Home care package funding recipients (consumers) were set free on the 27th February 2017 to choose their own approved provider (Provider). Twelve months on quite a lot has happened following the introduction of consumer directed care home care packages, although not a full-blown revolution, more of a ‘movement’, there are strong indicators of what will happen in the future.
So, what can we summarise about CDC (consumer directed care) today? Reviewing the year from what we know from experience and published surveys:
The majority of existing providers are losing customers
Half of existing providers experienced a decline in their total number of packages, while one quarter had an increase and the remainder experienced no change.
Some consumers are changing providers
Movement between providers is happening, however, not a stampede. There is movement, more related to perception of the care and service or practical reasons regarding consumers using the best provider for their needs.
Management costs of a home care package, around 30% (sometimes above 50%) is declining, however not rapidly, despite new entrants in the market and their advertising of low fees. The care and existing relationships are holding out well for the incumbents who service their customers well against price driven competition.
The likelihood of changing providers is extremely low, with 7% giving a positive response, and more than half (58%) not at all likely to do so. This was due to satisfaction with current services (85%) and/or that they liked the workers delivering their services (76%).
Consumers don’t understand the changes
Despite government marketing efforts, surveys found consumers did not understand the new system and found many terms confusing.
For- profit operators are significant new players in home care
The number of approved home care providers has grown by 40 percent, 70 % of new applicants are for- profit businesses, compared with the 2016 census when for- profit business only represented 12.6% of operators.
New operators are increasingly looking to service both disability and home care.
Disability has been arguably disrupted more than the deregulation of home care, with the introduction of the National Disability Insurance Service (NDIS). 40% of new operators are also targeting the disability sector, while the incumbents in disability are restructuring generally towards direct services and what they know, they are not targeting aged home care.
One stop shop still rules
Incumbent operators are still largely holding onto their direct services work force, albeit losing some share to consumer preferences and requests, internal direct care work forces are still in place.
Agencies are pivoting
A handful of existing providers were labour hire agencies that have expanded into direct provider roles whilst also keeping the service provision facet of the operation. There are increasing concerns over client poaching by the incumbents in this sector.
Home care is generally staying local
Over 90 % of new Providers are targeting only one jurisdiction. Only several Providers are targeting three or more jurisdictions. Generally, homecare operators are not going national, they are staying local.
High care is in demand
Presently homecare packages are split, approximately 30% high care and 70% low care, with over 80% of the waiting list, of over 80,000 consumers, looking for high care. Wait times can exceed 12 months to get on a home care packages
Consumers are not contributing
It is becoming more common that consumers are only contributing to their home care package, if they are means tested and required to pay. The government subsidy is reduced by the means tested value and providers still need to deliver services to the value of the package.
With competition between providers and the discretionary nature of consumer fees (recommended to be approx $10 per day), providers are increasingly charging significantly less or nothing, avoiding collection administration and marketing care services that are solely government funded.
Some providers, in breach of the spirit of the packages program and in breach of guidelines, have allowed means tested consumers to not pay and only delivered care to the value of the government subsidy.
The CHSP program is a very valid alternative to a home care package for an individual
The $1.7 billion Commonwealth Home Support Programme (CHSP), that provides entry-level home support for older people, not the case managed support of a home care package, is competing effectively with the low care home care packages (level 1 & 2), as its effectively free, without any consumer contributions. Wait lists for level 2 homecare packages are not high