The Tsunami of Change of Individualised Care Funding – thriving in the new paradigm!

Tsunami of Change

 

Estimated read time: 3 minutes

 

The tsunami of change propelling individualised care and self-directed funding in health, aged care, mental health, community care, disability and other community services sector organisations is gathering momentum! Who will sink, swim or surf this wave?

 

Thriving in this changing environment requires, firstly, understanding the new paradigm of individualised care funding – which entails new thinking, decision-making, action and risk-taking by Boards, CEOs and executive management.

 

The recent past has seen the shift from input-based block funding to output-based and individualised care packages and tentative moves to self-directed funding. This has been, and still is for many service providers, a fundamental and somewhat challenging shift in their service delivery of government-contracted services to clients. But bigger and more pervasive change is still to come – one being the impact of individualised care funding where the individual client moves front and centre as the central and direct party in contracting services with organisations marketing and supplying a range of support services.

 

A range of recent high-impact Federal and State Government reports have reinforced the magnitude and immediacy of change to individualised care and self-directed funding, notably for service delivery organisations marketing and providing health, aged care, mental health, community care and disability support services. As the level of funding dollars increases there will be greater pressures on choice, efficiency and effectiveness – culminating in greater competition, viability and sustainability not only from other not-for-profit organisations but also from privately owned for-profit organisations.

 

Most critically, this change means that service delivery organisations will no longer formally contract only with government agencies for government funding and will now need to actively market themselves to attract and retain clients.

 

The financial and social costs of organisation change required to thrive in this individualised care funding environment is under-estimated by many organisations. Understanding, planning and preparing for the financial and legal implications of individualised care funding are critical to all organisations – particularly those small to medium “niche” organisations that lack safety-net financial reserves in their Balance Sheets.

 

The financial and legal implications for Boards of this new paradigm of individualised care funding includes:

 

  • Increasing competition will require Boards to better understand the solvency, viability and sustainability risks of costing, pricing and contract management when marketing, tendering or offering services contracted formally with many individual clients rather than a few government agencies
  • Size and service “footprint” issues will require greater cooperation, networking, collaboration and integration of service providers and services.
  • As big service providers get bigger, the surviving smaller service providers will fill the gap for niche, specialised or highly-personalised services leveraging their local or specialised skills and knowledge
  • A balancing of maintaining a focus on the “big picture” systemic and structural issues, whilst being funded for “individual” needs
  • Substantial improvements in Board governance systems so as to assure statutory and contractual compliance and accountability to contracting individual clients. The elephant in the room !
About Ken Leigh

Ken Leigh is a Barrister-at-Law (NSW, Qld and High Court) and qualified Accountant with over 30 years practical experience in accounting, management, legal, training and consulting services to Boards and Executive Management teams of a wide range of community service organisations throughout Australia and overseas.

Comments

  1. Tim Ritchie says:

    Thanks for sharing the insights Ken. Understanding the shift required to move from inputs through outputs to individual results is a development curve that looks for sure like that wave you are using! Good news is we are activated by this discussion paper and energised to be proactive. The need to be transactional as a core of the business is not a new concept but, for sure, the orientation to a market with higher and different expectations will be a key challenge.
    Kind regards

  2. Yes Ken corporate governance is the key to future board directions

Speak Your Mind

*