There's always going to be a commercial versus care argument among teams in aged care. Finance, or the “F” word, has been largely taboo. Talking about financials in aged care organisations is really frowned on because it flies in the face of what people think constitutes care.

The thinking is that all the focus should be on the care, not on the finances, because many aged care facilities and hospitals are not for profit, so there should be no suggestion that there is any motivation to make money from people.

Although this is morally worthy, in order to provide great care, an organisation has to be financially sustainable—even if it is not for profit. So where do the difficulties stem from, and what needs to be done to create change?

Example – Finance Is A Critical Factor

My husband, Ash, was working with a cross-functional group of people from an organisation, with staff from frontline through to the CEO. He asked them to brainstorm the critical success factors of a sustainable business. They came up with heaps of things—a list of over 100 factors.  

Ash looked at the list and said that it was really good, but that something really important was missing. He asked them to think about what that might be. They went away and came back 15 minutes later, with a few additional points about safety. However, they had already captured safety in the original list. Even with quite a lot of direction, they just couldn't get what was missing.

Eventually, Ash said, “Finance. What’s missing from the list is finance.” The group’s response was, “Oh, no, no, no, we don't talk about that.”

When finance is seen as a dirty word, then finding the win-win for the customers and the organisation becomes close to impossible.  

Consumer-Directed Care

There is a shift in the aged care industry towards consumer-directed care. With the Government providing funding directly to the client, rather than to the aged care facility or organisation, the client is able to shop around and find the facility that they feel best meets their needs. This is good for the client, but for the facilities there is inevitably going to be an increase in market competition and a need for greater commercial capability.

Not only this, but also switching from funding going to the client rather than the organisation will create a cash flow gap. Moving funding provided upfront by the Government, based on how the organisation has been assessed, to billing the client after the service means that organisations that are already very cash strapped, since the funding model is largely broken, are in danger of falling into this gap when the changeover happens.

If you're living in reactive mode, so that you’re not preparing for this, then there is a great deal of potential for problems to arise.

Changing The Relationship

With customers’ being able to shop around for a better price, better service and better quality, then the need to ensure the facility is providing an attractive package is key to the continued success of the organisation.

It makes perfect sense to be building relationships with existing residents, in order to ensure they are happy to stay in your facility. Regular customer and family feedback, staff satisfaction level and capability of staff are factors that family members and customers take into account. The CISCA is able to capture all of that information as well as provide each site and organisation with a net promotor score (NPS). What we are finding with our results is that some sites have an outstanding NPS; which is incredibly helpful when attracting future employees and customers.

Much of this relationship building is in the hands of frontline staff, who are the customer-facing employees. CILCA data shows that the closer you get to the frontline, the bigger the gap becomes in terms of people seeing the impact they can have on the financial sustainability of the business; hence there is a great need for nurses and carers to be educated about why it is so valuable for them to understand the relationship between finance and care.