Aged care organisations could look within for new income streams
Not-for-profit aged care organisations can tap into their existing resources to develop additional services that generate sustainable sources of income, according to a financial services expert.
Not-for-profit aged care organisations can tap into their existing resources to develop additional services that generate sustainable sources of income, according to a financial services expert.
For aged care providers to succeed in the increasingly consumer driven marketplace they need to be far more competitive with their service offerings to meet current and future preferences of older people, said Lali Wiratunga, national manager of the Davidson Institute and Social Sector Segment at Westpac.
Crucial to managing the transformational changes taking place in the aged care sector are the organisation’s key resources, he said.
“People, processes, systems, leadership and culture – all the resources your organisation has combine to deliver your service,” Mr Wiratunga told Australian Ageing Agenda.
Mr Wiratunga, who is a presenter at the Better Boards Conference this month, said an aged care organisation could explore offering non-traditional products and services aligned to their mission as well as the consumer’s.
This might include supports to age well and remain independent and socially engaged, he said.
For residential aged care facilities, additional amenities priced accordingly, such as gyms, pools, restaurants with flexible dining options and allied health services, were forms of income generators that made sense to customers, Mr Wiratunga said.
“You don’t have to operate them yourself but organisations that are looking at building or have room to build could think about ancillary service providers that might want to rent space.”
The aged care organisation then became a landlord for part of their revenue, he said.
Mr Wiratunga said an example from the global marketplace was aged care providers targeting community living for active people, including those who had downsized and moved into retirement villages, with lifestyle services, such as Tai Chi or painting, for example.
“The service might not be the all-encompassing revenue generator but it may be things that delight and maintain customer engagement… Those additional services could end up being quite a vital part of the overall value proposition,” he said.
Products and services to attract future aged care customers could include wearable technologies or educational video content and nutritional information delivered through online newsletters, for example, he said.
“Making sure future customers know that you as a provider have that aspect to your proposition – not just the physical environment, not just the personnel who can provide me with care when I am aged and in need of physical care, but also learning.”
Strategic innovation was an integral function – not a one-off activity – that required a multi-functional approach bringing together the resources, assets, capability and discipline of an organisation, said Mr Wiratunga.
“There are people in your organisation who represent those resources and they should be empowered to embark on a course of action where we know their ideas will be developed, which could drive new business growth.
“When they do this there are chances they might take some risks and so … we have to be willing to test and learn,” he said.
Strategic innovation challenged an organisation to participate in open-minded exploration of what was possible, Mr Wiratunga said.
“You need to have a receptive mindset.”
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