The aged care industry faces special challenges as Australia looks to the uncertainty of future waves of COVID-19 and the need for sustained vigilance. For aged care residents and their families, the health impacts of the disease itself have been complicated by the consequences of social distancing, alongside greater difficulties in accessing other health and wellbeing needs.
The aged care industry must continue to navigate an uncertain journey through the pandemic, coupled with responding to the final recommendations stemming from the Royal Commission into Aged Care Quality & Safety (now pushed back to February 2021). Success will require providers to be agile and remain vigilant to COVID-19 - supporting aged care residents, families and staff - while simultaneously adjusting operating models and response strategies.
Operational pressures and strategic uncertainty for the aged care industry
At its outset, leading aged care providers proactively responded to the COVID-19 pandemic, preparing for the propagation phase well before the first cases were detected. This included developing response plans and business continuity measures, increased infection control measures, and expanding on-site supplies of key personal protective equipment. The initial response has been largely successful, but how will it be maintained?
While the propagation scenarios remain uncertain, a comprehensive and sustainable response needs to consider the different stages the pandemic is likely to progress through towards resolution and the attendant impacts which must be managed. The following three-stage scenario for the aged care industry sets out the impacts in terms of residents, staff, operational, financial and strategic impacts.
Three-stage scenario for COVID-19 impact on aged care
| Stage | Propagation 0-9 months |
Post peak 9-18 months |
Post pandemic 18-36 months |
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Resident and family |
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| Financial |
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| Strategic |
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From crisis management to a new normal
Having navigated an initial crisis response, providers must now consider how to sustain their organisations under a protracted period of social distancing, heightened infection control vigilance and a broader economic downturn. It is conceivable that the aged care industry will be amongst the last to fully resume normal operations. Indeed, it is likely that the aged care industry will be substantially different by the time the pandemic is declared over.
A successful road through and then out from COVID-19 requires providers to reassess their operational and strategic context. While there is no ‘one size fits all’ solution for this journey, both large and small providers must each consider similar questions.
Evolve operating models
Operating models need to be sustainable under current conditions for an extended time period. Aged care providers should be alert to opportunities for service improvement and business sustainability while continuing to manage risk and support residents, families and workforce.
Resident and family experience
The initial health concerns, anxieties and fears of COVID-19 are compounded by the growing burden of physical distance from loved ones. This is exacerbated by the uncertainty and confusion that exists about how and when restrictions might be lifted.
In a time of uncertainty and heightened anxiety, providers have the ongoing challenge of keeping residents and their families informed and at ease as the pandemic progresses.
Increased use of virtual meeting platforms has been warmly welcomed by families and assisted in addressing the risk of social isolation for residents. While well received, the increased use of technology has required upskilling for some staff, families and residents in a short timeframe.
As physical distancing restrictions are relaxed, providers must have robust processes in place to facilitate visits, whilst upholding strict infection control and resident safety protocols. The use of screening and declaration tools, pre-booking of appointments and ongoing communication and education for families is imperative to create a safe and sustainable living environment for residents.
As Australia enters the next stage of the pandemic, providers should consider and reflect on the following:
- What does our customer feedback data tell us about resident and family concerns/needs to date? What did we do well and what can we improve?
- What innovations can be embedded to overcome physical distancing issues and are these sustainable post-COVID-19?
- Do we have robust processes in place to facilitate the safe recommencement of face-to-face visiting?
- What can we do to re-balance our focus on other non-COVID-19 health and wellbeing activities, to allow residents to reconnect better with each other, their families and community?
- How equipped do our staff and residents feel using technology and could we extend training and support to residents’ families?
People and culture
The intensity of recent months in preparing and responding to the crisis is likely to be taking its toll on many staff, compounded by the personal pressures of the broader economic and social environment.
COVID-19 has impacted the day to day activities of aged care workers. The ever changing nature of the pandemic has highlighted the need to continually provide staff with access to timely and appropriate ‘next steps’ information.
As some services move into the post-peak phase of the pandemic, there is a continuing need for staff to be vigilant while trying to regain some sense of normality. Providers will be required to pre-empt staff needs and ensure on-going training and education is in place.
The pandemic has magnified training and capability gaps of aged care workers. These gaps relate specifically to use of personal protective equipment; speaking up for resident safety; recognising and responding to clinical deterioration; infection control; and heightened mental health risks for residents with reduced family contact and pandemic concerns. This has prompted the need for innovative approaches to training, including the use of virtual training sessions and development of online education toolboxes.
Providers who have empowered their staff to be a part of the change have benefited from practical responses to COVID-19. Scenario-based planning has allowed providers to identify driving forces and critical uncertainties to develop plausible next steps, should the pandemic have further negative impacts on their organisation.
Providers should consider and reflect on the following:
What new supports do our people need for this next stage of the pandemic?
How can our leaders enable a shift in focus from crisis management to change and improvement?
What training and capability gaps have emerged and how will they be addressed?
Do we have alternative workforce options to address capacity gaps (e.g. from other health providers)?
Service and business processes
Additional tasks, changed processes and resource requirements have been deployed as part of the initial response. Other activities have been stopped altogether. Adversity is likely to have also created positive changes and innovations that now need to be embedded.
Disruption creates opportunities for growth and innovation, often shining a spotlight on issues and opportunities for improvement.
Long standing industry recommendations like increased digitisation and access to technology remain an ongoing focus. Investment in these recommendations is necessary to create a solid foundation for innovative and effective care solutions. Funding reform may assist in releasing funds for technological advances in residential aged care, however the focus could potentially be delayed due to the impact of COVID-19.
Many business processes such as procurement and inventory management have been stress-tested during this period. For some it has highlighted deficits in key processes, and complacency in contracted procurement with long-standing suppliers.
Providers should consider and reflect on the following:
Has our crisis response identified opportunities to improve efficiency in ‘service as usual’ processes?
Are there more efficient or effective ways to manage social distancing requirements?
How can we use technology to reduce workloads and costs associated with COVID-19 management?
Financial management
The additional costs of providing aged care amid COVID-19 are likely to be present until the pandemic is resolved, or may even become standard post-pandemic. However, the funding is unlikely to protect some providers from the dual impact of falling occupancy and RAD values. Early withdrawal of current funding supports will heighten this challenge.
Demand drivers have negatively affected occupancy in the industry over the past five years and are expected to continue to have a negative effect for residential aged care services. These include:
Generational change and greater resistance to living in institutional aged care settings
An increased proportion of government funded home care
Substitution through innovation of alternatives to funded residential aged care, such as assisted living and private aged care environments
Medical advances deferring entry to residential aged care
COVID-19 has placed increased pressure on two of the five core financial viability drivers for residential care: occupancy and staff rosters.
Some providers have reported a downturn in new residents wanting to enter care, resulting in declining occupancy which has affected the total ACFI paid as well as RAD and liquidity balances. Many services have also increased staffing levels to provide additional support and to ensure all additional requirements and resident needs are being met. The remaining three performance drivers (i.e. number of beds; ACFI levels; and RAD pricing) have been affected too, although to a lesser extent and for fewer providers.
The Aged Care Royal Commission has not yet interrogated issues relating to the Commonwealth funding of services. However, themes arising throughout the hearings so far suggest that there are significant concerns about the financial viability of the sector and its ability to consistently provide safe, high quality care that meets consumer and resident needs.
In this heightened period of uncertainty, financial planning for the future is now absolutely critical. Providers need to consider medium to long-term capital budgets requirements, as well as their more immediate operational budget needs. Refurbishment plans and asset replacements should be planned out well in advance to smooth the cost burden for when these need to occur. Proactive steps will allow for considered improvements to keep up with changing consumer expectations and needs.
Providers should consider and reflect on the following:
How does the new outlook following the COVID-19 pandemic impact our cash flow forecasts and finance requirements?
What other measures are needed to establish sustainability until resolution of the pandemic?
Can we now adjust our rosters back to pre-COVID-19 levels?
Do we have contingencies in place to manage a reduction in occupancy and RAD in-flows?
Are we accessing the available government support?
Governance and risk management
Crisis management teams and risk controls are likely now well established. The additional costs of COVID-19 and impact of lower occupancy levels are better understood. There is opportunity to reassess the outlook and scenario plan over a longer timeframe, while re-focusing on previously deferred priorities.
In the wake of SARS and MERS outbreaks, the UK’s health department sought to create and maintain a stockpile of essential PPE to ensure that the system, as a whole, was adequately prepared against future outbreaks. While stockpiles were created, failures in ongoing governance and complacency in control, monitoring and oversight in the years since left them with a shortfall. When facing the COVID-19 crisis, they found the stockpile was depleted, and the much of essential PPE that remained had expired, was unusable or required further testing to ensure its safety. This resulted in delays, further contributing to shortages as opposed to overcoming them.
Closer to home, some aged care providers have conceded that their pandemic response plans were either not sufficient or were non-existent. Lapses and non-compliance with existing infection control processes and procedures covering contractors, internal and external staff, as well as movement of personnel both within and between facilities were highlighted as major contributing factors to ‘hot spot’ clusters in both NSW and Tasmania.
Regardless of initial levels of preparedness, the current situation has seen providers develop or augment robust pandemic management plans. Providers have responded with the creation of Outbreak Management Teams (OMT) which include both executive and operational members. Other providers have enacted COVID-19 specific roles which sit within existing quality and clinical governance and people and culture teams.
The process of integrating newly developed management plans, updated procedures and infection management protocols within existing governance frameworks will no doubt be undertaken by all service providers in some form. It is imperative that these newly integrated processes be diligently monitored and sustained overtime to ensure that past failures are not repeated.
Providers should consider and reflect on the following:
When, and how, should our crisis management response be transitioned into our governance frameworks?
Are we maintaining sufficient focus on non-COVID-19 risks?
In particular, how do we continue to provide our Executive and Board with ongoing confidence that our business as usual system of controls continues to operate effectively, particularly in relation to safety and quality?
What practices will we embed and sustain over time and how do we plan to track and monitor this?
