Beyond the bounds of the current aged care business model
How can we think beyond the bounds of the current aged care model?Whilst many aged care providers know that they need to change, they feel their business model is restricted by the current government funding model. Government funding to the sector is based on levels of care (e.g. high care receives greater funding) and as such many aged care providers find it difficult to provide a holistic customer experience according to the changing needs of consumers. However, let’s challenge providers about whether reliance on government funding is a sustainable business model. As the Author of the Australian Not For Profit Innovation Index, the results for the charity sector have consistently shown that funding follows organisations that innovate, rather than the perception that innovation can only occur when an organisation has sufficient funding. Innovating the business model in aged care is about looking beyond the boundaries of the current system to identify opportunities for sustainable growth.
So, what could business model innovation look like in aged care?The first and most obvious shift is broadening the offering from “care” to a lifestyle experience where aged care organisations are seen more than care facilities. Over the past five years, industry players have sought to improve the quality of care and standard of available facilities resulting in a number of five-star luxury-rated aged-care facilities. Additionally, the ageing population is looking less and less to sell their own home to move into an expensive aged care provider. Instead, looking for options to remain in their home, live well and age in place. Opal aged care have taken a different approach, appointing a former CEO of TFE hotels, to take the reins of the organisation. Bringing on board a CEO outside of the sector but with a wealth of experience in the hotels and hospitality sector makes a bold statement about the strategic direction of the organisation. This shift could generate a multitude of new revenue streams including entertainment and lifestyle services. Beyond simply “aged care” is the opportunity for family care. In Australia, finding appropriate care for both elders and young children is often difficult and expensive. Aged care providers could leverage their experience with the elderly to take a view of the whole family unit and identify opportunities for care across the family that they service. A recent study has identified the social and economic benefits of intergenerational care. Specifically, in regards to business model innovation, intergenerational care may be an opportunity to address the needs of the aged care customer which is often the whole family, rather than just the end user.
“Delivering intergenerational programs in one location is also attractive because of anticipated cost savings. Both aged care and childcare organisations can decrease total running costs by sharing resources such as skilled labour, learning materials, and buildings.“
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