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Future directions
for consumer
directed care
Nicki Doyle
Director, KPMG Australia
2 September 2015
• Consumer-directed care (CDC) is both a philosophy and an orientation to service delivery
where consumers, including care recipients and their carers, can choose and control the
services they get to the extent that they are capable and wish to do so.(1)
• The main objective of CDC is to offer consumers more choice and control than they would
have from traditional and agency directed programs. (2)
• Internationally, the emerging evidence base evidence suggests that CDC approaches lead
to: greater satisfaction; greater continuity of care; fewer unmet needs; more effective use
of scarce public resources (3)
• A review of CDC in community aged care services found:
Even after a short period of operation, CDC appeared to have a positive impact on
participants’ level of satisfaction with various aspects of their life. Participants reported
increased satisfaction with their ability to participate in social and community activities,
their ability to visit family and friends, the quality of their home life and close
relationships, and their health and wellbeing.(4)
(1) Aged and Community Services Australia, Guiding principles for consumer directed care. ACSA 2010
(2) Tilly, J. & Rees, G. Consumer Directed Care: A way to empower consumers? Alzheimer’s Australia, 2007, Paper 11
(3) Bornat & Leece, 2006; Glasby & Littlechild, 2009; Hasler et al., 1999;Social Care Institute for Excellence, 2005
(4) KPMG, Evaluation of the consumer directed care initiative, January 2012
DEFINING CONSUMER DIRECTED CARE
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.1
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
• New legislation mandates consumer directed care (CDC) in the provision of community
based care. It is anticipated to be extended to residential care in the future.
• In its early days, the focus on CDC is seeing older people make decisions on how to
spend the resources available to them for the care they require to support them in the
community.
• These reforms aim to empower individuals so that they can receive greater value and
more tailored services that are better able to meet their needs
• Consumers experiencing CDC are already having greater satisfaction rates and there is
a stronger focus on wellness and enablement than has previously been seen.
CDC shifts the balance from the aged care system being provider driven to
one where consumers are becoming more empowered and able to shape
market directions
AGED CARE REFORMS: CONSUMER DIRECTED CARE
2
• There will be more choice about the nature and the range of services that are available
• The market will change in response to new and emerging demands from consumers so that
a greater range of services will be available
• The shift in funding control to the individual will encourage the emergence of new
providers increasing competition
• The cost of services will be impacted by market forces – there will be greater pricing
sensitivity improving the cost effectiveness of service provision
• The current regulatory environment will be replaced by a ‘light touch approach’ and a
greater focus on safeguarding so as to maximise the capacity of the market and choice
• There will be greater flexibility and responsiveness from providers: a move away from 9
to 5 to one that is 24/7
• New models of delivery will emerge – new forms of employment, new workforce
requirements, new skills sets.
All of these changes are likely and have been evidenced in settings where
consumer directed approaches have been implemented and have time to mature
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
KEY ASSUMPTIONS FOR CDC NOW AND FOR 2017
3
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
Source: SachaChua.com
INITIAL REACTIONS
4
KPMG have worked extensively with government and aged care providers to prepare for the
implementation of consumer directed care (Part one):
• Formative evaluation of Consumer Directed Care (final report under consideration):
- Online survey of all home care providers
- Analysis of retrospective data to demonstrate how CDC consumers were using places
- In depth analysis in 10 aged care planning regions (25 home care providers and 13
ACATs) including interviews with consumers and carers/families
• Support to a range of organisations to: undertake strategic planning, develop new service
models, undertake financial modelling, and support change management, as a basis to re-
orient their organisation in readiness for CDC
• Round-table discussions with residential and home care industry leaders in Victoria and
NSW in March 2015
• Pilot of National Quality Care Indicators, commencing 4 May 2015
Common themes have emerged from across these engagements
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
EMERGING FINDINGS
5
Providers are at differing points
SPECTRUM OF CONSUMER DIRECTION
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.6
Agency Directed Person Centred Consumer Directed
Agencies Consumers Agencies Consumers Agencies Consumers
Agencies
allocate and
ration services
based on
assessment of
consumer need,
and make
decisions about
how to distribute
centrally-pooled
funds
Agreed financial targetsand time frames
Clear non-financial objectives
Both aligned with and part of overall strategic programme
Reflected in senior management targets and incentives
Providers use
individualised
assessment and
planning
approaches
and tailor the
delivery of care
and services
to consumer
preferences
Consumers have choice around the services they can access from a menu of available services, and may have some control over when services are delivered
Providers
facilitate the
planning and
delivery of a
tailored package
to meet a
consumer’s self-
determined
goals within an
individualised
budget.
Consumers have choice of care and services, control over how, when and by whom services are delivered, and control their individualised budgets
Lower HigherSpectrum of consumer-direction
• Undertaken detailed cost modelling to develop new fee structures
(i.e. understand cost of delivery and unit pricing)
• Understand risk, are comfortable with the unknown, and prepared
to “take a hit”
• Involvement of consumers in adapting model of care
• Implementing multi-tiered care coordination models
• Broadening service offerings to better support principles of CDC
• Developing partnerships, relationships and tools to support
provision of CDC
• Taken a whole of organisation approach, with strong CEO and
senior management commitment
• Established strong change management and training for Board and
Staff at all levels
• Refined marketing strategy to best position the organisation
• Adopted a continuous improvement process, recognising it takes
time to embed
1
2 Model of Care
Strategy
Financial Management3
PROVIDERS BEST ADAPTING TO CHANGE ARE / HAVE
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.7
• Struggling with changing administrative and case management costs –
with high variability in administration and case management pricing
structures evident
• Reluctance to price services to recoup costs while remaining competitive,
vs. charging what is “fair”
Strategy• Under-estimating the scale of transition and planning required
• Primarily focussed on the financial transparency aspects of CDC
• Thinking beyond program guidelines to move innovative models of care
• Limited focus on models of care including changing role of workforce
• Limited consideration of the continuum of CDC, and choices available to
consumers to engage with their care
• Appetite for innovation, however regulatory/market supply constraints that
have to be overcome
• Under-estimating training, education and change management
requirements
• Culture and practice change yet to be widely observed
• Workforce skill and confidence to “have conversation” with consumers
about purchasing
• Diversifying the workforce and considering differing models – IR constraints
ONGOING CHALLENGES INCLUDE
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
Model of care
Financial management
Workforce
1
2
3
4
8
ONGOING CHALLENGES INCLUDE
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
• Managing resourcing to demand is challenging
• Managing access to capital to deal with peaks and troughs in consumer
demand requires new skills and capability
Consumer engagement
• Consumer preferences for face-to-face information provision
• Early planning by consumers – to avoid pressured decision making in times
of crisis
• Information asymmetry regarding costs, purchasing power, and value for
money
• Variable views on purpose and establishment of contingency funds
• Choice is constrained by the market, and opportunities and information
imparted by providers
• It takes time for consumers to assert and exercise control and yet to be
given effect for some special needs groups
• Co-design/co-production is yet to emerge and limited progress in the use of
CDC to support participation, wellness, and re-enablement
Giving effect to CDC
Demand
5
6
7
9
• Redesigning jobs to embody
CDC
• Providing education, training and
support to staff to develop the new
skill sets
• Ensuring staff are fit for purpose for
CDC, and if not, taking necessary action
Consumer
Directed
Care
• Re-design business model to put CDC
framework at the fore
• Developing partnerships with other service
providers to facilitate and support CDC
• Implementing systems to track and
monitor the quality of CDC
being offered e.g. consumer
feedback pathways
• Provision of information and empowering
the consumer to make decisions
• Conducting market research to
determine the types of services
and products desired by your
local community and consumers
• Redesigning ‘back office’
functions to respond to CDC
• Identifying key financial risks and
challenges
• Establishing a risk management strategy to
mitigate the effects of unpredictable cash flow
• Maintaining a competitive advantage in a
client driven environment
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
IMPLEMENTING CDC – CONSIDERATIONS
10
Approach to implementing CDC has comprised:
• Consulted widely with consumers to identify what they wanted, what worked under
current model, and what could be improved
• Expended considerable time and effort on multiple iterations of training and
change management, at all levels of the organisation
• Experimented with service delivery model options: now have a mixed model with
more than 100 brokerage services as well as in house provision
• Undertook detailed market analysis to establish value proposition and ensure a
competitive edge
Large provider operating in both metropolitan and regional areas
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
CASE STUDY 1
11
Approach to implementing CDC has comprised:
• Fundamental changes to organisation to shift thinking and support change
• Iterative process to development of new model of care
• Reviewed job titles and descriptions, placing consumer at the centre of roles and
responsibilities, and re-badging case managers as “coaches”
• Developed tools to support behavioural change and take-up of options and
expend care packages: common bundles; case examples; sampler events
• Implemented a self-assessment model: material provided to consumer and
family/carer prior to first meeting with coach
Medium sized provider operating in a metropolitan area
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
CASE STUDY 2
12
Stand in the shoes of the consumer to understand their experience of
service provision… recognise that consumer expectations have no
boundaries
Stress test some of the core processes from a consumer focus to see how they
work and whether they are delivering as intended
Talk to current and potential consumers to learn about their needs and
wants now and into the future… start by looking outside in not inside out
It will be necessary to establish ways of gathering firsthand data from consumers to
inform an organisation’s focus, products and services.
Consider what internal and external data is being collected, and how it is being used.
Re-orientate services to have a greater focus on consumers, starting by
identifying who the consumers are…
Don’t assume they are a homogenous group – there may be need to segment
the customer base to better understand what different groups require1
2
3
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
THE PROCESS OF CHANGE – MATURING FOR 2017
13
Train workforce in what it means to be consumer focused: it is a different
way of working with different rules… it is about service and experience
Staff will need to reorient the way they work – if they can’t manage this
transition – their future in the organisation will need to assessed.
Focus all of the organisation on the consumer… the emphasis should be
on ‘consumer life time value’
This will require a behavioural, skills and cultural shift at all levels within the
organisation.
Establish a commitment to becoming a consumer led organisation by
leading from the top
Current ways of working will have to change – the leadership team should
refocus their organisation’s mission, priorities and values to reflect the
importance of the consumer.
4
5
6
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
THE PROCESS OF CHANGE - MATURING FOR 2017
14
Develop a ‘sense and respond’ capacity to meet changing needs and
expectations…
Expectations of consumers can change rapidly in a competitive market – there is need to
stay close and abreast of what current and future patients/consumers are thinking –
emerging trends need to be identified quickly so providers have an edge – and get new
offerings to the market quickly (it is now weeks not months for new products)
Redesign business processes so they better respond to consumers’
requirements and expectations…
Start with the basics – core processes should be co-designed to make sure that they
work as needed in responding to consumer needs – don’t underestimate the value of
digital strategies as ‘game changers’ for the organisation in the market place
Keep close to consumers to get regular feedback on how they are
tracking… are you delivering on your promise/their expectations?
Only consumers will be able to accurately assess how an organisation is faring
– regular soundings and engagement with the consumers experience will be
essential to provider success
7
8
9
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
THE PROCESS OF CHANGE - MATURING FOR 2017
15
Learn from other customer focused industries
Large customer focused industries including banking, insurance, and telcos are
undergoing transformation in their service delivery to be more customer
focused. Whilst differing sizes and target markets, there are many lessons
applicable to aged care industry
Technology is key to engage with consumers
Technology is evolving quickly and can be used to market services, engage with
current and future consumers and deliver services. Develop digital strategies to
engage, enhance and personalize consumer experience.10
12
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
THE PROCESS OF CHANGE - MATURING FOR 2017
16
July 1st was the starting line not the finishing line ……
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.17
“Success in the market should be driven by consumer interests
not the special interests of suppliers and providers…
[Vulnerable Australians, including special needs groups] too
should enjoy the benefits of choice, where this can reasonably
be exercised, and service providers that respond to their needs
and preferences [across the continuum of care]”
Ian Harper, Competition Policy Review
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International.
LOOKING AHEAD: OPPORTUNITIES FOR PROVIDERS
18
Thank you
Nicki Doyle
Director, KPMG Australia
Health, Ageing
and Human Services
T: +61 (03) 9838 4112
© 2015 KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered
trademarks or trademarks of KPMG International.
The KPMG name, logo and “cutting through complexity” are registered
trademarks or trademarks of KPMG International.