iCareHealth and Telstra Health recently hosted a series of lunches in Brisbane, Melbourne and Sydney with senior aged care executives to share ideas and discuss how technology is changing the face of aged care. Joining iCareHealth Managing Director Chris Gray and the executive team were Telstra Health Managing Director Shane Solomon, Community Care Lead Bronwyn Pike, Acting Head of Provider Applications Michael Boyce, and Head of Health Consumer and Services Wayne Liubinskas. With a wealth of knowledge from the health and IT sectors, the discussion centred around how aged care providers can remain sustainable in the long term. In part one of this two part special, we look at some of the key issues discussed throughout the lunches, including sector consolidation and funding changes.
Connecting Australia’s healthcare sector
Executives across the lunches learned that Telstra Health was created in 2013 with the goal of creating a more connected healthcare system in Australia. Telstra Health believes it is essential to connect aged care providers, hospitals, GPs, health insurers and pharmacies in order to create a comprehensive eHealth record for all consumers.
Backed by experience
Shane Solomon was engaged as Managing Director of Telstra Health, having previously spearheaded a comprehensive eHealth strategy for the 57,000 staff within the Hong Kong public hospital system. Shane’s work as Chief Executive of the Hong Kong Hospital Authority and as the National Health Lead at KPMG gave him the confidence to know that a truly connected, consumer focussed eHealth system in Australia was not only achievable, it was essential.
Investment supports commitment
In the last year, Telstra Health has acquired a significant stake of the leading eHealth market; including Fred IT, Dr Foster, Emerging Systems, and iCareHealth. The approach to acquire leading eHealth vendors was chosen to ensure Telstra Health would inherit a concrete understanding of the needs in the market, and could therefore enhance and develop products that matter the most to healthcare providers and consumers.
In addition, Shane explained that Telstra Health recognises that data analytics are the key to improving clinical governance and driving financial sustainability across the sector. Telstra Health found that acquiring successful healthcare sector vendors was the most effective way to consolidate and assess established data.
Greater financial challenges
During the course of the lunches, aged care providers discussed the challenges of maximising their funding following changes to the funding model and payroll tax supplement. Former Victorian Minister for Health, Bronwyn Pike, detailed that in a 2013 Department of Social Services analysis, it was found that 30% of residential aged care providers are in deficit, while 16% have a negative Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA). For many of the 70% of residential aged care providers found to be profitable, their margins are increasingly small.
Embrace technology to remain sustainable
Shane Solomon, who has previously worked in the aged care sector as Group Chief Executive of Mercy Health and Aged Care, explained how aged care providers have no choice but to embrace technology if they want to compete in the changing market. Shane explained to the panel of aged care executives that by using effective eHealth solutions, providers can reduce human error, connect effectively and improve productivity.
Aged care sector is consolidating
With the consolidation of providers increasing throughout the aged care sector, finding ways to remain sustainable is more important than ever. In the last year, Japara Healthcare, Regis Healthcare and Estia Health all made major acquisitions across the sector, consolidating tens of millions of dollars’ worth of providers.
Bronwyn Pike explained that consolidations will become common practice as large providers have the resources to prosper in an increasingly tight market. Bronwyn detailed the forecasted demands of the aged care sector over the next ten years; including rising costs, an ageing population, and a need for providers to effectively market themselves as Consumer Directed Care (CDC) increases consumer expectations.
Want to learn more? Read part two of our wrap-up to find out how technology can support best practice and staff retention. Plus, you can join our conversation by commenting below.