Develop reform response now, providers told
Providers need to develop their ‘game plans’ now in order to survive and compete in the reformed aged care marketplace, experts told the Leading Age Services Australia Queensland conference.
Providers need to develop their ‘game plans’ now in order to survive and compete in the reformed aged care marketplace.
That was the message for providers who attended Leading Age Services Australia Queensland’s conference on the Gold Coast yesterday, with numerous presentations highlighting the urgency of adopting strategic and comprehensive organisational responses.
“The elephant is in the room and its time we discussed it,” said John Cleary of Blue Chip Consulting Group, who said while aged care boards traditionally had ‘trustees’, they now needed ‘strategists’ who could envision and execute the transition to the new framework.
Discussing potential responses to the current challenges, Mr Clearly described four types of organisations.
The big players, or what he called “the craftsmen” would leverage their brand to deliver best value in terms of what they could procure and produce, while the “opportunists” would enhance their business by reforming back of house operations, such as by sharing services. The “realists” would decide the future aged care landscape was too difficult and would exit the market. This was “a tough decision but a reality for a large number of organisations,” he said. The fourth group would ignore the reality, continue with business as usual, and eventually be forced out by the market realities in subsequent years.
Elsewhere, Patrick Herd of Community Business Australia, told the conference that aged care was moving from a constrained market to a ‘free managed market’. While there would be increased competition in the new market, the government would still have control through mechanisms such as the ACAT and ACAR process. It was important for providers to understand the realities of the new ‘free managed market’ and how to operate in it.
He said the “new paradigm” was the result of 10 years of reports, such as the Productivity Commission’s 2011 inquiry, and the motivation for reform was fundamentally driven by governments realising the need for a more sustainable way to pay for the ageing population.
“How do they create more efficiencies in the system? They get you to compete with each other,” Mr Herd said. “And not just compete with local providers, but with people from the NZ, the UK.”
Mr Herd said the harsh reality for providers was that governments didn’t care about their future. As the reform experience in the UK had shown, if a provider went under, there were others which would take its place, he said.
“If you don’t do it, they’ll get someone else. If someone falls over, there’s five others waiting to take their place. So you need to ask, in this new market can I survive and flourish, because it’s going to be competitive.”
In the marketplace, providers needed to be innovative with their service models. There were leading providers demonstrating what could be done, and there were opportunities to learn from each other, he said.
The good news, said Mr Herd, was that in the next 15 years, there would be an explosion of aged care services required. “Knowing where the opportunities are and exploiting them is the challenge.”
