Complex Council Care vs Demanding Private Pay
Evidence of the projected polarisation of homecare has just arrived in our inbox. Provisional statistics released by the Health and Social Care Information Centre suggest increasing demand for, but reduced provision of, council-funded homecare. On one hand, Social Services eligibility criteria are being tightened and provision focussed only on individuals with critical needs; the number of adults receiving care has dropped by 29% from 2008-09 to 2013-14. Expect joint commissioning initiatives to continue to drive this focus on service users (or patients) with more complex needs.
On the other hand, as a result of this ‘rationing’ of council-funded care, we will see strong growth in private pay. For the period 2008-09 to 2013-14, the ‘demand’ in terms of people approaching their council for care increased by 6% vs the drop in ‘supply’ of 29% noted above. Families of the frail and elderly are simply going to be forced to pay for their own care (at least within the Dilnot cap of £75,000).
The resulting polarisation of homecare will challenge providers to an extent never really seen before. Providers will need strategies for managing two distinct markets: either selling ‘complex homecare’ to procurement officers in councils or as retailers of homecare to the Trip Advisor or Amazon generation.
Will it be possible for providers in the future – at scale – to cater for both markets? We are not sure, but we are sure that these two markets will require fundamentally different strategies and capabilities.
Council-funded: More complex, increasing need to evidence outcomes
In order to successfully compete for local authority-funded care, providers will need to develop their approach to both sales and delivery. Consider the following issues:
Move to cost-effective outcomes, less focus on cost per hour: Councils are increasingly realising that sole focus on cost per hour does not actually reduce the overall cost to the council. Although there is a lack of a standard framework, new contracts are increasingly incorporating new measures of outcomes. The focus on outcomes will become even more intense as the unstoppable train of integration between health and social care continues to pick up pace.
Dramatic reduction in number of providers: As a result of the more complex, outcomes focussed commissioning process, the number of providers a council can meaningfully engage with is going to shrink dramatically in the next few years. We have already seen a number of examples where the number of providers has dropped from 30 or more to five or fewer providers.
Increased operational risk: Safeguarding risks will increase substantially as service users have increasingly complex needs. Missing a visit may be deemed less critical if the job is to make tea and complete household chores. Missing a visit, failing to check medication or failing to spot pressure wounds for a lady in her 90s is very different. We project that in less than 5 years, it will be commonplace for homecare providers to be penalised for avoidable hospital admissions.
Cluster or Cohort Approach is the Future: The logical end-point of outcomes-based commissioning is use of clusters or cohorts. Here providers are ‘given’ a group of service users (typically for a geographic area) and must demonstrate outcomes across this group. The commissioner maintains a degree of competition by benchmarking performance by cluster. Penalties and bonus will be awarded based on the performance of the cluster. The Care Bill will further facilitate the move towards a cluster approach. According to the Bill, councils will in the future be allowed to contract out the actual assessment process and the decision on eligibility.
The introduction of electronic call monitoring maybe 10 years ago was driving by a need for councils to understand they got ‘value for money’. As the definition of value for money changes, expect councils to want clear evidence of care and outcomes delivered to become norm.
Private Pay: Fulfilling demands of the Trip Advisor consumer
Homecare providers see many attractions in the private pay market; clear demand growth due to demographics (and no/limited ability of the state to pay) and better rates. Cost of private pay is often 25% or higher than what councils pay. All sounds good, however….when you spend your own money..
Sales & marketing is more like retailing: For providers used to selling big contracts to local government, this is very different. Successful sales & marketing strategies are going to be more like retailing or the hospitality sector.
Buying based on ‘What is your rating?’: A recent PhoCusWright study suggested that 80% read at least 6 – 12 reviews prior to booking a hotel or a holiday. Privately paid homecare will not be much different. Delivering a great service that meets the expectations of the Trip Advisor or Amazon consumer will be critical. Late visits, poorly or rude staff are not going to work.
Tracking care delivery online: The web is not only going to impact the decision to purchase. The Amazon customer will expect full online access to the service. A portal through which delivered and planned care is available, together with online payment and exchange of communication with the provider will become common place. A worried daughter may want an SMS message every time a carer comes to her mother and detailed tracking of the medication she takes or the food she eats.
In 2013-14, 1,267,000 adults in England received a social care services from their council, down 5% from 2012-13 and by 29% since 2008-9, show provisional official statistics released today by the Health and Social Care Information Centre.
The figures reflect the substantial cuts to adult social care funding that have taken place in recent years. Last week, the Association of Directors of Adult Social Services revealed that budgets have been cut by 26% from 2010-11 to 2014-15, after inflation and demographic pressures are taken into account.
The HSCIC also reported that more people are approaching councils for adult social care support, despite fewer receiving support. There were 2,157,000 contacts from new clients in 2013-14, up 4% from 2012-13 and up 6% from 2008-9. An increasing proportion of them were dealt with at the first point of contact – 54%, up from 53.4% – with a smaller proportion requiring an assessment or commissioned service, continuing a trend.