The aged care sector needs a standard operating model to deliver high quality outcomes under the regulations, writes James Price.
The industry needs a common approach to our systems and processes to help drive higher performance and a consistent outcome across different providers.
Under a single regulatory framework, there are many ways a provider goes about managing its people, systems and processes. As an outcome, we see variable results.
Poor performing organisations struggle to remain financially viable as they strive to maintain quality and achieve regulatory standards.
An Aged Care Operating Model (ACOM) would minimise variables using a common set of practices to facilitate a more efficient model, which supports higher care quality and commercial benefits.
Roadmap to efficiency
This approach to a common operating model is not unheard of. Many organisations have tackled the issue in different ways with great results.
For example, the enhanced Telecoms Operating Model (eTOM) was conceived in 1988 to facilitate the creation of interoperable products across telecommunication providers around the world.
The theory included a common approach to business to enable suppliers to build more cost-effective solutions that only needed configuring for each company rather than costly and time-consuming customisation.
Franchise models, such as for restaurants, also leverage a robust set of processes, procedures, policies, standards and training to ensure customer experience is consistent wherever you enjoy your meal.
Compare a Big Mac in London, New York or Sydney and you should have a similar experience.
The Volkswagen group manufactures automobiles around the world across several brands including Volkswagen, SEAT, Skoda, Audi, Porsche, Lamborghini and Bentley.
Whilst they all have separate identities and differentiated value propositions, there is a lot in common under the surface. Sharing the core and differentiating the experience is the key take away to a better consumer experience.
The eTOM (below) is the closest to regulated aged care, where a common set of practices serve to facilitate a more efficient model that supports higher quality and commercial benefits.
Arguably without a target operating model for aged care, it is incredibly difficult to drive consistent business outcomes.
We have the Aged Care Quality Standards to drive consistent quality outcomes, so perhaps it is time for the Australian aged care sector to develop a common operating model.
I see the Aged Care Operating Model starting with the identification of the highest performing businesses, processes and technology solutions in the aged care industry.
The industry doesn’t have a model like this in place that is visible or widely adopted but it does have benchmarks.
The industry relies heavily on benchmarks from various sources, and whilst useful, the key criticism of benchmarking is the use of averages and how that data is used without adequate context.
Averages serve limited purpose in moving an industry forward because it is difficult to build a business around an average. The average is the outcome of several inputs and variables and whilst interesting to compare, they can be distracting or to the detriment of a business.
For example if the average shoe size for an Australian woman is seven, it is simply not feasible to build a shoe business with that information.
In aged care, we also talk about average staff hours or ratios. These indicators are influenced by the model of care and the physical layout of a building. Outside of your own organisation, they are practically useless.
A better suited approach would be starting with the processes and how they are operated. Thereafter infuse technology where applicable and determine how many people are required to deliver the outcome.
With reference to an endorsed operating model, providers will be better equipped to drive more efficient processes with higher quality and with clearly defined business outcomes. The training of staff becomes more structured, which is better aligned to the established structured training enjoyed by clinical staff.
Looking at all of the staff across the aged care sector, they have skills aligned to their role and built up through education, learning and experience. We cannot always say the same for business functions and operations and as a result, we may employ more people than best practice would recommend.
A hypothetical case study
Picture a situation of two residential aged care providers with around 500 beds each across four and five facilities; both organisations are operating in metropolitan areas. One organisation is in surplus and the other is not.
The better-run provider is operated by a strong leader who drives compliance to key processes. All clinical decisions are owned at the local facility level and business processes orchestrated from head office but deployed in a common format at each facility.
They have 1.5 full time equivalent (FTE) staff in the finance team compared to 15 at the loss-making provider. If we look at the average it is 8.25 FTEs. Unsurprisingly, neither provider has eight staff.
If you apply this example across other business functions, across providers and the industry it is quickly apparent there are opportunities to improve if we adopt a process mindset for business services.
However it isn’t always that simple and there are a few notable exceptions including:
- where scale isn’t on our side, we might have to over allocate staff for small facilities to deliver on the target outcomes
- regional areas where the operating model resources are not achievable due to variations in staff availability and other challenges
- where we differentiate our service offering in the name of product positioning, we may have more concierge and lifestyle staff for a 5-star facility.
The last example cites a 5-star example, which, while a topic for another time, suggests perhaps a common operating model is the foundation for a star-rating system.
After all, it is the foundation for hotels an, like hotels, aged care needs strong foundations to deliver better care and better outcomes.
Is it time to talk about the Aged Care Operating Model?
James Price is co-founder of Mirus Australia