Home | Industry+Policy | Inside the latest aged care mergers: Mercy Health, Benetas

Inside the latest aged care mergers: Mercy Health, Benetas

Four Victorian aged care providers became two this month.

Mercy Health and Southern Cross Care (Vic) became fully integrated on July 1, the same day Benetas and Macedon Ranges Health amalgamated.

Adjunct Professor Stephen Cornelissen, chief executive of Mercy Health Group, said the new organisation’s years of experience will enable it to better respond to the changing needs of Australia’s ageing population and public funding arrangements.

Southern Cross Care (Vic)’s 12 aged care homes have been rebranded as Mercy Health. For now, home care services will continue to operate under the Southern Cross Care (Vic) brand.

Meanwhile, Benetas and Macedon Ranges Health has spent more than seven months working towards its amalgamation, with all facilities to retain their branding.

Benetas has commenced a process to invest $1.2m into upgrading facilities, while a further $60 million will be spent over the next eight years to upgrade, expand and redevelop Macedon Ranges Health’s facilities and services.

Aged Care Insite spoke with Cornelissen from Mercy Health and Benetas chief executive Sandra Hills to find out more about merging providers and how they navigated staff concerns and client expectations.

Was there much trepidation or worry among staff?

SC: I think with any merger, staff are naturally going to be worried about their roles and their future with the organisation. This is especially the case with back office and support services whose jobs are not always able to be guaranteed given economies of scale achieved through mergers. To help with morale, we tried to be as open and honest with staff from the moment we announced we were exploring a merger with Southern Cross Care (Vic). We did extensive consultation with staff regarding any potential changes to their roles, and this was carried out in stages. Of course, we did not get it right all the time, but I do believe we managed it as best we could.

SH: Benetas and Macedon Ranges Health (MRH) management and staff worked closely together prior to, and during the amalgamation process, to ensure that staff have been kept informed every step of the way.

Just prior to July 1, Benetas conducted a staff pulse survey to assist in gauging sentiment of the amalgamation process. The results showed that to date, respondents were feeling positive with 94 per cent of respondents believing the amalgamation has gone well so far and 92 per cent believing it will be good for clients.

How did you go about communicating the decision and all of the subsequent steps with staff?

SC: Our aim was to keep Mercy Health and Southern Cross Care (Vic) employees informed at every stage of the merger process.

We did this through:

• fortnightly (at least) email updates
• a dedicated email address for staff to ask and have questions answered, and to share their feedback
• roadshows by the leadership team to all Southern Cross Care (Vic) aged care homes and community services offices.

SH: The decision to amalgamate was based in part on a MRH member vote in the first instance, and a highly successful engagement process was conducted to ensure all stakeholders, including staff, were appropriately informed and understood the proposal.

Once a successful member vote occurred, representatives from MRH and Benetas’ executive teams developed an engagement and communication plan that included regular briefing sessions for employees and management continued to maintain a strong presence and availability on site at MRH to promptly assist with any employment related queries. This has been supported by a dedicated intranet site and regular newsletter updates, including video blogs from management to ensure staff are fully informed.

Hills with Don Tidbury, former chief executive of Macedon Ranges Health. Tidbury will join Benetas as general manager primary care, which will see him continue to be part of the provision of services for the region. Photo: Supplied

Stephen, what else was chief among your priorities in the past 18 months?

SC: Our main priority was to ensure a smooth transition to the one organisation so there would be minimum disruption to our aged care residents and home care clients.

This transition involved our frontline and support teams and included modifying existing systems and processes such as models of care, supplier agreements, workforce needs, payroll and digital networks.

And Stephen, what challenges come with rebranding, specifically in terms of current residents and potential clients?

SC: All Southern Cross Care (Vic) residents and clients received a letter after the merger was announced advising them that the management and name of the service may change, however their level of care would not.

During the transition process, we used a ‘boilerplate’ statement in Southern Cross Care (Vic) advertisements and correspondence explaining that the organisation was merging with Mercy Health.

Southern Cross Care (Vic)’s 12 aged care homes have been rebranded to Mercy Place homes with each site retaining references and recognition of the Southern Cross Care (Vic) heritage. For the time being, home care services will continue to operate under the Southern Cross Care (Vic) brand.

Cornelissen with Mercy Place Keon Park service manager Nilu Morawaka and Knights of the Southern Cross State Chairman Tom Brodie. Photo: Supplied

Sandra, you will be using $60 million over the next eight years to upgrade the facilities and services that Macedon Ranges Health provides. How will the money be used?

SH: Benetas will invest $60 million-plus in MRH over the next eight years on:

  • An up-front initial investment of $1.2 million in MRH’s existing facilities and infrastructure over the next two years
  • Redevelopment of The Gisborne Oaks as a new, state-of-the-art 130-bed residential facility, expected to open in 2022
  • Building a best practice residential retirement village
  • Growth of MRH’s primary care, community and home care services
  • Growing over time, the number of local jobs and employment opportunities in the community
  • Ensuring the delivery of high quality for purpose services for all, including those most vulnerable in our community

What does your organisation’s footprint look like now?

SC: In any one year, Mercy Health will now support and care for almost 3,000 people who live in our 35 aged care homes, partner with more than 8,500 home and community care clients and maintain 409 retirement living units and apartments.

Mercy Health also offers acute and subacute hospital care, mental health programs, specialist women’s healthcare, early parenting services and palliative care.

SH: After less than one month into our amalgamation, Benetas and MRH are in the early stages of the integration however the long term vision is to build a best practice residential aged care facility and retirement village for the Macedon Ranges region to support the growing number of people aged 80 and over. Benetas will also be investing in and growing MRH’s extensive primary care, community and home care services.

For Benetas, the amalgamation extends our suite of services of home care, retirement living and residential aged care to the northwest region and allows us to expand into the area of primary care as a service opportunity. We have an additional 160 staff and the same again in volunteers and all are dedicated and experienced contributors to us achieving our joint vision for the amalgamation.

What does the merger signal in terms of where the two providers were at the time of the announcement and where the new organisation is heading?

SC: In recent years, the aged care sector has been impacted by various government reforms and market changes in response to a rapidly ageing population as well as changing consumer behaviours and expectations.

Our combined scale gives us greater stability in the market, enabling us to continue our mission of caring for those in need and supporting people to age well, stay connected and fulfil their hopes and dreams.

Demand for aged care is set to surge in coming years, along with changing expectations of what it means to grow old. Mercy Health is well positioned to progress our shared mission to bring God’s mercy to those in need, including our residents, clients, their families and communities.

SH: MRH is committed to providing services for the local area in the long term. Many small aged care and community health providers face an uncertain and challenging future. MRH chose to seek an opportunity with another values based, for purpose organisation to ensure the sustainability and continued growth of services to meet the current and future needs of the Gisborne and Macedon Ranges community.

In May 2017, MRH wrote to members informing them of the MRH Board’s decision to commence a due diligence process with Benetas to establish a best practice, integrated aged care community in Gisborne.

The process confirmed that an amalgamation best positioned MRH to achieve a shared vision of an integrated health and aged care community in the Macedon Ranges. With over 70 years’ experience in aged care, Benetas had the capacity, resources and history of honouring its undertakings, respecting community expectations and delivering world class aged care facilities.

Over the past seven months and more, our respective people have worked alongside one another, preparing for the amalgamation and the integration phase that is to follow.

Throughout this process, we have seen first-hand that Benetas and MRH are truly united in our strong community values and our unwavering commitment to the care and respect of our residents, clients and staff.

We share a vision of delivering high quality not-for-profit services for all in the region including those most vulnerable in our community, while investing in services to meet growing needs and creating local employment opportunities.

We are also in the process of establishing a Community Advisory Committee to maintain a strong connection with the local community. The committee, through its local representation, will advise MRH and Benetas on emerging community healthcare issues, provide feedback on service delivery and assist with planning on new facilities.

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