Industry leaders talk the future of residential care

Government has said residential care is next up for reform, but providers say there must be discussion about how increased competition will affect rural providers, and what happens to residents when businesses fail.

In her address to Leading Age Services Australia’s Tri-State Conference on Sunday, the Minister for Aged Care Sussan Ley told delegates that residential care “needs to be the next area of reform”, saying she wants providers to be able to attract customers through price and service.

How a more competitive environment would impact providers dominated much of the conversation among aged care leaders on a panel session at the conference later that day.

CEO of Mecwacare Michele Lewis said aged care was entering an era of “brave conversations” about sustainability, change and collaboration.

Given she saw economic rationalisation as “ruling the day”, Ms Lewis expressed concern about the viability of the not-for-profit sector, stressing that older people needed to be able to have a choice to be cared for by a values-driven organisation.

She also said it would be likely that not-for-profit providers would need to be the ones to take up the care for the disadvantaged in a deregulated market, while still facing the same financial pressures as other operators.

“The return on the dollar becomes the basis for which people decide where they’re going to offer their services, and those that are vulnerable and poor, in the western suburbs, or in rural and remote communities where there’s little infrastructure, they’re the ones who are at risk,” she said.

Need to be ‘canny and smart’

Greg Pullen, CEO of Villa Maria Catholic Homes (VMCH), said not-for-profits needed to look to the privates in terms of business strategies to survive in a market environment. He noted VMCH was already looking to attract staff  who had worked in the private sector and to upgrade its facilities.

“We need to be as canny and smart as the privates, because that’s where the big competition is going to come from,” he said. “Unless our facilities are up to standard, we won’t be in the hunt.”

Neil Stubbs, CEO of the Forrest Centre, said competition was how aged care would see improvement, and that regulated systems could lead to bland offerings for consumers.

However, Mr Stubbs suggested that competition was likely to be unevenly spread across the country.

“In parts of Sydney and Melbourne, in capital cities, it will go gangbusters. It will be worthwhile for people to build brand new facilities, and places that have a bit of age around them will have real challenges,” he said. “Yet I don’t think we’re going to see the entry of operators into some of the regional areas.”

When businesses fail

Mr Stubbs suggested there needed to be more consideration of the role of government when less competitive businesses fail, especially in rural and remote regions.

“When an operator fails financially – who is going to be responsible for the placement of people?” he asked. “What’s going to happen when these people have paid bonds?”

Trevor Carr, CEO of LASA Victoria, also suggested that as the ageing curve was more advanced in rural and remote towns, providers in these areas may have trouble filling beds in the long term. He said it was unlikely a “cookie cutter approach” to reform would work in rural and remote areas, given a recent ACFA report showed many providers were already struggling.

However, Bronwyn Beadle, CEO and director of nursing at Nagambie HealthCare, said that deregulation for small rural providers was welcomed.

“It’s fantastic, because the ACAR for us is a bit like TattsLotto really. If you’re unfortunate enough to miss out on the TattsLotto numbers, you are then forced to seek out additional beds from bed brokers,” she said.

“It gives us opportunity to establish ourselves as a rural healthcare provider; as a boutique style service… it lifts us from a fairly draconian service delivery model.”

Ms Beadle suggested building collaborative partnerships with other service providers and working closely with the community was key to Nagambie HealthCare’s success as a rural provider.

Photo: Peak Multimedia

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