Australia’s home support and care services, with the latest ACFA report showing 65 per cent, or 453 of the nation’s 702 HCP providers, were NFP as of June 30 2017. In 2016-17, NFPs provided 69 per cent of CHSP.
Key to survival
Providers need to offer relevant services and understand their consumers, many of whom have come to care after some sort of crisis, such as losing a partner, suffering a fall or experiencing a progressive loss of function.
They also need to be efficient, and this means being more discerning about the services they keep and those they drop.
“Why should an organisation that also is providing clinical and therapeutic services also be trying to do other less complex service provisions when there are other private operators that can do it more efficiently and do a better job?
“That’s a decision (providers) have to make. They can’t try to be all things to all people.”
Battle for hearts, minds, trust and dollars
Mr Picot said reputational damage suffered by many providers over the last two years through exposure of critical failures in care or unethical behaviour like price gouging, can serve as a key differentiation point for NFP organisations.
Providers can use CDC to offer something different and better, but they need to win the trust of the consumer through evidence and messaging.
“The impact of the consumer holding the power to make decisions about the use of funds puts the onus on providers to win the hearts and minds and trust of the consumer market.
“Trust is also important because we’re not talking about just cutting someone’s grass or washing their dishes. We’re talking about very personal intimate experiences, somebody helping you shower, get dressed. This is a level of intimacy and sharing that requires a high degree of trust.”
A trustworthy alternative
The key to survival for NFP organisations is not just coming up with the goods, but being able to market themselves as a more trustworthy alternative to the private sector, Mr Picot says.
“I absolutely believe that the not for profit sector, whether faith based or secular, can be successful and should be successful, if for no other reason than to keep the private providers honest, and provide competition that is focused absolutely around the consumer and around their needs.
“If you think about a mission-based organistion, that’s where they started from, that’s where they came from. The opportunity is there for them is to own that space.”
The ACSA National Summit takes place in Sydney from September 3-5.