Interview Synopsis

Australian home care economics

  • Multi Asset
  • Healthcare
  • Australia & NZ

Third Bridge Forum interviewed a former general manager at KinCare Health Services Pty Ltd for the second time in July 2019, during which he elucidated the economics behind Australia’s home care facilities.

Healthcare Provider KinCare’s Business Model and Broader Industry Trends

The specialist began by outlining the home care business model and its P&L structure. He explained the costs involved with offering home care solutions to individuals, paying close attention to the tier structure and the costs paid by government funding versus client contributions. They also compared the different pricing strategies between Home Care Packages and the National Disability Insurance Scheme.

Changing government regulations could potentially put pressure on clients to pay their home care providers in arrears as opposed to the current model, in which clients pay in advance. As a result, the former general manager suggested this could place additional pressure on small and medium providers with large salaried teams.

While explaining the differences between clients on a Level One package (i.e. the lowest-level package for relatively independent clients) versus a Level Four package (i.e. the highest-level package for individuals needing a great deal of help in their daily lives), the specialist explained the number of care hours required for each level, and the impact this has on the costs and amount of government funding provided for each patient.

As clients can now move from one provider to another, the specialist compared the conversion ratio from the entry-level Commonwealth Health Support Programme to GCPs. He explained that packages offering social need programmes were more likely to have a high conversion ratio of 75-90%. The specialist also discussed the ratio of customers following their customer care managers when the professional leaves a particular organisation to join another.

The former general manager ended the Interview by recommending areas where there are significant revenue opportunities.

To access all the human insights from Third Bridge’s Australian Home Care Economics Interview,  click below to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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