Transcript Document

Better Outcomes for Older People
in their Communities
Indra Arunachalam, CPA
Manager Corporate & Financial Services
March 2011
Research Outline
o Mergers in the Not-For-Profit Aged and Community
Care Sector: Examination of Critical Success Factors
o Masters in Business Research
o University of New England
o Prof A Sheridan, Dr L Conway & Mr M Goldsworthy
o Mixed qualitative and quantitative methods
National Profile
o National data from Department of Health and
Ageing
o Financial years ending June 2003 to June 2010
o Number of services/outlets are increasing
o Number of approved providers are consolidating
23% increase of Services from 2003 to 2010 (DHA)
Total number of Operational Services/Outlets
5,000
4,800
4,600
4,400
4,200
4,000
3,800
2003
2004
2005
2006
2007
2008
2009
2010
10% drop of Approved Providers from 2003 to 2010
(DHA)
Approved Providers of these Operational Services/Outlets
1,650
1,600
1,550
1,500
1,450
1,400
2003
2004
2005
Hogan’s Review
2006
Accreditation
Round 3
2007
2008
2009
2010
Building
Accreditation
Certification &
Round 4
New ACFI Funding
Tool
Profile of the Not-For-Profit Sector in NSW & ACT
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Aged & Community Services of NSW & ACT (ACS)
277 members in 2010
53% of the residential places in NSW & ACT
74% of the aged care packages in NSW & ACT
Generally representing 20% of the Australian
approved providers
In-depth Interviews
Six Chief Executive Officers – ACS members
Four are based in the city, two in the country
Church and community based providers
Multi-service - residential, community, housing,
aged care, disabilities
o All provide services state-wide
o One is a multi-state provider
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Merger Reasons
Online survey of ACS members
In-depth CEO interviews
Strategic growth
Strategic growth & diversification
Target provider in financial strife
Financial viability
Strategic diversification
Risk management & compliance
Ensure availability of services in
local communities
Services in rural communities
Continuum of care
Changing demand and workforce
demographics that is driving the
coming national health reform
Merger Challenges
Online survey of ACS members
In-depth CEO interviews
Power politics from key personnel
Opposition from governing bodies
Leadership to manage conflict
Due diligence investigations
Merger agreement and plan
Accountable against merger plan
Cultural differences
Employee resistance
Manage change for integration
Keeping focus on normal business
Exit redundant staff with support
Poor shared vision
Lack of clarity in new structure
Alignment to gain confidence
New structure for new priorities
Definition of a Successful Merger
Online survey of ACS members
In-depth CEO interviews
Improved service quality
Better outcomes for older people
Increased diversity of services
provided
Continuum of care
Satisfied customers
Local community engagement
Positive financial outcomes
Financial improvement
Creation of different revenue
stream
Realisation of merger benefits as
per business case
Savings from economies of scale
Reduced unit cost
CEOs’ Components of Better Outcomes
o Continuum of care at competitive prices
o Social innovation that is client centred
o The vulnerable are looked after in their
communities
o Improved and increased services
Mergers or strategic partnerships are one way
to deliver these better outcomes
Critical Success Factors for Mergers
Online survey of ACS members
In-depth CEO interviews
Formalisation of the merger
process
Formalise the merger with a clear
business case and merger plan
Management of power, politics and Clear purpose and strategy to
personalities
manage power and politics
Due diligence investigations
Due diligence and risk
management
Cultural compatibility
Congruence in Critical Merger Success Factors
o Due diligence investigations
– legal, financial, systems and cultural
o Plan to realise merger benefits
– a business case and merger plan
o Change management
– culture, people, power and politics
Regional Story – integratedliving Australia
o Started in 1982 from four Meals-on-Wheels in the
Upper Hunter, NSW
o Through organic growth, mergers, and a demerger
today we are a regional community care provider
o Care for over 1,700 clients through 60 programs
o Employ 300 staff from 15 offices in NSW & QLD
o Engage in strategic partnerships to meet regional
community needs
Lessons Learnt
integratedliving’s lessons
Research findings
Be honest
Comprehensive due diligence
Due diligence
- legal, financial, systems and cultural
Good business case
Stick to core business
Agreement, plan and monitor
Plan to realise benefits
- Business Case
- Merger Plan with regular monitoring
Manage change and people
Allocate adequate resources
Manage people and change
- culture, people, power and politics
Questions ???
o Contact details:
Indra Arunachalam
0437 900 237
[email protected]