What if better client wellbeing is the secret to HCP?

The Aged Care Financial Performance Survey to March 2020 by StewartBrown shows more than 30% of HCP providers are losing money.

“…The financial performance of in-home care has deteriorated for the six month period …to March 2020. The operating results of the first 25% have been a deficit… for the last six month period”

And the situation is getting worse. Pricing pressure continues due to increased competition. The average revenue per client decreased by 5.69%. But even the best performers are suffering in the current pandemic. The result is remarkably bad because of clients having more than $8,000 in unspent funds on average. The average is up more than 15% over the prior year.

The Royal Commission into Aged Care Quality and Safety has been strident in its criticism of aged care providers, both residential and in home. The Commission suggests providers are not caring enough for clients.

The aged care system fails to meet the needs of its older, vulnerable, citizens.

We agree. But not because providers are not doing good work. It’s because providers are not doing enough good work. It’s about wellbeing. Home Care Providers need to do more and get paid more.

We estimate the additional variable costs would be in the order of 35% - 40% with the balance being profit.

This document introduces how home care providers can do more and get paid more to turn losses into surplus.

If people need care then how can there be any unspent funds?

Consumer Directed Care means consumers and their representatives create a plan with their provider ideally to get the full and best use of their support subsidies. So how can clients have any unspent funds?

• Are they assessed by ACAT for a higher HCP level than they need?

• Are they unaware of what their funds can be used for?

• Are they so grateful for any support they can’t ask for changes?

• Are they worried about keeping something aside for a ‘rainy day’?

• Are they in denial about their need and right to receive support?

We believe it is more likely that the problem is with providers. Each of the possible client issues is either amplified or eclipsed by a corresponding problem on the provider side. Providers are only geared up to offer a fixed set of services, are not sure about the eligibility of extras and are not confident about involving other providers. But most critically they fear making a surplus because of what they think it might say about them. They want to avoid being accused of taking advantage of clients by selling them into services they don’t need. The reality is their clients deserve a better life. And they need their home care provider to help them get it. If the priority is on the client’s wellbeing then its critical that providers support their clients to fully utilise the approved subsidies to maximise their quality of life.

How you can leverage our experience to guarantee results

It is easy to say: ‘Work out what to do to help clients get the most out of their unspent funds.’ It is harder to do this well. The core of our approach at CapFeather is to combine what your team knows about your clients with our expertise in customer experience innovation. We help you come up with lots of revenue options before executing lean market testing on just a handful, at small scale. This approach will create maximum cut through for low cost and least risk because it does not ask customers what they might like. It presents a new offer to learn how many customers really want to buy. Normally whatever you offer new has to be polished as you discover what customers really want. You can’t just ask them because in most cases they don’t really know. You can only really find out what they are happy to pay extra for. Did you need social media before you tried it? Do you need bitcoin now? Did you think GST would be a good idea?

We helped Wesley Mission Queensland identify 187 different ways they could increase their revenue in residential aged care (RAC). We have helped them narrow it down to just three options. Currently we are in the final processes of getting the first initiative into market. Wesley’s problem in RAC was not about using unspent funds. It was about dealing with the problem of the low levels of current government funding. This is unsustainable for their organisation. So no one thought it was a good idea to just hope the government was going to suddenly increase funding per resident. We think it is unlikely. For home care clients the funding situation is similar.

Phase two of the legislated changes to the HCP payment arrangements will see the government withhold unspent funds. This will be bad for your clients and for your organisation.

You can contact us to discuss how to solve this problem fast and cost effectively because customer strategy and CX is all we do.