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Some healthy competition

Jim Toohey on some of the key challenges facing providers arising from the PC draft report

The recommendations of the Productivity Commission draft report highlight both the historical unfairness for providers and residents of recent policy settings and also the very significant challenges in the future.

Whilst many existing problems have been well understood by providers and government for some time, the fact is that the community generally does not understand the real cost of providing quality accommodation and care and the limits on providers to raise these funds.

In addition, the substantial regulatory burden the sector has operated under for decades, coupled with the constant and oh-so-convenient scapegoating of providers indulged in regularly by politicians and the media, has created a particular management ‘culture’ which needs to change.

Narrow interest will, of course, drive many of the reactions to these recommendations. However, any fair minded person would acknowledge that the abolition of a process by which determinations of the number of places a provider can operate based on considerations other than economic viability, competitive growth, development of new services and the encouragement of private investment, has to be a positive.

A competitive environment where flexibility and economic viability go hand-in-hand is inevitable and very much in the interests of residents and the wider community itself.

In addition, the community will rightly expect that these changes enhance rather than restrict access to services for people who require them and that a sound, quality safety net is in place for those with limited financial resources.

Whilst the sector will no doubt feel vindicated in the acknowledgement that what they have been saying for 10 years is correct, many will also be slow to understand the challenges which go hand-in-hand with the new opportunities.

Any mechanism which restores the normal economic and business drivers of competition, product and service development, flexibility and market-driven fee structures is well and truly overdue.

The sector must now start to adapt to dealing with prospective residents and representatives who, facing the obligation of meeting more of these costs themselves, will rightly demand much more in return.

They will be far less likely to settle for standardised accommodation and care choices or ‘one size fits all’ options. The development of new financial and service models which provide real choice represents an opportunity for those with a pioneering spirit, to differentiate their organisation and reap the benefits.

As noted recently in the Grant Thornton retirement village survey, the growing numbers of retirement village residents looking for genuine ‘whole of life’ care and accommodation solutions will seek out organisations who can provide it – hopefully without dual and often conflicting rafts of regulation.

To prosper in a future characterised by empowered and savvy consumers, the sector has to develop a multi-skilled and customer focused management culture at facility level.

Whilst there will always be a need for specialist clinicians in aged care, and these changes will not impact on that, facility managers will require broader experience in the delivery of competitive customer services, contract and financial negotiation abilities and the encouragement of a workplace culture which is service rather than task focussed.

Those who will thrive will possess excellent interpersonal and communication skills and be sensitive to the needs of the frail aged. They will have to understand the complexities of the relationship relatives enjoy with a provider and conduct negotiations accordingly. They will need to have a background which includes HR management experience and a record of growing a culture of ongoing customer service.

They will need to be adept marketers; identifying and actively promoting organisational strengths and unique service delivery features.

Facility managers and front-line aged care and retirement village staff are generally the first and easily the most important contact prospective customers have with aged care organisations. They are critical to reputational integrity and in aged care and retirement living, reputation is king.

This is true regardless of whether the organisation is a church and charitable provider or not.

An investment in finding and developing the right people to maximise the opportunities of the future is money well spent.

Providers should start to consider what other industries, even those unrelated to health or aged care, contain this skill mix we so desperately need and how to meld these attributes with a philosophy of care and compassion.

Jim Toohey is an aged care consultant and former CEO of a large private provider

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