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Providing Additional Services in Aged Care.

Approximately 66% of all residential aged care revenue is sourced from Government. Providers are dependent on government policy and compensation rates. In recent times we have seen indexation caped or frozen and ACFI funding reduced. It is now imperative that Providers find new ways to generate revenue. Providers have always offered services outside the Aged Care Act. Typically, these include clothing labels, hairdressing and bus trips. In the past, the expectation has been that Providers also bear the costs of these services. There has therefore been little incentive to promote or enhance them. With the industry being told to adopt Consumer Directed Care (CDC) the door is now wide open to provide greater choice and flexibility for residents and their families. The greatest hurdle when introducing additional services is resistance from staff. In the climate of diminishing occupancy, Facility Managers don’t want to charge more fees. Likewise, care staff are not looking for extra duties and think no one should not have to pay for healthcare, what I call the “Medicare Mantra”.

It’s important to bring your staff on the additional services journey. From my experience, staff will greatly contribute to the service offering. One staff member noted that residents hated the vinyl covers on pillows as It made their head sweat and left imprints on their skin. Now the facility offers “complimentary pillows” with no vinyl covers as part of their additional services package. They only cost $10 and the facility throws them out when the resident leaves– CDC in action!

Some providers have tried a luxury hotel service model and have come unstuck with elaborate services such as weekly massages, day spas, and trips to the theatre. Unfortunately, the residents did not take up the offer and with the typically low rate of new admissions, Providers end up out of pocket.

The first step in developing your additional services is to look at what you already provide for free. In my experience Providers spend $800-$2000 per resident p.a. on services not covered by the Aged Care Act. Start with packaging these services for new residents and don’t be greedy, a modest fee of $5.00 a day, the price of a cup of coffee but will add $1,825 per place EBITDA.

For more information contact James Saunders at PrideLiving

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