The aged care value proposition

To survive the new environment, aged care providers need to increase their investment in a skilled and educated workforce and not be afraid to spruik the real value of the services and quality they offer, conference delegates were told this week.


Domain Principle Group CEO Gary Barnier says it is important for aged care providers to communicate to consumers the real value of what they offer

By Natasha Egan

Knowing the real value of your service, being able to communicate it to the market, and investing in your workforce will be essential to successfully financing aged care in the new environment, according to two presentations at Catholic Health Australia’s health and aged care conference this week.

Gary Barnier, CEO of Australia’s largest privately owned aged care provider Domain Principal Group, and Productivity Commission Deputy Chairman, Mike Woods, offered their insights on meeting the challenge of aged care finance at the conference in Melbourne on Monday.

Mr Barnier said in addition to having a clear mission and strategy, which together “get you up in the morning and outline your goals”, the next critical element was delivering recognised value to the customer.

“For me I think this concept [of value] is absolutely essential for a viable and flourishing sector,” Mr Barnier said.

“This strength is one of my single biggest concerns right now. I‘m frightened consumers don’t see the value.”

In addition to providing good accommodation and care, aged care homes provide a social setting for isolated people, help families reconnect and give people moments they thought they might not ever get again, Mr Barnier said.

“We’re going to be standing in front of our consumers and saying, you need to pay us more.

“The government has set a framework that means some of that [money] is going to have to come from [consumers] and I don’t know how ready we are for that conversation,” he said.

Productivity Commissioner, Mike Woods echoed the importance of providers being able to describe the value of their offerings, particularly in a world where care recipients are more informed about their care needs and how they and government will pay for services.

“You have to know what is the value of what you are offering. You have to know and understand your business, your skills, your assets, and the value package that you are offering to people,” Mr Woods said.

In coming years as aged care moves away from a rationed system to an entitlement model, it will not mean there will be unlimited funding, he said, but it will impose increasing discipline on government to specify the care and the financial criteria that lead to people receiving subsidised care.

User payments from those with means are a valuable tool that can empower care recipients to consider the value that they, and the taxpayer, pay for services, Mr Woods said.

Workforce matters

Workforce was another key area both speakers flagged as critical to the financing picture for aged care.

Mr Woods said that, with the reduced workforce participation that comes with an ageing population, it will be necessary for providers to invest in their workers to secure them.

“Labour will become an increasingly scarce commodity. Trained skilled labour even scarcer.

“The smart thing to do is get your workforce educated, get them committed to your organisation and to the value that you’re offering to your clients,” Mr Woods said.

Similarly, Mr Barnier talked about unlocking productivity by investing in staff.

“High staff turnover creates duplication and waste because you have to re-educate,” he said.

Mr Barnier, whose organisation has signed up to the Workforce Compact, said aged care workers deserved to be paid more.

“But more importantly they deserve to enter a sector where they can achieve social elevation.”

This is why Domain Principle Group supports the wages compact as well as education initiatives, he said

“And almost most importantly,” Mr Barnier said, “that’s why we will seek to charge the consumer more. Because we think we need more to do more education with our staff and to pay them a bit more.”


Tags: catholic-health-australia, cha-conference, gary-barnier, mike-woods,

1 thought on “The aged care value proposition

  1. I think Gary sums things up nicely with his comment “We’re going to be standing in front of our consumers and saying, you need to pay us more.” Understanding the value of your service and helping people understand “why should I choose you” will be even more imperative as our potential new residents demand (quite rightly) to be very clear about what they are getting. Organisations that have taken a structured and considered approach to their future, their business strategy, and underpin this with a robust sales and marketing strategy will do well. Make sure your tactics support your strategy. I wish I had been there for the presentation!

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