Thinking ahead on:

Home Care - Pricing, strategy, disruption and governance

Heath Shonhan e: hshonhan@bris.bentleys.com.au p: +61 (0)7 3222 9777

February 2017

DISRUPTION!

The power of the crowd

Labour/consumer flexibility

Existing sub contracting

arrangements

Identifying your value proposition

Source: Strategyzer.com

New skills for success

Total Home Care

Centrally held or

unallocated

items

Service level

Name <A>

Service level

Service level

Name <B>

Service level

Income

Provision of Care/Services Fees Charged to Package and Private

Clients

0

Client/Case Management Fees Charged to Package and Private

Clients

0

Administration Fees Charged to Package and Private Clients 0

Unspent Home Care Amount 0

Other Revenue 0

Total Income 0 0 0Check Total - Sum of Service Level Totals equals Total Home Care 0

Expenses

Wages and Salaries - Care Staff 0

Wages and Salaries - Administration Staff 0

Administration Costs and Management Fees 0

Care related expenses 0

Sub-contracted or brokered client services 0

Depreciation expenses 0

Interest expenses 0

Other expenses 0

Total Expenses 0 0 0 0Check Total - Sum of Service Level Totals equals Total Home Care 0

Net Profit/(Loss) Before Tax 0 0 0 0Check Total - Sum of Service Level Totals equals Total Home Care 0

Financial reporting to Govt.

Other Financial Information (Commonwealth Package Clients only)

From Consolidated Client Statement

Unspent Home Care Amount - Opening Balance

Commonwealth Subsidies and Supplements

Client Fees - Basic Daily Fee

Client Fees - Income Tested Care Fees

Client Fees - Other

Funds Transferred in With New Clients

Funds Transferred Out With Existing Clients

Package Funds Spent

Unspent Home Care Amount - Closing Balance

From Home Care Segment Balance Sheet

Cash and Liquid Assets (current)

Pricing Checklist

Target pricing now becoming common in aged care!

Area Yes / No Changes required

1 Price on competition/what we think, or value provided / services

required;2 Restaurant menu of services, each underpinned by costed Bill of

Materials (BoM);3 Exit fees from (27 Feb 2017) + value proposition (or Care transition

plan?;4 Unit of measurement (1hr, event, 15 minutes or 6 minutes?) with

minimum service period;5 Payment process (direct debit, credit card) for out self funded –

minimise the payment pain point;6

10% administration expense (via a) leverage or b)efficiency); and

7Loading for shorter periods? Eg hourly rate = $100, ½ hr= $65

8 Activity based costing for every product / service (and over time

customer profitability analysis) - time and products

GST and out of pocket outlays (eg ticket

costs) extra

Care Massage $45 / half hour Enriching Christenings, weddings, births, deaths $75 / hr $500 /

(Non Osteopathy $45 / half hour Rainforest retreat $75 / hr $500 /

Assessed Bedding upgrades POA Holy place visit $75 / hr $500 /

need) Aromatherapy $75 / session Sky diving $75 / hr $500 /

Hydrotherapy $65 / session Cruise $75 / hr $500 /

Counselling and support $85 / hour Seaside holiday $75 / hr $500 /

One on one personal assistant $45 / hour

Non prescription drugs, vitamins etc $20 / order Entertainment Cinema $75 / hr $500 /

Case management $125 / hour Concert, music festival (eg Bluesfest) $75 / hr $500 /

Exit fees $0 Theatre $75 / hr $500 /

Care transition planning (on program $500 Casino $75 / hr $500 /

Care program development $1650 / program Sporting event attendance $75 / hr $500 /

Reablement program management $145 / session Other $75 / hr $500 /

Personal Repairs and maintenance of personal items $350 / day

Shopping $75 / hr $500 /

Room service $5 per meal Funeral services $3,500

Services Non emergency patient transport $4.50 / km Trustee services $250 / hr

In home care mhealth technology bundle $25 / month Real estate agency 2% commission

mhealth monitoring $10 / day Reverse mortgage brokering NIL

Telecoms and data $5 / day Informal carer support services $25 /hour

iPad rental $20 / day Custom activities planning $50 / event

Technology support services $100 / 2 hr bundle Function catering $35 / hr wait staff

Home care service menu (EXAMPLE ONLY!)

Your menu of services

Consider the power of a telco ‘bundle’!

Updating your ‘Governance’ Principle Thinking ahead

1 Roles/ responsibilities

Pricing strategies (exit fees, other service menu items) require consideration within next 45 days. Client service staff performance rewards based on client satisfaction, profitability ($) , longevity, innovation.

2 Board Composition Include customer attraction and technology deployment skill sets to the Board requirements. Consider age of board members and their relative connectivity in your serviceable market.

3 Purpose and strategy Your target market / customer (fee for service irrespective of funding source) may require a rethink of your vision and mission.

4 Risk recognition and management

Review enterprise risks associated with increased clinical governance requirements (if providing higher levels of care), subcontracting arrangements, and debtors.

5 Organisational performance

Timesheets to track whether available resources (time/human capital) are being utilised in an efficient/effective manner to achieve stated outcomes. Are we getting maximum desired impact from/avoiding wastage of resources?

6 Board effectiveness Update standing agenda items for board members – include Innovation, consider clinical governance and consumer engagement sub committees s

7 Integrity and accountability

Update board reporting dashboards / measures that matter, consider how often these are reported against - weekly, monthly, quarterly (Home care is /can be 24/7)s

8 Organisational Building

Flexibility for staffing (when/where they work) supported by Technology (from rostering and time sheets through to product ordering, care service completion, Home care ). New staff skills s

9 Culture and Ethics Customer first. Capture knowledge and the ‘way things are done’ in knowledge management systems / Human resource management systems. High ethical standards just expected.

10 Engagement Reconsider who (client OR their family) what you sell (care vs guilt reduction) , and how you engage with them (google AdWords, word of mouth), and similar engagement strategies for other key stakeholders.

DON’T MISS THE UPCOMING RISK MANAGEMENT SEMINAR

Legal and financial issues in home care and residential care

Collect a flyer on your way out

for more details

When and where?

Date: Wednesday, 8 March 2017 8:15 am for 8:30am, concluding at 1pm – with a light lunch. Location: Victoria Park Golf Complex, 309 Herston Road, Brisbane Registration: $120 pp (incl. GST) ACSA Member Special: $100 pp (incl. GST) Multiple registration special: Book 2 delegates and the 3rd registers FREE

Presented by:

Measures that matter(Balanced Scorecard)

Four interlinked quadrants

enables focus on driving long

term financially viable delivery on

mission by:

creating value for current and

future clients;

build/enhancement of internal

capabilities;

making investments in people,

systems and procedures

necessary to improve

performance.

Financial

Customers

Learning & Growth

Internal Business

Processes

Vision & Strategy

13

Client /resident/family satisfaction index eg NPS (measured per event , tracked

# of family / resident contact episodes - face to face + online

% Enquiry conversion to service delivery per week (pipeline management)

Resource investment (time + financial) into R&D

New products / services commercialised / implemented

per quarter

Resource investment (time + financial) into soft skills Training per month

# of community interactions per month (events, ‘likes’, social media

engagement etc)

% compliance with regulatory expectations-

accreditation, WH&S, clinical governance per quarter

Employee engagement per month/

quarter

Staff turnover; average length of service per employee;

absenteeism

Staff utilisation / productivity

(billable/unable)

Average spend per customer per day

% coverage of funds held in trust

(>100%)

Resident wellness + Quality of care indicators

Gross Profit % per month

Input / administration costs as a % of revenue

Measures that matter(Balanced Scorecard)

Innovation!

Lulu tracked every step

Heath Shonhan e: hshonhan@bris.bentleys.com.au p: +61 (0)7 3222 9754