Aged care providers and consumers continue to face a raft of changes as part of the Living Longer Living Better package of reforms passed by the Federal Government in 2013.
These aged care reforms have been introduced in phases and have so far included:
- Consumer Direct Care (CDC) for Home Care packages
- Introduction of My Aged Care website
- Establishment of the Aged Care Financing Authority (ACFA)
- Introduction of Refundable Accommodation Deposits (RADs) and Daily Accommodation Payments (DAPs)
These additional reforms are currently being introduced or considered:
- CDC for all existing Home Care Packages – designed to give consumers greater choice by allowing them to decide what types of care and services they access and how those services are delivered.
- Conversion of HACC (Home and Community Care) to the Commonwealth Home Support Program – which aims to assist older people stay independent and in their homes and communities for longer.
- Unregulated Home Care Packages
- Possible integration of Home Care & Commonwealth Home Support Program – catering for older people who can mostly cope living on their own through to those who have complex home care needs
- Possible deregulation of Aged Care licensing – which will open the sector to more competition and the need for aged care services to become more customer-centric
What aged care providers need to do
Businesses involved in aged care have already started to evolve to meet the changing needs of Australia’s ageing population and take advantage of the opportunities created by the reforms.
Not-for-profit providers will need to consider adopting a market-based mind set and approach towards their operations ensuring that a commercially viable business model is in place. In a consumer-driven market, providers will need to build reserves for continuous capital improvements to ensure their facilities and services are competitive and comparable to industry benchmarks.
All aged-care providers will need to develop systems and processes that best cater for the changes.
Mergers & takeover activity increasing
The aged care reforms may also lead to a number of mergers and takeovers both in the for-profit and not-for-profit sectors. Activity has already picked up momentum since the first reforms were introduced, with organisations that don’t specialise in aged care choosing to sell their facilities to other providers. This trend is expected to continue as consumer-driven aged care will require specialised and committed providers in order to compete in the market.
The Government’s aim is to transform the aged care industry into a sustainable market based industry. Time will tell whether this will lead to a market dominated by large providers or whether smaller operators will be able to compete and thrive.