While he has only been in the sector for 15 months, Chris Stewart (pictured) says his experience tells him that the sector is ripe for consolidation – and it could happen quicker than operators think.
Appointed Chief Executive Officer in January 2019, Chris leads the Not For Profit’s 1,600 staff to service 850 residents across nine residential care sites, 6,000 community clients and six retirement villages in Adelaide and regional South Australia.
A long-time former board member of Helping Hand, Chris was previously the Managing Director of Adelaide accounting firm Hood Sweeney and has over 30 years’ experience in financial services, health and aged care, technology and professional services.
Boards will be seeking a saviour
“Organisations are already feeling the pinch financially operationally,” he stated. “Boards are very attuned to their responsibilities and personal accountability.”
“As a Not For Profit provider, we exist to support vulnerable older people and if we can do this on a larger scale and more efficiently then that is a good thing.”
However, the CEO concedes there are roadblocks, with many larger operators unwilling to take on poorly performing organisations.
“What board is going to consider taking on an organisation that is really struggling unless you’ve got those benefits of scale that can move it from struggling to breaking even?” he asked.
Scale, efficiency and cash
“But building scale offers the opportunity to build systems that helps an organisation to keeping on doing what they are doing and fulfil their mission.”
New systems however require cash to invest.
Like other operators, Helping Hand is feeling the impact of COVID-19 on both its cash reserves and new admissions and clients.
While their balance sheet is sound, Chris says they have just come off $50 million of redevelopments including a new site and two major refurbishments – and COVID-19 has hit income as well as costs.
“Right now, we are having to dip into cash reserves to fund operations,” he said. “It is incredible how things were going reasonably OK through February and how quickly things have deteriorated since the pandemic.”
“Through March we have been literally pouring cash into frontline resources to support the residents with activities and their general care and wellbeing. We have also spent a lot of money in procurement to secure our supply chain with key consumables. We’ve also invested tens of thousands of dollars into new technology to facilitate community connections.”
“We are not directly funded for any of that although the 1.2% ACFI uplift has been very much welcomed,” he added.
This comes on top of a $1 million investment by the operator in preparation and response to the new Quality Standards and the likely outcomes of the Royal Commission.
Bracing for income disruption
Chris says they are now taking a more longer-term focus on the organisation’s future.
“Even though we have a reasonably strong balance sheet, these sorts of events have a massive and rapid impact, so we are bracing ourselves for that now,” he says. “Frontline care and support have to be the priority.”
“Enquiries have slowed compared to previous months and we are very mindful that we need to maintain occupancy through both permanent and respite admissions,” Chris said.
Across their sites, they are now operating at 90 to 95% occupancy, but this had been until recently in the mid to high 90s.
They are isolating new residents for two weeks – a necessary step, Chris says, based on the overseas experience – which is also discouraging families.
Adding to the strain is the SA Government’s new directive that ban prospective residents from inspecting homes.
Helping Hand has been offering virtual tours of its homes, but as other operators will know, residents and families want to see their new home.
He hopes this directive will be softened over the coming weeks if the virus curve continues to flatten.
Home care cancellations before crisis point
15 to 20% of their 400-plus home care and several thousand CHSP clients have also cancelled or put their services on hold, though they are still seeing new clients taking up packages.
However, the CEO believes this will be a dip and as the situation stabilises, they will see families hit a crisis point.
“Older people in their homes are suspending or holding off on services and families are postponing decisions regarding entering residential care. This puts a lot of strain on carers and individuals in their home while they wait for the situation to ‘turn around’.”
Chris also sees positive learnings for his organisation out of the situation.
Helping Hand has implemented new mental and physical wellbeing care plans for residents as well as better communication with families through Facebook pages for each home and extra technology and phone calls since they implemented their lockdown three weeks ago.
“We invested a lot of money and support to the care homes in particular,” he said. “We recognise the need to be transparent, maintain trust and not operate behind closed doors… many families and residents are showing the strain of being away from their loved ones and this is awful, but we are also seeing some unexpected ‘positive’ outcomes of the lockdown – both socially and clinically.”
“So, I am hopeful that we can capture the opportunity for positive change in our service models and operating functions as we move back towards a new normality, whenever that may be.”
Staff commitment and working from home
Chris says they have also seen benefits for staff who are being monitored by a newly established health and wellbeing team.
“We are also running a working from home check-in (Connect and Check ©) survey to ensure we keep our corporate team engaged and focused on supporting the frontline services,” he said. “I think this is paying off.”
“As part of our scenario planning, we have asked all our staff who would be prepared to work in a site if we had an outbreak. 500 staff indicated they would – this shows the commitment of our team to the organisation and clients.”
Advice to others
His advice to other operators?
“I have been asking my team … ‘What have been some of the positive experiences from this crisis that we can learn from, that we can build on? … certainly I have noticed that we have become much more agile and innovative’.”
“Biggest challenge for any leader is managing the day to day challenges, but equally looking ahead to prepare for when we come out on the other side, hopefully as a better organisation,” he said.
Chris also recommends ensuring you can back up decisions made today in six months’ time when the regulator recommences its visits and record your decisions.
“This has been a very difficult period for leadership and management. You are making decisions with imperfect information.”
“A legal expert advised me that I need to be thinking about ‘how will you explain that decision in six months’ time?’ With the benefit of hindsight, some decisions might not look that great!”
“So, we have been risk assessing and documenting everything, always putting the clients at the centre of our thinking. I hope the regulator takes these extraordinary circumstances into account when they recommence their field audits and visits.”