Operators are dreaming with retirement village growth strategies
The Ansell Strategic chart above sums up what Ansell’s clients are telling them they intend to build. Assisted living and private aged care homes for an additional 350,000 people over ten years. Tell ‘em they’re dreaming.
The popular strategy for many (particularly Not For Profit) RAC and village operators is to pivot out of residential aged care into building regulation light assisted living. Chris Blake (pictured below) says it’s too late.
The CEO of St. Vincent’s Health Australia, with over 30,000 staff, two million patient a year, two major public hospital networks, 10 private hospitals, 26 aged care facilities and significant research groups (like the Garvan Institute), should know what he is talking about.
Interviewed by Lauren Broomham for a special edition of SATURDAY (out 12 December), Chris explained simple maths has made all straight line planning redundant.
His blunt message: on current settings the health system – including aged care and care at home – is “unfundable within five years.” It’s not about politics; it’s “just maths”: more people living longer with chronic disease, rising dementia, and rising labour costs.
He points out that retirement villages and residential care hasn’t changed in decades. The simple concept of home care funding being the basis of assisted living in villages is also flawed. He says “there is no more money” coming from Government, while the numbers of people entering serious older age is doubling within three years.
The Ansell Strategic chart above sums up what Ansell’s clients are telling them they intend to build. Assisted living and private aged care homes for an additional 350,000 people over ten years. Tell ‘em they’re dreaming.
As Chris Blake says, the maths don’t work. Too many people, too few building approvals, too much financial risk, no spare cash for pro rata increases in Government home care funding. The sector will not grow on a strategy of assisted living; old village stock will get older and be less appealing.
What to do?
Pivot to prevention. It is the only answer. The healthier village residents are, the less pressure on health services being required in the village. And it is a marketing plus which customers will pay for as they too recognise the need for supportive accommodation.
Here is what we see in all villages within three years:
- Exercise programs
- Loneliness programs
- Dementia programs
- Carer support programs
- Part or all of which will be private pay
A final word from Chris Blake: if providers keep designing using “the rear vision mirror,” they’ll “hit something coming the other way.”
Want to learn more? Join us at the LEADERS SUMMIT, 24 and 25 March at the Hyatt Regency Sydney.
