Adapting to Consumer Directed Care funding
Developing an approach for Unit Based Costing
Australian Multicultural Community Services (AMCS)
• Are a not-for-profit charitable organisation that supports
individuals from culturally and linguistically diverse
backgrounds
• Have an emphasis on providing community aged care
• Work closely with other multicultural organisations and initiate
capacity building projects in the rapidly changing funding and
service environment
About Consumer Directed Care
•
In July 2010 the Australian Government commenced Consumer Directed
Care (CDC) across all Australian Government funded Packaged Care
Programs
•
CDC allows people to have greater control over their own lives by allowing
them, to the extent that they are capable and wish to do so, to make
choices about:
•
▪ the types of care services they access
▪ the delivery of those services
▪ who will deliver the services and
▪ when they are delivered
The CDC model delivered in packaged care is an individual budget based
on a needs assessment and administered on the care recipients behalf, by
an approved provider, for an agreed percentage of the allocated budget
Impact of Consumer Directed Care
•
The introduction of CDC will require community aged care providers to
modify the way in which they deliver services
•
This will include a greater level of accounting requirements through the
collating of information for monthly statements detailing the cost of care and
funding received by clients
•
This new government funding model presents significant challenges for
NFPs to ensure financial viability
Building community sector capacity to adapt to a new funding
environment
•
A review of AMCS’s readiness to operate under a CDC model was
undertaken in partnership with GreatConnections, a program of Leadership
Victoria
•
GreatConnections links experienced professional volunteers with the needs
of NFPs in areas of business planning and change management
•
A skilled volunteer assisted AMCS to assess their organisational systems
and processes and build their capacity to develop and implement a unitbased costing model
•
AMCS developed a trial based on the assessment results and developed a
tool to assist other NFP organisations to adapt to a CDC environment
Developing a costing model
•
Following a project trial and analysis, and consultation with other aged care
organisations, AMCS established a CDC financial approach
•
The core components of the approach are:
▪ A costing model that outlines how to allocate expenses to programs, using
either a ‘labour’ rate or an ‘overhead’ rate
▪ A comprehensive tool available in Excel format to assist providers
determine these rates
▪ A training program developed to assist service providers transition to
CDC. It covers:
▫ understanding the real cost of delivering care,
▫ calculating appropriate labour rates, overhead rates and margins
How expenses are allocated in the new costing model
•
Expenses are allocated to programs in two methods, either directly or by
recording centrally
•
Directly includes the cost of care and wages (plus on-costs) incurred and
an hourly rate calculated for care workers and case managers
•
Recording centrally costs are allocated based on the resources intensity
of the program; includes direct labour, administration and general
overheads
•
An appropriate margin to ensure sustainability can be included in a direct
hourly labour rate or separated out on the client’s budget
Key learning: how to adjust to CDC model
•
Community sector organisations impacted by the introduction of CDC can
build internal capacity to adjust to the new policy and funding model by
ensuring:
▪ financial recording systems are in place
▪ relevant staff understand the overall costs of providing home care
▪ regular reviews and evaluation of care levels are undertaken
▪ increased attention to and awareness of costing activities
▪ staff are supported and guided in their transition to CDC
Conclusion
•
To ensure financial sustainability for NFP community service organisations,
the Building Community Sector Capacity to Adapt to a New Funding
Environment project has identified the systems and cultural changes
required for the future
•
The project outcome is a CDC tool and training program developed to assist
organisations to become CDC-ready
•
This resource is now available for use by other community organisations by
through AMCS
•
The project has also highlighted the benefits of partnership with other NFP
organisations, such as Leadership Victoria, to access expertise which may
not be available ‘in house’
Further information
•
Further information on the CDC tool and training program developed
through this project can be obtained by contacting Australian Multicultural
Community Services:
Tel: 03 9689 9170
Email: info@amcservices.org.au
Website: www.amcservices.org.au
•
Details about CDC and guidelines are available from the Department of
Health and Ageing website:
http://www.health.gov.au/internet/main/publishing.nsf/Content/ageing-cdcops-manual.htm