Older Australians have voted with their feet: many want to stay in their own homes as they age. They expect access to quality care with minimal wait times and transparent payment arrangements that are aligned to consistent assessment of their needs.
In 2022 the number of people with home care packages has, for the first time, overtaken the number of people in residential aged care. With the home care market growing rapidly and the Australian Government’s reformed and improved in-home aged care program starting in 2024, the clock is ticking for the sector to prepare.
A new in-home program is set to combine and replace Home Care Packages (HCPs) and the block funded Commonwealth Home Support Programme (CHSP). It will change key aspects of in-home aged care, including assessment, individualised support plans, clarity on service inclusions with a service list, consistent funding models and regulation of the market. The market and funding landscape are already changing.
As of March 2022, some 227,209 people had access to an HCP, up 24 per cent on a year earlier, with demand for home care services projected to continue to grow. This expanding pie allows existing providers to deliver a greater number of packages, while also providing incentives and opportunities for new providers to enter the market. Meanwhile, increased consumer choice has intensified competition between service providers, prompting existing providers to strengthen consumer focus, and modernise and refresh their service delivery models.
The shift from HCPs and the CHSP is putting extra strain on many aged care providers. The change comes at a time when they are already grappling with myriad trends impacting the industry, from workforce shortages to ongoing government reform, rising inflation, reduced margins and an evolving COVID-19 situation. While the recent Fair Work Commission decision of an interim 15 per cent pay increase to direct care staff does provide some relief, the cumulative effect of these trends is that a new approach to service provision is essential.
The reformed in-home aged care program is likely to bring even more new entrants and service models into the market, intensifying competition to retain current clients and attract new ones. For many aged care providers, this means they need to redefine their value proposition and change their business model to meet these evolving needs and reform.
The new in-home care and support program represents a challenge and an opportunity for aged care providers. While its introduction has been delayed to 2024, the government has indicated it will be in line with the recommendations of the Royal Commission into Aged Care Quality and Safety.
Based on the tenets of the Royal Commission, we know it will involve:
While details are not yet available on how the new in-home program will operate, providers need to move quickly to prepare. There is a narrow window to redefine their value proposition and adapt their business model to better reflect the needs and preferences of consumers, attract business from consumers and meet community expectations.
Drawing on our experience working with aged care providers, we have identified six steps for aged care providers to get ready:
As Baby Boomers reach retirement and life expectancy continues to increase, demand for home support will only grow. The potential upside of getting this right is huge for older people and for providers, but the consequences of getting it wrong are also substantial.
Get in touch to explore how we can help your aged care provider get ready for reform to in-home care.
 Department of Health and Aged Care (2022), Home Care Packages Program: Data Report 3rd Quarter 2021-2022