The Royal Commission into Aged Care Quality and Safety, announced by the Government in September, will no doubt shine an uncomfortable light on aged care providers. We see this announcement and the subsequent inquiry as an opportunity to help the industry move forward toward a future offering more choice, better quality care and (hopefully) lower price points for end users. Above all, the inquiry is essential to win back community trust in the sector and to encourage the development of newer and more innovative ways of delivering high quality care.

A Snapshot of the Aged Care Industry - The Pain Points

The regulatory frameworks are changing, as are social expectations. We have already seen in a broader sense a shift away from the institutional style of care to a more consumer-directed focus - that is, care which not only meets the consumer's health and personal needs on paper but is also delivered in consultation with the consumer and with due regard for the consumer's own individual preferences, beliefs and opinions.

Our seniors are more socially, culturally and ethnically diverse than ever before. They are living through a massive period of technological change which could dramatically improve the quality of their care as well as making it far more personalised and cost-effective. These are trends that are set to continue into the foreseeable future. Some aged care providers have evolved, innovated and thrived. Others are struggling to adapt or have failed to meet community and customer expectations, and it is these providers by and large that we will see at the Royal Commission.

What to be Aware of - How to Prepare and Plan Ahead

The Royal Commission will cast a sanitising light on the industry, and aged care providers that are the subject of the inquiry will be asked some difficult questions. Providers should prepare by self-auditing their risk exposure by identifying current and historical regulatory breaches, incidents and complaints and how well the business has responded to each incident. This assessment should also include a review of everyday operations to determine whether they not only meet regulatory requirements but also whether they reflect best practice and align with reasonable community expectations.

Providers struggling with funding difficulties (and there are many providers that fall within this category) will also need to consider whether they can continue to operate in this changing environment.

The Future of Aged Care and Opportunity Ahead

The Royal Commission investigations will be broad, and will no doubt raise wider questions around Government policy and funding, which in their own way contribute to substandard results for end users.

We expect that one key question will be what are we as a community willing to pay for the care that we want, and who is going to pick up the tab? Will it be the seniors who are outliving their savings? The kids who can't crack the property market? Or will it be the Government grappling with fewer taxpayers, sluggish wage growth and the end of a mining boom? It’s a complex problem and one that will require a multi-faceted approach to solve.

While the above issues may seem insurmountable, there is much to be optimistic about as this process unfolds. New technologies are driving innovation in the aged care industry, which is introducing fundamentally different approaches to service delivery and price, not to mention choice for the consumer.

We believe that in the coming years, there will be a consolidation of the industry, as less profitable and substandard operators make way for new entrants. These new entrants offer favourable approaches and better value. There are many innovative businesses that will use this inquiry and industry consolidation to make their way into the market or expand their current market share. This might be a good thing for end users. These new providers will likely be lean, provide highly individualised care and rely heavily on automation and technology to deliver cheaper and more efficient outcomes for residents.

There is no question that a one size fits all approach to the customer does not deliver the standard of care that seniors and their families expect. The industry has many questions to answer, but we also believe the Government has a role to play in its funding approach and encouraging new and innovative alternatives to grow within the industry, which is primed for disruption.

Key Points

There is no question that the coming years will pose a serious challenge to the aged care sector. There is no doubt that this some will be better placed to navigate this change than others. However, the key points to take on board for all industry stakeholders include:

• manage the process diligently and transparently;

• prepare thoroughly around the inquiry parameters as they relate to your business;

• be commercial and open to change if your business needs it;

• make a realistic assessment as to the viability of your business in a new regulatory environment;

• be open to new ways of doing things and new opportunities;

• see change as an opportunity for improvement and advancement.

It is important during this time to have the right people on your team. For all your aged care legal services including assistance preparing for the Royal Commission, contact us on 02 9199 4563 or at info@kinnylegal.com.

This blog post does not constitute legal advice and should not be relied upon as such. It is a general commentary on matters that may be of interest to you.  Formal legal or other professional advice should be sought before acting or relying on any matter arising from this communication.