Public Residential Care; Privatisation – Ethos & Reality LASA State Congress & Exhibition Trevor Carr Chief Executive Victorian Healthcare Association

Ethos & Reality Ethos – change to implement reforms from Living Longer Living Better Reality – market withdrawal – metropolitan Melbourne

Public Sector in Victoria Public sector plays crucial role in regional and remote locations. Fills market gaps, ensures service availability and continuity The largest provider in the State – Currently 6000 (12.5% of total) – 1060 of these metro – 4940 without metro beds = still over 10% of Victorian market

Public Sector in the Market Environment Philanthropy to competitive reality Offering a great product that your community wants and needs – Adapting to trends Positively market that product – Changing the dialogue to identifying our strengths – Whole of organisational approach – Focusing on consumer experience

Trends in the Aged Care Sector: Increasing consumer expectations on quality, type and flexibility of care – Increasing consumer choice and control The transition of the aged care sector to a competitive marketplace Rising resident acuity and related increases in demand for high-level clinical care and shorter resident stays

VHA PSRACS Readiness Project Summary State Government funded project Sector led Purpose: to provide support in addressing the federal aged care reforms Scope: all services providing PSRACs Runs until end of 2014

VHA PSRACS Readiness Project Outcomes Development of a Financial Model and Supporting documentation Operational Readiness Tool Regional forums Release of Targeted Information Products Weekly Information Bulletins Point of contact and enquiry for PSRACS

Reform & Change Management - I A well-prepared aged care provider has: An aged care vision, strategy and action plan An engaged board, senior executives and staff team who understand the reforms and how they will affect their own roles within the organisation An embedded and shared commitment to continuous improvement and best practice

Reform & Change Management - II A workforce and cultural change-management strategy, including training and other staff engagement activities A detailed consumer and community engagement strategy A plan to successfully compete in a market-driven sector A comprehensive understanding of revenue and cost structures 9

Reform & Change Management - III An understanding of future infrastructure requirements in a changing sector environment Up-to-date systems ready for the changes to service structure, provision and billing after 1 July 2014 A culture of accountability and responsibility for quality and risk management between board, executive, staff and consumers.

Policy issues Unclear position re growth Access to capital - barriers

PSRACS Maximum accommodation prices: Metro * Prices not available for 6 Metropolitan PSRACS as at 24 May 2014

PSRACS Maximum accommodation prices: Metro Maximum RADMETROSTATEWIDE $ 0-250K18 $ K1889 $ K245 $ K128 $551K and over 00 Total22170 MAXIMUM AVERAGEMETRO MELBOURNESTATEWIDE Highest RAD $ 344,000 $ 374,000 Lowest RAD * $ 330,000 $ 339,000 * Not shown above

PSRACS Maximum accommodation prices: Rural Maximum RADRURALSTATEWIDE $ 0-250K78 $ K7189 $ K4345 $ K2728 $551K and over 00 Total MAXIMUM AVERAGERURALSTATEWIDE Highest RAD$ 371,000$ 374,000 Lowest RAD *$ 334,000$339,000 * Not shown above

The reforms are positive These reforms are better for consumers – More choice, more control, more transparency, better access If implemented effectively the reforms present an opportunity to the public sector Setting a positive culture around the reforms and upcoming change is crucial

Reality – the Melbourne market

PSRACS profile – metro Melbourne NetworkLocations Generic Places Mixed Places APMH Places Specialist places Total Places Eastern Health St Vincent's Health Alfred Health Peninsula Health Monash Health Austin Health Melbourne Health Northern Health Western Health TOTAL ,030

PSRACS profile – metro Melbourne Issues:  Services for aged people with mental illness not well established in the non-government sector – (? ongoing support to new providers by government)  Location typology – freehold, crown land, colocation  Some facilities sub-scale (<30 beds)  Variable fabric condition  Transmission of business issues – public sector wages

PSRACS profile – metro Melbourne Options: Transfer as is Transfer with development potential Transfer with site master plan for redevelopment Relocate off site (the majority of beds in scope)

Invitation to register: The Opportunity The Department intends to select a prequalified panel of service providers that will have the opportunity to: ► Work in partnership with the Department to develop options for reallocation of places and investment in capital developments or redevelopments ► Gain critical mass in the future of aged care services provision ► Deliver complex residential aged care services across metropolitan Melbourne.

Invitation to register: Objectives The objectives of the Department are to: ► Maintain the number of aged care places available to Victorians, and continue the high level of service quality ► Achieve a measured reallocation of public sector managed residential aged care places to non- government providers in the Melbourne metropolitan area ► Promote the provision of responsive and innovative delivery of aged care.

Progress: ITR closed in February Due diligence of applicants underway First round offers late 2014 (<500 beds and 3 land bank sites)

Thank you