industry & reform
Sharing is caring
Why creating shared value is the
future of aged care.
By Rhod Ellis-Jones
A
ged care businesses need to
create strategies for achieving
sustainable financial returns,
now more than ever. Stressed by the
royal commission’s findings, they need
to do so while delivering greater value for
customers and meeting the social needs
of older people, families, communities and
broader society.
‘Shared value’ is one way to approach
this. It’s a business strategy designed to
solve social issues profitably by leveraging
the resources and innovation of the private,
non-profit and government sectors to
create new solutions to some of society’s
pressing challenges.
WHAT NEEDS TO CHANGE, AND WHY?
As in any other service area, the
government wants to spend less per
recipient on health and care services,
not more. The question it faces is how to
achieve this without reductions in quality
and safety. The aged care regulatory
system does not have the broad, agile and
integrated approach to risk response that
is required.
The aged care roadmap set the pathway
to a market-based system. People with
means will be required to pay more for
aged care; they are also likely to expect
more for that increased investment.
More investment is required to track
demand and consumer expectations of
quality and accommodation – that means
growth in major not-for-profit and private
sector companies who can leverage scale
and equity.
SHOULD COMPANIES PROFIT FROM
AGED CARE?
We live in a capitalist democracy. When we
go to work, we expect to be paid for doing
a good job. When we put money in the
bank or buy shares, we expect a return.
In a competitive context, the profit
motive drives innovation to achieve
12 agedcareinsite.com.au
efficiency and marketable advantages such
as customer experience and technology.
Billions of dollars – much of it in retail
superfunds – has been invested in meeting
the challenges of an ageing population
and the related demand for care. There is a
cost to this capital, just as there is any other
source of funding, such as a bank loan.
We should be encouraging this
investment as an alternative to other
industries such as fossil fuels.
Rather than questioning whether profits
are good or bad, we should consider
whether the standards of care and
experience can be improved as a result of
the profit motive.
“Whilst confronting, the royal
commission interim report presents
an opportunity for aged care providers
to innovate their service models and
build new partnerships to address the
growing issues the sector faces.”
– Helen Steel, CEO,
Shared Value Project
CREATING SHARED VALUE
In aged care, shared value can achieve
outcomes at multiple levels:
1. Structural design and reform:
defining a sustainable future
state and the roles of providers,
government, investors, educators
and consumers in achieving it. The
Australian government has already
successfully used shared value as a
co-design framework in its foreign
affairs and environment portfolios.
In aged care, shared value framing
provides a pragmatic means to
address revenue source and mix, as
well as the enabling environment,
at arm’s length from the challenging
political context.
2. Business strategy: identifying and
planning for achievement of social
and business value across provider
and supplier organisations and
operations. Aged care examples
are social procurement, workforce
redesign and health services
integration.
3. Social innovation: designing
products, services, gateways and
experiences to address social needs
profitably, and therefore sustainably.
Examples of outcomes in aged care
include repurposing services and
assets for families and communities,
‘healthy’ building design and
technology adaptation.
PAYING FOR CHOICE
Baby Boomers are entering aged care
and, fiercely independent, they want to
minimise the change in their lives when
receiving care. They are also used to paying
for quality. They expect choice – and so
do their Gen X children.
The aged care system – the Act,
regulations and industry standards – need
to evolve to allow the more personalised
care and supporting services.
The challenge is to incentivise and not
stifle the innovation and therefore the
quality of responses.
The job of business is to use shared value
as a framework for designing choices – to
minimise complexity along the customer
journey but ensure choice is delivered,
profitably.
PEOPLE SEEK PURPOSE
People want to work for companies that
are admired for their performance and
purpose. Aged care needs to attract an
additional 400,000 workers over the next
20 years to meet demand.
But it’s not just about volume; the sector
needs people who find personal reward
in caring for others – people driven by a
sense of purpose.
By using shared value as a framework or
business evolution, purpose will always be
part of the performance narrative.
It enables a much more honest
discussion with staff about the
fundamentals of business and, alongside
or through employees, a more honest
discussion with families.
GETTING STARTED
The Australian government has invested
billions in the aged care sector and worked
consistently over the past two decades
to build the system, deliver the aged care
‘gateway’ and establish agencies with
important standards and assessment
frameworks.
It now needs to create an enabling
environment for businesses (whether private
sector or not-for-profit) and challenge them
to design a sustainable future.
Start with shared value. ■
Rhod Ellis-Jones is the principal of
Ellis Jones, an Australian consultancy
creating social impact through research,
strategy, communications and design.
Ellis Jones has a dedicated health and
ageing practice. Rhod is also the founder
and deputy-chair of the peak practice
body, the Shared Value Project.