A world where consumer is king

ANALYSIS: Greater consumer choice is bringing opportunities and challenges for the retirement living operators. Andrew Giles outlines five fundamental changes shaping the sector.

Senior friends sitting together in park

Greater consumer choice is bringing opportunities and challenges for the retirement living operators. Andrew Giles outlines five fundamental changes shaping the sector.

The seniors living and aged care industries are now beginning to come to terms with major policy reform in how people can access care in the setting of their choice.

As a result, over the past three years in our work with clients across Australia we have seen organisations reinvent their approaches in response to a more consumer-oriented market. We are beginning to see a great deal of business innovation, which will undoubtedly mean a greater level of choice and service outcomes for older people.

This brings with it numerous opportunities and challenges. The following five observations are what we see are fundamental changes to the industry that are paving the way for a new era in accommodation and care for our rapidly ageing population.

1: Customers exercise choice

Whilst the government’s reform is barely in full swing, we are already seeing customers exercise more choice. More and more our sales teams are encountering a highly educated customer who is looking at independent living in the context of ‘what happens next’?

Put simply, every organisation must have a clear and well-articulated answer to this question (that highlights a point of difference and unique advantage), or suffer the consequence of the consumer heading down the road to a competing operator that does have that answer.

2: Customer centric, servant leadership

One Fell Swoop took 20 organisations to the United States in late 2014 to understand innovation in accommodation and care delivery in more than 25 communities and businesses.

Perhaps the key takeaway was the core focus (whole of organisation) approach to customer service and meeting the needs and wants of the client, rather than a clinical care approach. This is not to say that clinical care wasn’t a major area of importance.

Rather, it was a given that clinical care would be provided as the minimum standard and that the unique advantage of each operator was in how exceptional its customer service outcomes were. If not, people have the freedom to get what they want down the road. We are sure that this will be the case in Australia very soon and we must be ready.

3: It takes a village

The move to home care as the solution to increasing the ability of people to access care is pragmatic and responsible by government. We all agree that people must have a care pathway and greater choice to access without having to move from the home they love.

However, this brings with it one major flaw. As people age they need greater oversight and and social support. A home care model has the potential to greatly escalate isolation, loneliness and the range of mental and physical health issues that emanate from this.

This could be a major advantage to both retirement living communities and care homes. Socialisation – both passive and active – is a key element of the offer. Each day operators facilitate tremendous social interaction between residents, families and staff. This is an area that, for operators, can be promoted as point of difference and, in a predatory marketing sense, can be offered as a true advantage in selling the proposition.

Perhaps we as an industry have never truly valued the great outcomes we can deliver to people as they age via a social model of care and interaction.

4: Integrated care offer will grow

Once upon a time there was retirement living and there was care. Never the twains shall meet! I can recall being at conferences where there was outcry and fierce debate about ever integrating what was a discretionary lifestyle choice (in moving to a village) with a care home move (that was often seen as a terrible end-of-life outcome that no one would want to face).

Often it was said that no resident wants to see where he or she are going. Many of us questioned this. In the contemporary context we have greatly underestimated the foresight and intelligence of the consumer that they don’t understand the issues they will face in the future – both opportunities and challenges.

Thankfully this is rapidly changing. We see not-for-profit providers, who were for the most part traditional aged care, bolting on a retirement living option next to a care home to offer a seamless pathway (if indeed the resident ever needed to progress to a higher care environment, which is happening less and less).

The private sector has also responded by developing partnerships and integrated on-site care to a retirement living community. The no-go zone of care is now being embraced by operators across the sector by understanding that support and care pathways are critical to the psychology of an older person in having greater certainty and control over their future.

5: Industry restructure is happening now

The last issue that is interesting, particularly in the context of the key larger players in the market and how this may shape future provision, is the continued rise of church and charitable and not-for-profit organisations. They are investing heavily in independent seniors living – many at the premium end of the spectrum.

One Fell Swoop is currently working on premium projects that are in excess of $500 million in value alone. Several of these are integrated with a premium aged care offer that provides a seamless pathway for the consumer and gives residents and their families some peace of mind that there will be no need to move again. Ten years ago we would not have thought this possible.

Also of note are the recent large-scale acquisitions in the sector. The purchase of the high-end Retirement Alliance and Waterbrook village portfolios has, in our view, marked a significant shift in the sector where a large global organisation (in Lend Lease) has seen merit in a premium, hospitality retirement living offer as a key plank to its future growth strategy.

Where this will end up is unknown. However, what is clear is that it is a very exciting time to be involved in our sector.

Andrew Giles is managing partner of One Fell Swoop, a national consultancy advising on aged care and retirement living.

Tags: andrew-giles, consumer-choice, consumer-directed-care, one fell swoop, retirement-living, slider,

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