PROVIDERS CONTINUE TO MAKE GOOD RETURNS ON HOME CARE PACKAGES
Under the changes implemented in February 2017 Home Care Package (HCP), once allocated a package from the national allocation system a consumer has 56 days to choose their Approved Provider. Geographical boundaries for Approved Providers have been removed and home care is an increasingly competitive, market driven environment.
Comparing a recently released report on HCP financial performance for Sept 2017 to the report same produced for December 20162 shows that top quartile providers continue to achieve good profit margins and have increased their direct service provision hours.
In Sept 17 top quartile Band 2 (provider income $30 to $50 per client per day) providers are making $4,967 per annum per package; an increase of 11.3% on the Dec 16. Nice work!
Although the average profit margin for top quartile providers of Band 4 (provider income of > $100 per client per day) packages in Sept 17 has decreased by 4.8% compared to Dec 16 this group of providers is making $11,683 per package per annum. Still nice work!
Responding to this competitive environment Ideal has seen providers revising their pricing methodology whilst maintaining a higher level of service. To achieve efficiencies administration costs have been reduced; case management models have been revised; and cost of direct service has been reduced. Revenue utilisation, the ratio of total revenue charged to clients compared to total revenue available in a HCP has fallen.
WHAT SHOULD YOU DO
The aged care industry is attractive. Smart businesses carefully analyse their performance, identify opportunities for improvement, re-design their service offering and business model to compete in the consumer focused market driven environment.
The Ideal Consultancy has worked with providers large and small all over Australia to strengthen their business. Contact us on 1300 179 675 to find out how you can best position yours.