Mid-sized residential and home care providers likely to lose out in new aged care market

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In our special IT issue of SATURDAY released last Saturday, we spoke to Johny Ågotnes (pictured above), the Chief Information Officer at Bolton Clarke, one of the country’s largest Not For Profit, residential care, home care and retirement living operators.

Johny argues the role of IT will be critical to winning over the customer and maintaining operational efficiency in the future – and it will be mid-sized operators who will struggle in the new competitive market.

“We need focus on what we’re doing technology wise so that we can provide new services and be efficient and effective as an operator,” he stated. “Because if we’re not – whether we’re Not For Profit or a For Profit organisation, we’re not going to be around.”

The CIO says the freeing up of the market that will come with the end of the Aged Care Approvals Round (ACAR) in 2024 will be a ‘game-changer’ for the sector in terms of their customer focus.

Mid-sized providers will be the group that struggles, he maintained.

“As the Royal Commission comes through with the increased data collection and the increased complexity of the reporting requirements, I think they’re going to struggle to meet those requirements. Again, they’re going to increase the staff costs, increase their overheads, and become less sustainable in my view.”

The solution?

Johny says operators will need to scale up – or find a niche – to stay viable.

“If you’re a faith-based or Not For Profit provider in certain areas, you may well have an ongoing target market … but there are signs that a lot of providers in that middle space are going to disappear.”

This is a message which we are hearing from across the sector.

Home care providers tell us the current competition for new customers is brutal.

One operator said he expects larger Not For Profits to dominate home care moving forward as they “never give up”.

Driven by their mission – and surpluses – they always find a way, he added.

Certainly private operators don’t have the same generous payroll incentives as NFPs.

Larger operators have the scale to increase their market share, while smaller operators can look to their communities to build out their services at the local level.

This leaves mid-sized providers effectively between a rock and a hard place – they are large enough to have the overheads to be struggling, but don’t have the funds to invest in their IT and marketing to be competitive.

A challenge many will have to face.

You can read the full story here in Issue 10 of SATURDAY. Subscribe here to access the full issue.

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