Consolidation of the aged care sector the inevitable outcome of Govt’s reform agenda

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This week’s issue of SATURDAY is looking at the issue of Regulation and the Royal Commission reforms that are set to roll out over the next months. The underlying message? Further consolidation in both residential care and home care will follow.

The Government’s five-year timeline for reforming the sector is currently under threat.

The failure of the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 to make it through Parliament before the Federal Election means that operators are still in the dark on many of the reforms.

But regardless, the pace of reform appears unlikely to slow down.

A spokesperson for the Department of Health and Aged Care confirmed that despite the legislative delay, the Government remains committed to implementing the “urgent reforms”.

The Labor Government has also promised a raft of new reforms in the coming months, including 24/7 Registered Nurses, an increase in the direct care requirements to 215 minutes, and improved food and nutrition standards.

Combined with continuing financial losses, restricted migration and an increasing unannounced visits regime by the Aged Care Quality and Safety Commission (ACQSC), the sector is facing major financial, workforce and regulatory pressure – all intersecting at once.

Home care is not immune either – the recent changes to the Social, Community, Home Care and Disability Services Industry Award 2020 (SCHADS Award) are proving an added headache for providers, as we also discuss in this issue.

Can providers adapt and survive in this environment?

This edition points to the need for investment in systems, technology, rostering, and upskilling staff – not an easy ask for many organisations.

There is also a need for boards to be on the front foot and thinking strategically about the future – also a challenge when much of the focus remains on day-to day operations.

Board directors will need to make some hard decisions about the future of their services – and many will choose to sell, merge, or close their services.

But this takes time – Alison Choy Flannigan, Partner at law firm Hall & Wilcox, who features in this issue, says it takes around 12 months to sell an aged care facility.

The pressure is then on boards to weigh up their futures now.

For some, the future will offer opportunities – Mounties Group CEO Dale Hunt tells SATURDAY how the club group is expanding its home care and retirement living offering.

Australian Unity’s Beverly Smith also shares how the operator’s continuum of care model is driving retirement village sales.

For others, the time has come to evaluate their market proposition.