What do we want aged care to be? Innovative is a good place to begin

The Royal Commission into the age services industry has raised questions about the industry’s ongoing viability in the face of numerous challenges including:

  • Are regulations adequate?
  • Is there enough funding from the government?

These questions are valuable to ask. With Australia’s population ageing and life expectancies growing the expectations in terms of the quality of care and quality of life also increasing. The demand on and for aged care services is going to be enormous and the industry is going to have to prepare by becoming more innovative.

But innovation across an entire industry is easier said than done.

Innovation in age care services: Overcoming barriers, a KPMG collaboration with innovAGEING highlights five key areas the industry must address to become more innovative and future-ready.

  1. Set a strategic vision for the industry

What do we, as a society, want aged care to be? The Royal Commission study into the sector found older Australians overwhelmingly prefer staying in their own home over entering residential care. With the number of Australians aged 75-84 forecast to double to 2.6 million people in the next thirty years, service providers need to accommodate the wishes of those who choose home care and those who have to enter a residential care facility out of necessity.

These trends are important for the government and peak bodies to take into account to form a holistic long-term strategy. Without this there is the risk of discontinued planning activities that don’t build towards a common goal.

  1. Increase industry connectivity and cooperation

Without collaboration on innovative technologies or practices, there is a risk they will never gain the traction needed for sector-wide adoption. Many industries employ the use of accelerator programs that match innovative start-ups with established companies, facilitate seed investments and educational training. We support several such accelerators – like the Mutuals Fintech Accelerator Program which matches mutual banks with fintech startups.

Some aged care providers have independently partnered with startups to find innovative solutions. It’s a good start but to really take innovation to the next level, providers have to be willing to collaborate – particularly in areas where they are not already ultra-competitive.

  1. Align innovation to the needs of older Australians

Innovation always needs a business case but is most effective when it is also customer centric. The customer base for the aged services sector are older Australians and their families, who are often nervous about entrusting the needs of a loved one to an organisation. Providers must demonstrate that they are constantly changing the way they do things based on feedback – which is why utilising living labs to develop service innovations in the sector is something that should be pursued.

Living labs are user-focused environments where aged care residents, providers and academic institutions can collaborate to help develop and trial products that meet the needs of residents. A well-established concept overseas, the Australian life-lab ecosystem is still in its infancy with the Global Centre for Modern Ageing opening one in Adelaide just last year. Stakeholders must support these kind of initiatives.

  1. Look Beyond Age Services

We can all learn from others and so can the age services industries – be it mental health services, finance or hospitality.

Useful innovations in regulatory regimes for other industries may have potential application to the aged services sector. In the financial services industry, ASIC realised that the industry’s regulatory regime can act as a handbrake on the development of new business models and products. In response they developed a ‘fintech regulatory sandbox’ where eligible companies can test products for up to a year without need for a license. The aged services sector could look to implement a similar regulatory program in order to test ideas with customers before fully implementing them.

The sum of different views will support greater opportunities for innovation.

  1. Be Investment Ready

Innovative new products and service will not amount to anything unless they can be brought to market easily. Service providers need to be able to evaluate if a good idea can financially viable when deployed at scale – this will be easier if the capacity exists to facilitate investment from interested parties.

The Australian Government already provides capacity-building grants for not-for-profits, allowing them to invest in capital-raising measures. Many providers in the age care services sector are also not profit-taking institutions – the government should look to assist them as they cannot as readily receive private investment as their for-profit counterparts.

But it is worth remembering that this is not just about the government, providers, regulators or start-ups. Every factor of the industry have to take joint ownership of innovation and one or two practical steps forward so that we can underpin the long-term stability of the industry and improve the lives of older Australians.

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