New providers making moves into home care market

Industry consultants are predicting intense competition between providers in home care with a range of new players seeking to enter the government-subsidised market.

Industry consultants are predicting intense competition between providers in home care with a range of new players seeking to enter the government-subsidised market.

Private providers, brokerage agencies and allied health services are among those applying for approval from the Department of Health to deliver home care packages. The new players are seeking to capitalise on the shake-up of the system in February 2017 that will see consumers free to choose their provider.

The number of approved providers has already increased by 15 per cent since the reforms were announced in the 2015 budget, according to figures supplied by the department.

A department spokesperson told Community Care Review it had received 112 home care provider applications in the last 12 months (1 July 2015 – 30 June 2016) and had approved 77 during this time.

Louise Greene
Louise Greene

Louise Greene, director of business improvement with The Ideal Consultancy, said private home care providers and brokerage agencies wanting to manage home care packages in their own right presented the most significant competition to current providers.

She said she was fielding the most number of enquiries from this group. “Brokered agencies will be the biggest challenge for approved providers because they already have the systems and processes in place to provide services; they already have staff and in a lot of cases they have quite strong relationships with the clients, stronger than the approved provider,” Ms Greene told CCR.

Interest was also coming from business-savvy entrepreneurs in industries such as food and childcare who were keen to pursue new business opportunities, as well as retirement village operators looking to provide services to their residents and large GP practices, she said.

Ms Greene said she was also working with aged care providers in regional towns that wanted to provide home care packages into their communities. These regional providers had the advantage of having a strong identity and local relationships to be able to find a local market, she said.

Mark Sheldon-Stemm
Mark Sheldon-Stemm

Like Ms Greene, Mark Sheldon-Stemm, principal of Research Analytics, said allied health businesses were also expressing an interest in becoming approved home care providers, especially in the context of an increased focus on wellness and reablement.

He said strong competition would come from labour hire companies that currently supply staff to aged care, home care franchise groups and residential care providers not yet delivering community care. Under the changes, existing residential care providers will be able to ‘opt in’ to provide home care as part of a simplified process.

“Many players are becoming very interested in this space, I think you will see a lot of disruption in the marketplace and new providers in there who will be competing with current providers on their services and price structures,” Mr Sheldon-Stemm told CCR.

He estimated populous states such as Victoria and NSW could see the number of home care providers jump ten-fold.

New CALD providers

Marisa Galiazzo
Marisa Galiazzo

Marisa Galiazzo, principal of Green Sea Shell consulting, said culturally and linguistically diverse (CALD) organisations were seeing an opportunity to cater to their communities and were applying to become an approved provider.

This was especially the case for new migrant communities, for example those from Indian and Filipino backgrounds, where services were not well established. While these organisations had limited aged care experience, they were able to deliver niche service and draw on community resources and networks, she said.

Ms Galiazzo said the streamlining of the approved provider process to focus on organisational capacity and governance rather than key personnel would support these smaller providers to enter the sector.

CHSP providers adding packages

Jonathan Pietsch, manager of Home Care Today, told CCR that attendees at a recent conference it held for new providers fell into three main categories – Commonwealth Home Support Program providers, residential providers and private fee-for-service businesses.

He said CHSP providers, which made up the largest group, were interested in adding home care packages to their existing programs so they could cater to clients as their needs increased.

Mr Sheldon-Stemm said he was also concerned about the length of time it was currently taking for the department to assess and approve applications. He said that some clients were waiting almost 12 months for an outcome.

Home care provider statistics:

  • Applications received this year (January to June): 49
  • Applications received in 2015-16 financial year: 112
  • Approvals granted, January – June: 47
  • Approvals in 2015-2016: 77
  • Success rate for applications in last 12 months: 68%

SOURCE: Figures supplied to Community Care Review by the Department of Health

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Tags: community-care-review-slider, competition, Home Care Today, home-care-packages, louise-greene, marisa Galiazzo, mark-sheldon-stemm, market,

7 thoughts on “New providers making moves into home care market

  1. When you work in this industry for any length of time you quickly realize the difference between organisations who are there to make a difference and those who want to make a quick buck. The clients know it as well. Quality is what is going to win this race not size, not how big your buildings are, how many cars you have. Consumers want people in their home who they feel safe with, can trust and build a relationship with. Contract staff constantly coming and going are not going to have any loyal customers. Whats happening to the people who are not getting packages or CHSP but also need help?

  2. “Many players are becoming very interested in this space…” Yee-Haa! The Guv’mint is giving away free money.

    No aged care experience? Who cares…they’re just old people..

    No English? No sweat, we’ll find you a ‘niche market’

    Taking too long to approve that ten-fold increase in providers? Damn regulations. Just move out of the way and let us get our snouts in the trough.

    Of course, every one of these operators will be ethical, upright and honest…right up until either they go broke and leave a trail of fleeced and vulnerable clients in their wake or government wakes up and shifts the goal posts again.

    This smells just like the home insulation scheme from a few years ago.

    Back then, the suburbs were invaded by utes full of unqualified installers. This time it’ll be Corollas full of unqualified carers.

  3. Getting to the right business model that doesnt just exist for the aquisition of funding and profiteering will be the challenge. Sure providers need to make a dollar. But if care is compromised, I agree that consumers will see right through these tactics and then down the goes the ship. 

    Its time there is more value based leadership shown by those in aged care. Choose a sustainable way of delivering quality care and make sure your staff are selected against the highest standard. There are plenty of aged care workers who really do make a difference. Bring on the change with a balanced commercial model, a business ethic and the best staff possible.

  4. Small community based NFP providers are being squeezed out of the market with reductions in funding and over-regulation. Don’t dare say this isn’t intended because it surely is…the government wants their share of taxation and to control this growing domain of service provision.

  5. This open market approach is nothing new, we have seen similar in private health, pathology, and disability employment or supported employment services. The number of providers rapidly increase, then rapidly shrink to a small number of formal operators. There is little formal research that indicates quality of care is impacted but this is more due to the lack of research than there being no impact. Small providers cannot exist apart from in a purchased brokerage sense.

  6. The $10 plus daily fee is not being charged by some providers.why should I have to pay it to my provider?

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