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Using the COVID-19 crisis as a strategy reset for aged care boards

Using the COVID-19 crisis as a strategy reset for aged care boards

Australia’s aged care sector has weathered the COVID-19 pandemic well, despite some headlines to the contrary. While this doesn’t make the deaths of people in residential care facilities any less tragic, the sector continues to strengthen its measures to reduce the spread of the virus and protect the health of older people across Australia

Having weathered the initial storm and reset operations for the new normal, now is the time for aged care providers to think about a long-term strategy to strengthen its operations.

Consolidation across the aged care sector will continue

The burden that responding to the COVID-19 pandemic has placed on operators heightens the need to establish a strategy for long-term stability and strength.

Some providers will consider consolidation as a solution to ongoing operating challenges. Outside the COVID-19 pandemic and its associated impacts, there were already several operators concerned with these operating challenges, including funding and recovering community trust, especially given the findings of the Aged Care Royal Commission.

A relatively new challenge driven by COVID-19, is that associated with falling occupancy. This will present a funding dilemma for some operators. Many homes have seen a reduction in new entrants, which — while usually not critical — may have a longer-term impact on balance sheets over the coming years. For those operators with a weaker balance sheet that are unable to fund lower occupancy for an extended period, consolidation will be a likely solution.

Conversely, growth will be the solution for many organisations, acquiring capacity from those retreating from the sector. The pursuit of growth will be undertaken to lower average operating costs, seeking to increase scale and profile to become a care provider and employer of choice, and often as part of a longer-term exit plan.

Looking at the changing future of aged care delivery models

Challenges such as the COVID-19 pandemic could influence how people prefer to engage with aged care providers in the future. While it’s too soon to ascertain whether the pandemic significantly impacts delivery models, it could strengthen the trend of people seeking to defer entering residential aged care and preferring to stay at home. On the contrary, a trend towards relying on facility-based care could occur instead. The complexity of home care during a pandemic, including the large number of visitors needed to replicate facility-based care, and the associated infection risks could make a well-run facility-based setting preferable to older people and their families.

Finally, operations will need an overhaul. Most of the transformation in the sector to date has focused on clinical and infection-control procedures. While these factors are important, it’s now time to rethink the use of technology. Can homes make telehealth an effective option for residents? Can supported video-calling of family and friends become part of the daily routine? Are there other tech benefits such as temperature checks or symptom trackers that can be embedded? There are many options for aged providers to explore to integrate technology into their delivery models to improve outcomes for employees, and residents and their families.

Strong board strategy and communication is critical to move forward

Providers that have received the most public criticism recently are those that haven’t established strong communications strategies and operations. These providers were typically late engaging families about issues and failed to keep their staff updated and engaged. Moving forward from the pandemic, determine the best way to deliver regular, consistent communications and critical emergency updates when needed, are capabilities that all aged care providers need.

Addressing funding and cost concerns, reviewing business models and ensuring strong communication all comes back to one key factor — the quality of the governance in place. Governance in the aged care sector has improved tenfold in the past decade. However, there is still room for improvement, and the lessons that aged care providers are learning throughout the COVID-19 pandemic provide an opportunity for boards to strengthen their strategy and move forward effectively.

As a start, the boards of aged care providers need to consider four key things:

  • Safety: Review the pandemic and determine how well your organisation met its safety responsibilities. If it did not meet its responsibilities, how can this be addressed?
  • Communications: Determine the efficacy of your organisation’s communications throughout the pandemic. Were they timely? Did they reach their targets? If not, take this as an opportunity to reset your communications strategy and channels.
  • Workforce: Look at how and where activities were delegated across your organisation. Did the board effectively delegate to the executive and was adequate information available to make the right decisions? Did staff respond and step up? Was training effective? Identify issues in answering these questions and use this as a foundation to strengthen governance and workforce capabilities across the organisation.
  • Crisis response: Review the organisation’s crisis response in the initial COVID-19 outbreak and identify what needs to be improved to more effectively manage the next crisis.

Operating in a post-COVID-19 world

The aged care sector can be proud of the way it has managed the COVID-19 pandemic to date. The sector, and many others around Australia, however, face a new world order and needs to adapt for long-term organisational strength and stability. To successfully navigate the post-COVID-19 world, aged care providers need strong cultures, policies, governance processes and people to put the lessons of the past three months into practice.

If you’d like to discuss how your organisation’s board can use this time to review, reset and strengthen your strategy, contact one of our specialists below.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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