Aged care in a decade will look very different to now, writes Fiona Somerville, who offers a peek into what the yet-to-be-determined future may hold.
Imagine being an aged care consumer in 2027.
Funding for residential services has well and truly transitioned from being allocated to a provider to being distributed directly to a consumer. There have been no Aged Care Approvals Rounds (ACAR) for a few years and eligible consumers are allocated to a ranking system to get access to residential aged care funding.
As Commonwealth funding is now viewed as agnostic to care setting, it is allocated for care at home or in residential aged care. This most likely will play out in the form of an allocated amount much in the same way that Home Care Packages are funded.
The government-funded element of residential aged care will be the care component. This covers basic assessment, care and supports. Contributions to enter residential care will continue to be a part of the system. Anything else is customisable and dependent upon choice and capacity to pay. For those with the means to pay there will be the ability to charge additional fees.
Let’s assume there remains a process whereby providers of residential services are approved by the department.
Back in 2017 the number of providers was decreasing as the market consolidated; there were just 949 providers compared to over 3,000 operators 10 years prior. However in recent years to 2027 the number of applications for approved provider status has gone through the roof as new entrants seek to deliver residential care.
This has resulted in a large number of retirement villages becoming approved providers and property developers seeking to profit from the booming aged care market by building accessible housing options targeted at this group.
Purpose-built environments for our growing ageing population focus on personal space, privacy and, where relevant, a little bit of luxury. The government is happy with this as the estimated 83,000 places needed by 2027 are now available – just in a different format to a traditional aged care home.
Global giants such as Google and Amazon have invested in developing services resulting in remote monitoring, driverless cars, seamless hospitality services and robotics providing a supporting role to the complexities of an ageing population. Hospitals and medical clinics offer augmented reality assessments and appointments.
Traditional aged care homes have been rebuilt as consumers demand greater personal space, greater privacy and a higher level of hotel style services.
Thankfully the government has put in place provisions to protect the marginalised and there are services to meet the needs of our ageing population in rural and remote areas and for people with special needs.
There had been a slight decrease in demand for residential care and an increase in home care services in the early 2020s. Despite this the wave of ageing baby boomers is well and truly upon us.
Sadly there has been no cure for carer fatigue, incontinence or dementia and these three factors necessitate a move to residential aged care around now. Typically in 2027 this move will be for the last 12 months of a person’s life rather than the three years or so it was in 2017.
Choices
For the consumer there has never been so much choice. Having spent the past 10 years getting used to the fact that they will have to continue to fund their lives, many have worked until they are well in to their 70s. They have spent more time keeping active and taking care of their own health.
Having accessed a government assessment, the consumer will have paid for home care services in some form. Those with the greatest need will access government-funded packages however, those with means will likely bypass government funding and simply buy in services as required. Home care providers will have morphed into specialist providers able to manage complex cases for marginalised people.
The survivors of funded home care services will be those expert in complex case management, strong community connection to various special needs groups and use of technology to reduce the cost of service. Remote consultations and assessments will be the norm. Margins will be tight as every cent is needed to support this group to remain at home.
Despite efforts by government to educate consumers to plan for aged care, the baby boomers will have a much more independent focus and residential aged care will remain the last resort.
Once the need for residential aged care becomes clear, an assessment will result in a broad band of funding allocated to the consumer. The consumer will then decide where to spend it.
For some, traditional residential aged care facilities may be the only option, for others, innovative new providers may well be competing for potential customers. With funds following to the consumer, seniors will seek services that appeal to their own goals and preferences; many will not have personally experienced residential aged care.
An existing provider has the purpose-built home, the structures, systems and ideally the quality staff to support people with complex care needs. A new provider may tap into consumer preferences for location, style of accommodation and services offered but may be limited in actual aged care experience.
From here
No more ACAR will mean that the consumer is in the driver’s seat. What we have taken for granted as the obvious choice for the provision of residential care may not be what transpires.
While the big question remains – what will the industry look like in 10 years’ time – we know that consumers are increasingly seeking to stay at home for as long as possible. For those seeking to capitalise on consumer held funding for residential aged care there will be a shift to a truly contestable market.
Residential aged care providers will need to position themselves as expert, efficient and able to truly meet consumer preferences. This will involve greater scrutiny of quality measures as they relate to care, efficient staffing models to make sure the ideal level of resources allocated to direct care, a contemporary customer centric model and built environment that provides personal space and customisation.
Fiona Somerville is commercial director at The Ideal Consultancy.
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Nice work Nostredamus, you seem to have missed the most important element: Social connection.
You have described a very clinical world. Ah well lets see eh
Fiona,
You seem to presume the elements are all working together in an ideal (if clinical) world. Hard to anticipate that on performance. 2-3 new governments will come in with their brand of changes and cost cutting.
Finally, you need to keep your eye on average lifespans; growth is slowing substantially.
Certainly food for thought. Existing providers need to be ahead of the curve to anticipate and restructure ready for these changes.
Consumer Directed Care.
It’s the word on every street. But where is the corollary conversation about community and the power of the collective. The happiest nations on earth (notwithstanding the arguments over criteria) seem to have one thing in common; integrated, connected communities that understand,support and feed each other physically and spiritually. Some of the most successful senior communities in Europe are founded on these values too.
So all this talk of individual buying power and choice is OK but let’s also have a conversation about how Australia positions itself to value community in the face of all that baby boomers can offer to the generations coming behind and vice versa.
Governments and the community of aged care leaders should walk and chew gum at the same time.
I’d expect that some of our rural and our ethnic communities could show the way.
There are two very different worlds in this vulnerable sector. On the one hand there are those in the community like Diana and I who retain a traditional view. We see care as something an involved and caring community controls and manages for its vulnerable members.
On the other there are those who see it as an industry and part of the free market. Selling choices provides an opportunity to market many choices to anxious families driven by a desire to do the best for their ageing parents, but without the knowledge needed to be discerning. This is what is attracting providers, including four franchising multinationals to the sector.
The author has been a sales manager for a large market listed company, is a “highly experienced sales and marketing professional with extensive management skills”, has given talks to the industry on new ways of marketing in CDC and works as a Commercial director of The Ideal Consultancy, which provides “strategic and operational support to the aged care, retirement village and wider health industries” and which “strengthens your business”.
The views expressed are genuinely held and reflect the thinking behind the industry driven aged care roadmap that is sold to us by government as the future. With its financial resources the industry can sell its idealised vision in ways that those who see the world differently are unable to match. It sees marketing as a legitimate method of achieving its personal and political objectives.