Not for profit: Taking the lead on aged care

Western Australian aged-care providers in the not-for-profit sector are increasingly taking stewardship of local government aged-care facilities, as councils face more complex regulatory requirements and rising service provision costs. 

Last month, Baptistcare WA assumed management of the Shire of Brookton’s 43-bed Kalkarni Residency, after winning a competitive tender for the role.

During the same period, the City of Fremantle awarded management responsibility for two of its outreach services to aged care provider, Silver Chain.

The deal, which transferred the management of the city’s community aged-care packages and its home and community care domestic assistance services, was the latest in a series of agreements between the two organisations.

In July 2006, Silver Chain took over the city’s meals on wheels service, followed by a day centre in October.

Silver Chain also acquired one of the city’s aged-care facilities in recent years, and eventually transferred the additional beds to one of its existing facilities.

Silver Chain home support services operations manager Olive Wright said the latest deal reflected the competencies of each organisation.

“Basically, this is our business – the City of Fremantle is wanting to move to servicing at a senior citizen level,” she said.

Tenders are also currently open for an aged-care facility owned by the Shire of Mundaring.

Baptistcare WA chief executive officer Ken Ridge said increasing regulatory requirements and financial pressures would continue to put pressure on community aged-care providers.

“Local councils are realising that aged care is not their core business,” he said.

Baptistcare’s recent agreement with the Shire of Brookton follows three previous occasions where the aged-care provider assumed total ownership of community owned aged care facilities.

Mr Ridge said these acquisitions had resulted from caretaker organisations’ inability to continue to manage facilities, or from financial difficulties.

Baptistcare is currently in the second stage of tendering for another local government aged-care facility.

The outcome of that tender should be known within the next two weeks.

Mr Ridge said previous instances where local government organisations transferred aged-care services to for-profit providers had taken the sector by surprise.

“I would have thought it would have been more consistent for local government to go within the not-for-profit sector,” he said.

Mr Ridge said he expected some small aged-care providers to exit the industry, due to increased regulatory requirements.

He said providers would face further pressure from the baby boomer generation, as they sought to maintain a particular lifestyle. 

‘‘These are the processes we’ve all got to respond to,” he told WA Business News.

“It’s a matter of making sure that what the community has built up isn’t lost, and continuing to serve the community by adding value to what is given to us.”

Southern Cross Care Inc chief executive officer Stuart Flynn said the organisation had previously tendered for local government aged-care facilities and would continue to tender for others as they became available.

Southern Cross Care has operated a facility for the City of Rockingham for the past year, which was previously managed by another not-for-profit organisation.

Mr Flynn said the organisation had done some consulting work with local councils on managing aged-care facilities.

“They all come to the same conclusion – there are now so many regulations and the business is so complex that councils want to get out,” he said.

Mr Flynn said it was beneficial for councils to transfer management to not-for-profit aged-care providers, usually without a loss of assets.

“It’s a good arrangement in that it ensures the ratepayer gets the service, but without the councils having to provide that themselves,” he said.