Bolton Clarke’s Steve Muggleton: no confidence in funding – size and diversification key to weathering COVID-19 storm

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With many operators hitting pause on development pipelines for the foreseeable future, you would expect that Bolton Clarke – one of Australia’s largest Not For Profit aged care, home care and retirement living providers – would be following suit. But CEO Steve Muggleton says the organisation is forging a different path.

Formerly the CEO of the Victorian based RDNS and Queensland’s Blue Care, Steve became CEO of Bolton Clarke in 2015 when RSL Care merged with the RDNS to create a billion-dollar business. Rebranding as Bolton Clarke in 2016, the group has since expanded its operations, buying the Aged Care Channel (now Altura Learning) and moving into the Chinese and New Zealand markets.

Today, Bolton Clarke provides four million home care visits a year to over 130,000 clients around Australia.

The organisation also has 24 residential aged care homes and 25 retirement villages plus a $600 million capital works pipeline of 16 projects on the way – and despite the hit from COVID-19, they have not put these on hold.

Five care communities in Shanghai

Artist’s impression of the Queen Street Development on the Gold Coast.

Steve – who is also a LASA board director, a member of the Ageing Asia Advisory Board (Singapore) and Co-Chair of Trade Investment Queensland’s Health Export Consortium  – tells us Bolton Clarke is continuing to advance on its joint venture in Shanghai with a Chinese partner which will see 1,200 aged care beds and 915 independent living units built across five continuous care communities.

They are also moving forward on their Australian developments including a co-located retirement village and aged care home in the master planned Queen Street Village mixed-use development on the Gold Coast.

Focus on co-located developments

The group also has two more greenfield sites in Queensland – a luxury retirement village at Bundell and another at Cleveland in bayside Brisbane – plus two more in Melbourne – the Europa on Alma retirement village development at St Kilda and another site at Bundoora – and two Western Sydney sites, an aged care home at Campbelltown in Western Sydney and a retirement village at Westmead.

“We believe there is a strategic advantage in having RACS and RVs co-located with home care supporting them,” Steve said, “and it’s no secret that we’ve been successful with that model and its served us very well.”

Artist’s impression of the Europa on Alma development in St Kilda.

No confidence in current funding model

However, the CEO emphasises that this pipeline is not a function of confidence in the current funding model.

“Our thinking is that it [the funding]has to change at some stage,” he said, “and also reflects what we think will be the demand in the future.”

Steve credits Bolton Clarke’s size and diversification for its ability to ‘weather the storm’ of COVID-19.

He says many people would be unaware of their other programs, for example, they run the Pregnancy, Birth and Baby helpline for the Government’s healthdirect service, which has allowed them to keep staff and redeploy them if needed.

Consolidation of the sector “inevitable”

Unsurprisingly, he believes further consolidation in the sector is “inevitable” given the increasing amount of compliance for operators.

“Some of the changes such as the new reporting regimes just make it really hard for smaller operators to adapt and put in place new systems,” he said.

“There are some advantages in being larger.”

Funding situation needs to be resolved

However, the CEO says the financial stress on the sector still extends to Bolton Clarke’s operations.

“We are coping with a significant amount of change. We have had four Ministers in five years, seven new regulatory standards and 35 reviews and enquiries on top of inadequate indexation and funding so it’s becoming tough,” he said.

He adds that the funding situation needs to be resolved now as the country moves into the ‘post-COVID’ world.

“We need to do more to reward, recognise and keep our staff,” he said.

$3 billion a year to adequately staff sector

Steve says Bolton Clarke has been working on its workforce modelling going into the future – and he is a supporter of Professor Kathy Eagar’s analysis for the Royal Commission that residential care is completely understaffed.

“But the funding means we can only pay up to levels staffed for three hours…it should be at least four hours per resident per day given the frailty and dependency of residents.”

Referring to Professor John Pollaers’ workforce strategy, he estimates however it would take another $3 billion a year just to bring the sector up to adequate staffing levels.

Royal Commission as catalyst for change?

“I am hoping the Royal Commission might be the catalyst for change to make the sector financially viable. Otherwise, we might face the case of more providers having to shut up shop.”

“That would have severe consequences for the health care sector and – it’s sad to say – might finally attract sufficient action and attention from the Government.”

In particular, Steve also calls out the 120,000 older Australians waiting for a Home Care Package.

“The fact that 28,000 people died in the queue in the last year is a national disgrace,” he stated.

“That they are not being given higher priority given their vulnerability and exposure to things like COVID speaks for itself.”

$5 million in COVID costs – and counting

The pandemic has also still come at a cost for the provider, with Steve estimating they have lost $5 million because of staffing and PPE costs and loss of revenue from empty aged care beds.

The provider freed up beds in each of its homes to be able to quarantine residents if necessary, which saw occupancy drop from 95% to 92%.

While they had a drop in referrals for their home care services, the demand for their home nursing services remained strong – which Steve puts down to their 2,500-strong network of home nurses.

“For Level 3 and 4 packages, the demand stayed quite high,” he said.

PPE requisitioned by Government for National Stockpile

Like many providers, Bolton Clarke found it difficult to source PPE – not least because an early order was requisitioned off the docks and taken to the Government’s National Medical Stockpile (NMS).

Told they would instead receive the next order, the provider quickly had to source supplies elsewhere.

“We serve 10,000 people a day so we needed it straight away,” Steve explained.

Bolton Clarke was able to access some supplies from the NMS two months later when they began caring for former coronavirus patients who had been discharged from hospital and became eligible for supplies.

Government’s coronavirus funding “wholly inadequate”

Given their expenditure, it is unsurprising that Steve labels the extra $200 million provided by the Government to deal with the costs of the pandemic “wholly inadequate”.

“It works out to be about $2.60 per resident per day which is the price of a newspaper today,” he said.

“It goes nowhere near covering costs of caring for the most vulnerable people in our society.”

He adds that the funding doesn’t recognise the additional cleaning and screening costs that come with the virus.

Over 350,000 home care clients screened for COVID-19

To give some scope to this, Bolton Clarke has conducted 95,000 staff screenings for coronavirus symptoms as well as 37,000 screening of visitors to their aged care homes.

They also held 89 flu clinics to vaccinate over 5,000 staff and pre-screened 355,000 home care clients to lower the risk of potential virus transmission.

Referring to the recent increase in cases in Victoria, he said: “We will be watching this very carefully. This is going to be something we are dealing with for some time.”

A history of battling pandemics

A group of District Nurses c1915 pose with their bicycles outside the District Nursing Society building at 39 Victoria Parade Collingwood.

However, Steve says staff were fantastic in their response to the pandemic, citing the fact that the RDNS was among some of the first nurses to treat Spanish flu victims in Melbourne in 1919, over a century ago.

“Staff were also aware that they are part of an organisation that has dealt with AIDS, SARS, MERS and swine flu among other illnesses,” he said.

“There was certainly a sense that it was our time to contribute to that history and that created a sense of pride and commitment to working through this challenge.” 

Ageing portfolio in Cabinet

Looking forward past the pandemic, the CEO wants to see a national conversation about ageing – rather than just aged care.

“I would like to see the portfolio in Cabinet talking about other issues related to people ageing such as housing, better integration with the hospital system and better supports to help people age in place.”

“Many reviews talk about it but we are yet to see anything tangible on that front,” he concluded.

“The last bastion is ageism and we are certainly seeing it reflected in this sector.”