Agility needed for a changing aged care sector

April 27, 2017

Remember the days of excessive mobile phone bills? For most of us those days are gone, as we ‘bundle’ our phone and data service. Home care pricing will likely follow a user-demand model, adjusting as providers and customers settle into the world of consumer directed care (CDC). Grant Corderoy from StewartBrown spoke at a recent breakfast in WA, citing early financial performance results from CDC in their ‘Aged Care Financial Performance Survey’ (the largest quarterly benchmark in the aged care sector). He sees the ‘bundling’ of services as an opportunity to balance consumer choice whilst maintaining financial margins.


Do more options equal greater choice?

Choice and flexibility for consumers are key priorities for Care Options. The ability to engage with people and find out what is really important to them can’t be underestimated. Our Home Care Package client, Norman Hill, was struggling to get out and about until we researched together and found a new light weight, collapsible scooter that easily fit in the boot of his car. Mr Hill’s package is flexibly priced, to enable optimal choice.  

Finding the optimal level of choice can be tricky though. A 2006 Harvard Business Review article from Barry Schwartz states “there can be too much choice; when there is, consumers are less likely to buy anything at all, and if they do buy, they are less satisfied with their selection” and that “excessive choice can produce ‘choice paralysis,’ but also that it can reduce people’s satisfaction with their decisions, even if they made good ones.” The famous jam experiment, published in 2000 by psychologists Sheena Iyengar and Mark Lepper, found that six varieties were more appealing than 24. The number had a huge impact on the likelihood of purchase. Other studies have confirmed this result: more choice is not always better.

Balancing choice and price

We are piloting a ‘bundled approach’ to home care, offering choice and flexibility to consumers, with increasing features and price. The challenge as an organisation is in preparing for the market changes and ensuring staff understand and can communicate what choice and flexibility is for consumers.

Finding the right people

We’ve chosen a different service delivery model for our packages, recruiting clinical staff and highly skilled customer service staff. We recruited an outstanding candidate, who had worked in retail banking for many years. Her banking background enabled her to work closely with consumers to develop and maintain their budgets, something colleagues and consumers have found incredibly valuable.

Can we please those seeking low cost and value?

We believe we can, but we need to go back to the beginning to do it effectively. Resounding feedback from home care consumers is that they want to be able to choose exactly when they receive services and who delivers them. This is achievable, but can be costly. Back to the ‘bundling’ of services. If we create ‘gold’, ‘silver’ and ‘bronze’ bundles of care, consumers can choose the level of flexibility they are willing to pay for. A gold bundle could offer services exactly when a consumer wants it, delivered by exactly who they want. A bronze bundle could offer the same quality service within a four-hour service window. Managing consumer expectations is key, which is why we have invested so much time into getting the right people, with the right attitude and skills to work in this way.



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