Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
KPMG
Key Themes Identified in Rural and
Remote Aged Care Consultations
Department of Health
December 2015
ADVISORY
i
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Contents
Executive summary
3
1.
Introduction
6
1.1
Objective of Study
6
1.2
Approach
6
2.
Residential Care and Home Care Providers
7
2.1
Introduction
7
2.2
Key Themes
7
3.
Multi-Purpose Service Aged Care Providers
12
3.1
Introduction
12
3.2
Key Themes
12
4.
National Aboriginal and Torres Strait Islander Flexible
Aged Care Programme Providers
16
4.1
Introduction
16
4.2
Key Themes
16
Appendix A – Consultation Guide
19
ii
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Executive summary
Introduction and Approach
KPMG conducted a number of one-on-one consultations with rural and remote aged care
providers, in order to gather direct feedback and identify the key factors that influence the
financial performance of rural and remote aged care providers. This information will inform
the Aged Care Financing Authority (ACFA) and Department of Health’s (Health) study on
issues that affect the financial and operational performance of rural and remote aged care
providers throughout Australia.
KPMG held consultations with 30 aged care providers across Australia, including
residential and home care packages providers, multi-purpose service (MPS) providers and
National Aboriginal and Torres Strait Islander Flexible Aged Care Programme
(NATSIFACP) providers.
In these consultations, providers were asked questions regarding: service provider
management; occupancy; clientele demographics; workforce; and financial performance.
Providers were also invited to discuss any other key issues that were impacting on their
financial performance.
Key Themes Identified for Residential and Home Care Aged Care
Providers
KPMG consulted with ten providers across New South Wales, Queensland, South
Australia, Victoria and Western Australia. Providers were contacted in the Northern
Territory and Tasmania, but declined to participate as they had submitted a detailed
submission to Health or attended a communication forum.
Key themes identified through these consultations were:

The change in community need has impacted on providers in terms of residents
entering residential care with much higher care needs as a result of staying in their
homes longer;

Issues are experienced with attracting qualified and experienced staff in remote areas.
As such, providers often invest significantly in training to ensure their workforce have
the right skills;

Retention of staff varies across providers. For staff that had a low turnover, they expect
issues in the future due to the ageing of their current workforce (i.e. 65 years and older);

It is costly to access training off-site due to travel and accommodation costs and can
sometimes be difficult to get staff engagement. Some providers worked with other
providers in their region to bring trainers in to deliver a course to reduce costs;

Boards are often averse to borrow for capital developments or improvements, leading to
providers relying on capital grants or cash reserves for these activities;

Having a good relationship with the community was highlighted as key for many
providers, in terms of referrals, volunteering, and quality of Board membership;

Establishing relationships with other organisations both in the region and in the
community (such as Regional Development Australia, TAFEs etc.) can benefit the
provider from a grant funding, staff retention and reputational perspective;
3
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015

There are a number of additional costs of operating in a remote area, such as: freight
costs; labour transport costs; general higher cost of operating in a smaller region; and
costs of bringing specialists to service their residents;

The low value and poor real estate market in rural and remote areas affects the ability
to levy a RAD/DAP that was reflective of their accommodation costs ; and

A variety of approaches are taken by providers in regards to the RAD, with some willing
to negotiate the price with residents, and others who will not alter their advertised price
depending on individual circumstances.
Key Themes Identified for MPS Aged Care Providers
KPMG consulted with seven government providers across New South Wales, Queensland,
Tasmania, Victoria and Western Australia, and one peak body in Victoria. The State
governments were contacted in the Northern Territory and South Australia, but they did not
respond to requests for a consultation.
Key themes identified through these consultations were:

Broader Hospital and Health Service (HHS) management sometimes limits the ability of
individual MPS’s to control their budget, which can lead to a limited incentive for the
MPS to improve their performance as any savings are not retained by the MPS;

Access to specialist services can be challenging;

There is difficulty in attracting experienced staff, due to the nature of rural locations and
the associated lifestyle challenges, including the small rental market, which makes
sourcing accommodation for relocation significantly challenging;

The blended service offered by the MPS sites can help retain staff due to the variety of
work on offer. It also allows more registered nurses to be used in the aged care facility,
as they can be used across the different types of services offered by the broader MPS.

MPS’s in rural and remote locations have a higher staff cost per resident. This is due to
the need to have a certain number of qualified staff and a director of nursing employed,
but having a smaller number of residents than in a metropolitan provider;

Training for staff can be difficult due to both cost and resource constraints. E-learning
was embraced by a number of providers to address this limitation;

Fluctuating occupancy levels in some providers can have a large impact on financial
performance, as staffing levels need to be maintained even if the current occupancy
level is low;

Key cost drivers identified for rural and remote MPS providers were: the cost of travel
and accommodation for specialised health services (and equally, the lack of availability
of these services locally); higher staffing costs and the need to provide rural incentives;
the higher cost of transport of goods and services; and the lack of availability of multiple
local suppliers; and

In the more remote areas, it was identified by a number of MPS providers that there
was a ‘market failure’ with no non-Government aged care providers in the region,
leaving the State Government MPS as the only option for aged care. This led them to
feel that they had no choice but to operate.
4
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Themes Identified for NATSIFACP Aged Care Providers
KPMG consulted with 12 NATSIFACP providers across New South Wales, the Northern
Territory, Queensland, South Australia, Tasmania, Victoria and Western Australia.
Key themes identified through these consultations were:

Multiple benefits were identified where NATSIFACP provider belonged to a larger
organisation, including: centralisation of key staff management functions at a broader
organisation level; ability to access training; broader organisation budgeting, quality and
risk processes were able to be used by individual providers; and in some providers,
staff were able to shift between remote locations easily (“roving staff”);

Higher staff numbers are often needed to accommodate Indigenous cultural
sensitivities, where staff may need to be absent for long periods of time;

Providers experience difficulty in attracting staff, which in some cases led to providers
having beds empty due to workforce capacity. Some providers offered additional
incentives, such as additional leave, whereas others operated a ‘fly-in, fly-out’ staff
model to keep staff motivated;

A large number of providers noted that job applicants often lack the required skills for
the job, but due to difficulty in attracting qualified staff, providers would hire staff and upskill / train them while they were employed;

Staff absenteeism was noted as an issue, leading to large wage expenses due to
penalty rates being paid to staff to work additional shifts to cover periods of
absenteeism;

Providers noted additional costs of operating in a remote area, such as: travel costs to
take clients to specialists; travel costs for training of staff; freight costs; and the
additional travel costs for tradespeople from larger regional centres to conduct repairs.

Providers also noted additional specific costs due to the Indigenous culture of the
provider and its residents, such as additional cultural competency training for staff;

Providers valued the model of flexible care packages as they enabled flexibility for
customer focused service provision; and

Providers felt that an Annual Forum would be beneficial so that they can learn from
other NATSIFACP providers.
5
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
1. Introduction
1.1 Objective of Study
In the Aged Care Financial Authority’s (ACFA) report to Government entitled Factors
Influencing the Financial Performance of Residential Aged Care Providers it was
recommended that a more detailed study be undertaken of issues affecting the financial
performance of rural and remote aged care providers. As a response to this, ACFA and the
Department of Health (Health) organised a number of consultations with rural and remote
aged care providers, through communication forums and one-on-one consultations. KPMG
were engaged to assist Health in facilitating these consultations. These consultations were
undertaken with the following types of providers:

Residential care providers;

Providers offering Home Care Packages of tailored services to assist individuals who
wish to remain in their own home as long as possible;

Multi-Purpose Services (MPS) which provide integrated health and aged care services;
and

National Aboriginal and Torres Strait Islander Flexible Aged Care Programme
(NATSIFACP) providers.
In undertaking these consultations with rural and remote aged care providers across
Australia, Health and ACFA intended to gather direct feedback on key factors that influence
the financial performance of rural and remote aged care providers.
This report summarises the key issues and common themes identified throughout the oneon-one consultations attended and facilitated by KPMG with 30 aged care providers across
Australia.
1.2 Approach
KPMG developed a number of key questions to ask each aged care provider in the one-onone consultations. These questions broadly focused on five key areas, namely:

Service provider management;

Occupancy;

Clientele Demographics;

Workforce; and

Financial Performance.
Aged care providers were also invited to discuss any other key issues from their
perspective that impacted on their financial performance. The consultation guide is included
at Appendix A.
A list of aged care providers was provided to KPMG by Health. In our consultations, we met
with a variety of key personnel, ranging from Chief Executive Officers, to the Director of
Nursing, to finance managers. A number of aged care providers did not respond to
consultation requests, or declined to participate.
6
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
2. Residential Care and Home Care Providers
2.1 Introduction
Residential aged care providers deliver a range of care options and accommodation for
older people who are unable to continue living independently in their own homes. The type
of care provided ranges from personal care, to assistance with activities of daily living,
through to nursing care on a 24-hour basis. Residential aged care services are delivered by
a range of providers including not-for-profit, private and public sector organisations.
Funding for residential aged care is provided by the Australian Government under the Aged
Care Act 1997. The resident also contributes to residential care depending on their means.
The Home Care Packages Programme aims to provide a tailored, coordinated package of
services that meet an individual’s specific care needs, thus assisting care recipients to stay
living in their own home and providing them with choice and flexibility in the way the care
and support is delivered. A Home Care Package is coordinated by an approved home care
provider with funding provided by the Australian Government under the Aged Care Act
1997. This provider can be a stand-alone provider, but can also be a residential care
provider. Commonwealth subsidies under the package are paid to the provider at a fixed
amount by care level. The services that can be provided in a Home Care Package include,
but are not limited to:

Support services – such as help with washing and ironing, house cleaning, gardening,
basic home maintenance, home modifications related to care needs, and transport to
help with shopping, doctor visits or attend social activities;

Personal care – such as help with showering or bathing, dressing and mobility;

Nursing, allied health and other clinical services;

Hearing services and vision services; and

Care coordination and case management.
2.2 Key Themes
Consultations were held with the following aged care providers:
State
Aged Care Provider
NSW
Berrigan & District Aged Care Association, Berrigan
Residential
QLD
Lower Burdekin Home for the Aged - Home Hill Hostel, Burdekin
Residential
Sarina Aged Residential Home, Sarina
Residential
Proserpine Nursing Home, Proserpine
Residential
Keith & District Hospital Inc, Tatiara
Residential
Riverview Lutheran Rest Home, Loxton
Residential
Mt View Homes, Booleroo
Residential
Edgarley Home Incorporated, Casterton
Residential
Dimboola District Hospital Nursing Home Unit, Nihill Region
Residential
SA
VIC
Type of Care
7
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
State
Aged Care Provider
Type of Care
Home Care
WA
Esperance Aged Care Facility, Esperance
Residential
* Note: ten providers contacted did not respond to requests for a consultation; and three providers declined
to have a one-on-one consultation as they had submitted a detailed submission to Health and / or attended
a communication forum.
The key themes identified from consultations with residential and home care providers are
included in the table below:
Key Theme
Summary
Change in
community need
has impacted on
providers
Multiple providers noted that there has been a noticeable change
in community need due to the increase in home care packages.
This has led clients to stay in their homes longer, but results in
very high care needs when they eventually enter residential care.
This has impacted on turnover of residents (in terms of shorter
length of stay in care due to a higher number of deaths).
It was also noted that the facilities that were originally built for low
care have to be altered to accommodate the greater number of
clients requiring high care needs. If they are unable to do this due
to lack of capital, beds remain vacant. In order to offset the loss in
revenue, some providers offer beds for respite in between
permanent residents to ensure beds are not empty. It was noted
that providers need to be able to diversify to better use their
facilities.
On the other hand, facilities that cater mostly for high care
residents are almost at full occupancy.
Quality of Staff
While it was noted by providers that there is often no issue with
attracting staff, it can be difficult to attract quality staff (in terms of
qualifications, experience, attitude and competence). Providers
tended to hire inexperienced staff due to need, but then had to
invest in significant training for all staff, from the cooks to the
personal care workers and enrolled nurse positions to ensure they
are satisfactorily skilled.
Additionally, in more remote regions, providers often experience
limited access to Registered Nurses. A number of providers noted
that they are reluctant to use agency nurses and staff as there is a
perception that the care is not personalised due to lack of rapport
with the residents. It is also very costly for the provider to employ
agency staff.
Retention of Staff
Some areas had issues retaining staff, whereas others did not.
For providers that had a low turnover of staff, they noted that as
part of their recruitment process, they targeted (where possible)
staff that wanted to stay in the town. It was noted by providers with
a higher turnover of staff that declining economic conditions of
other industries within the region, for example mining, had a large
8
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
impact on their staff turnover as families were forced to leave to
find work in other areas.
Some providers noted that staff turnover being low is a concern as
they have a rapidly ageing workforce servicing a high needs client
base. One provider identified that from 2017/18, the ageing
workforce (65 years old plus) issue is likely to become critical for
service delivery.
One provider used a “bonded” system to retain staff, and noted
that it worked very well. This involved the provider paying for
workers to undertake an enrolled nurse course and, in exchange,
that person had to work at the provider for an additional two years.
Costly to access
training off-site
and difficult to get
staff buy-in
Providers noted that training for staff is seen as important by
management, but they sometimes have difficulty in attracting staff
to undertake the training. Some providers encouraged training as
an incentive mechanism, and one provider specifically looked at
training undertaken during the year as a performance measure in
staff annual performance reviews. It was also noted that training
can be quite time-consuming to undertake, and due to lower
staffing numbers, staff do not have sufficient time to undertake the
training.
Some providers worked with other aged care providers within their
region to increase the number of participants in the training and to
share costs.
Providers noted that accessing specialist training can be
expensive due to travel and accommodation costs for staff to
attend. For example, one provider gave the example of a $250
metropolitan based course actually costing the provider
approximately $850 due to paying travel and accommodation for
the staff member attending. As such, this particular provider will
only send limited staff on training and then use a train the trainer
approach.
Boards averse to
borrow for capital
developments/
improvements
A number of providers noted the risk averse nature of their boards,
meaning that they were reluctant to borrow money in order to
conduct capital projects or improvements. As such, they rely on
grants or cash reserves to undertake these refurbishments.
For example, one provider noted that they currently had a large
shortage of beds, and believed that this will only increase into the
future as demand for aged care will increase. However, the
organisation was lacking in capital funding to be able to meet the
forecast demand, and were reluctant to borrow funds.
Community
involvement
Having a good relationship with the community was highlighted as
key for many providers. This was in terms of: word-of-mouth
referrals; valuable volunteering effort supporting the provider; and
for community based providers, having key members of the
community on the Board.
9
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
Business
relationships are
key to accessing
additional benefits
Establishing relationships with other organisations both in the
region and in the community (such as Regional Development
Australia, TAFEs etc.) can benefit the provider from a grant
funding, staff retention and reputational perspective.
For example, one residential care provider is in regular contact
with Regional Development Australia and has received small
amounts of grant funding to provide training to staff. Furthermore
this provider presents at the local TAFE and offers both casual
work for hospitality students, an internship for an administrative
role and supports students in studying to work in aged care.
Higher costs as a
result of operating
in a remote area
All providers noted that freight and labour transport costs were
additional costs of operating in a remote or rural area. They also
noted the general higher cost of goods and services of operating in
a smaller region.
It was also identified that for a specialist to visit the provider, they
often have to pay additional travel and accommodation costs. This
places restrictions on the services that providers can access due
to cost pressures.
Benefit of having
a business
minded leader
It was noted that having a business minded leader was beneficial
in order to operate a profitable organisation. For example, one
provider noted that having financial and business skills and
experience in operating businesses had enabled them to turn a
loss-making organisation into a profitable aged care provider. As
part of this, the ability to make decisions that are good for the
business financially but are unpopular in the mind of the
community is a key skill to possess.
Specific issues
with Government
run providers
For providers operated by the State government, it was noted that
they were impacted by a large wage bill as a result of the current
Enterprise Bargaining Agreement (EBA). For one provider, their
EBA stated that personal care assistants (PCA’s) are not to be
employed on a permanent basis, leading to retention issues. The
State also noted that the provider should preference the
employment of an enrolled nurse or registered nurse to perform
tasks. Without more effective utilisation of PCA’s to perform lower
level tasks, this requirement added significant cost to the
provider’s wage bill.
Low value and
poor real estate
market in rural
and remote areas
Often the local real estate market has a very low average house
value in remote areas. For example, one provider estimated that
the average house values in their region were between $80,000
and $150,000. This compromised their ability to levy a RAD/DAP
that was reflective of their accommodation costs.
Additionally, the housing market in rural areas does not have a
quick turnaround, which means that the reliance on selling the
property in six months is not realistic.
Different
It was noted that there were a number of different approaches
10
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
approaches to
RADs
taken to the RAD across various providers. Some providers would
advertise a price, and would not negotiate i.e. there was no
bargaining or altering of the advertised price based on individual
circumstances. Other providers took the approach that if the
person cannot pay the full amount, they negotiate with them to
make it work in order to provide them with the care required. Some
providers identified that it would lose the goodwill of the community
if they declined entry for residents that could not afford the
published price.
11
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
3. Multi-Purpose Service Aged Care Providers
3.1 Introduction
The Multi-Purpose Service (MPS) programme is a joint initiative of the Commonwealth
Government and State and Territory Governments to provide integrated health and aged
care services for small rural and remote communities. It allows services to exist in regions
that could not viably support stand-alone hospitals or aged care homes, and are usually
(although not always) administered by the state or territory health department.
MPS’s are funded on the number of places allocated by care type (high care, low care, or
community care/home care) regardless of occupancy, with the amount of funding set by
Ministerial Determination each year. By funding under this model, MPS providers are not
required to undertake ACFI assessments or submit monthly claim forms for payment.
MPS’s are also not required to participate in ACAR in order to receive places nor are they
required to submit financial statements (GPFR). MPS’s are legislated under references to
flexible care in the Aged Care Act 1997, the Aged Care (Transitional Provisions) Act 1997
and the Aged Care Principles 2014.
Consultations were held by KPMG with the following aged care providers/peak bodies:
State
Aged Care Provider/Peak Body
Type of
Consultation
NSW
NSW Ministry of Health
Site Visit
QLD
South West Hospital and Health Service
Darling Downs Hospital and Health Service
Central Queensland Hospital and Health Service
Site Visit
Teleconference
Teleconference
TAS
Tasmanian Health Service
Site Visit
VIC
Department of Health & Human Services, Victoria
Victorian Healthcare Association
Site Visit
Teleconference
WA
WA Country Health Service
Site Visit
* Note that the Northern Territory and South Australia Governments did not respond to requests to hold a
one-on-one consultation.
3.2 Key Themes
The key themes identified from consultations with MPS providers are included in the table
below:
Key Theme
Summary
Broader Hospital
and Health
Service (HHS)
management
limits ability of
individual MPS to
control budget
Some facilities reported difficulty in fully understanding the
financial position of their organisation and of the core factors that
affect this. This was primarily due to the high level HHS control of
the budget, which must incorporate and manage the funding
allocation for every health service within the district. Accordingly,
the ability of the MPS’s to influence financial decisions and access
additional funding is limited, and current allocations are based on
12
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
historical budgeting and demand needs.
Additionally, MPS’s experienced limited ability to derive individual
performance drivers, and as such, there was a limited incentive to
improve performance as any savings are not retained by the MPS.
MPS providers also noted that due to the nature of MPS
government funding, they are unable to change the mix of funding
places (from low to high care) easily during the year. As such, the
MPS provider may be providing high care to a client that is only
funded for low care, and as such, are under-funded.
Access to
specialist services
can be
challenging
Catering only to the local community, the regional (and to some
extent remote) nature and resultant size of the MPS sites can
make the provision of specialist services challenging. For example,
transporting the elderly to specialist appointments can be
particularly challenging for some MPS providers as, due to the
range of services the MPS provides other than aged care. The
HHS does not have any non-urgent transport processes.
Ability to work
with private
providers in some
locations
Some MPS’s will provide additional home support on top of and in
conjunction with private providers on a partnership basis. At times,
the not-for-profit or private provider may also broker the MPS to
deliver services on its behalf for some communities.
Attracting staff is
a challenge due
to nature of
remote locations
Staffing is considered to be an issue within some MPS’s, which
have difficulty attracting experienced staff. It was identified that this
was due to the nature of rural locations and the associated lifestyle
challenges, including the small rental market which makes
sourcing accommodation for relocation significantly challenging.
Blended nature of
MPS assists in
retention of staff
The blended service offered by the MPS sites can help retain staff
due to the variety of work on offer. It allows more registered nurses
to be used in the aged care facility, as they can then be used
across the different types of services offered by the broader HHS.
The unit cost of
staff per residents
are higher due to
smaller numbers
of residents
One provider estimated that it is approximately 30% more
expensive to deliver services for a smaller health provider than for
a larger provider. They noted that this was primarily due to staffing
costs. For example, an MPS requires a registered nurse to be
rostered on despite the number of residents, whereas for a larger
organisation, that cost of that nurse can be spread across a
greater number of residents. They also need to have a director of
nursing position despite the small size of the provider, therefore
incurring the same cost as a larger organisation. This leads to a
higher staff cost per resident.
Training
challenges due to
resource
constraints
Often individual MPS sites are able to leverage the broader
training offered by the HHS, which reduces costs.
However, a lot of MPS’s noted that training opportunities are
limited due to resource constraints. For example, one provider
noted that their current workforce was insufficient to support
emergency leave and back-fill recreational leave, and as such,
13
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
staff are unable to take leave for voluntary education and training
purposes due to current workforce capacity.
Some MPS’s had embraced e-learning, and had a subscription to
the Aged Care Channel to allow staff to undertake training in their
own time.
Fluctuating
occupancy has a
large impact on
cost
It was noted that fluctuations in occupancy can have a large
impact on financial performance. The providers are unable to
reduce staffing levels, as if regular work is not available, the staff
will leave the area. They also need to maintain the infrastructure
despite fluctuating occupancy levels.
Key cost drivers
for rural and
remote MPS’s
Key cost drivers identified by MPS providers across Australia
included:
the cost of travel and accommodation for specialised health
services (and equally, the lack of availability of these services
locally);
higher staffing costs and the need to provide rural incentives;
the higher cost of transport of goods and services; and
the lack of availability of multiple local suppliers. It was noted that
there is a degree of tension between ‘buying locally’ and obtaining
goods for the lowest price possible.
Issues with
MPS’s being only
aged care
provider in region
In the more rural and remote areas, it was identified by a number
of MPS providers that there was a ‘market failure’ with no nonGovernment aged care providers in the region, leaving the State
Government MPS as the only option for aged care. As such, the
MPS providers felt that they had no choice but to operate to
ensure aged care is delivered in that region, even if there is low
demand or the service is unprofitable.
Additionally, some publicly funded MPSs noted that their care
needs are rising and this is viewed, in some part, to be reflective of
their inability to decline providing care for patients with more acute
needs (i.e. dementia and behaviour care needs). Whereas, it was
perceived that private providers had a certain level of discretion
with the individuals with whom they provide care.
Inability to access
funds forces
residents to
choose
Government MPS
It was noted that even if there are private providers located in a
region, many of the clients that come to the MPS are unable to
access funds in order to go to a private provider.
Home care
challenges
The provision of home care support in rural and remote areas was
seen to be challenging due to distance, low client numbers, and a
limited ability to modify homes to be suitable for in-home aged care
management.
It was noted that the majority of HACC was transitioned to the notfor-profit sector recently, but is still provided by the MPS in regions
14
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
where there are no other providers available.
15
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
4. National Aboriginal and Torres Strait Islander
Flexible Aged Care Programme Providers
4.1 Introduction
The National Aboriginal and Torres Strait Islander Flexible Aged Care Programme
providers (NATSIFACP) provide a mix of flexible residential and community aged care
services to older Indigenous people close to their home and community. Flexible care
caters to the needs of older people, in either a residential or home care setting, who may
require a different approach than that provided through mainstream residential and home
care options.
Consultations were facilitated by KPMG with the following NATSIFACP aged care
providers:
State
Aged Care Provider
Type of
Consultation
NSW
Canowindra Aboriginal Community Care, Tweed Heads
Site Visit
NT
Mulakunya Flexible Aged Care Service, Nguiu
Kalano Flexible Aged Care Service, Katherine
Teleconference
Teleconference
QLD
Injilinji Aged Care Service, Mt Isa
Sandy Boyd Hostel, Palm Island
Teleconference
Teleconference
SA
Seaview Village Aged Care Service, Thevenard
Tullawon Aged Care, Yalata
Teleconference
Teleconference
TAS
Cape Barren Aged Care, Cape Barren Island
Teleconference
VIC
Iris Lovett Gardiner Centre (ACES), East Brunswick
Rumbalara Multi-Aged Care Complex, Shepparton North
Site Visit
Teleconference
WA
Guwardi Ngadu, Fitzroy Crossing
Kungkarrangkalpa Aged Care Service, Wanarn
Teleconference
Teleconference
* Note that one provider contacted did not want to take part in a consultation and an
additional provider did not respond to requests for consultation.
4.2 Key Themes
The key themes identified from consultations with NATSIFACP providers are included in
the table below:
Key Theme
Summary
There are
benefits in
belonging to a
wider
organisation
When a NATSIFACP provider belonged to a larger organisation,
such as a council, large not-for-profit or community organisation,
there were a number of efficiencies identified and benefits
experienced.
 Key staff management functions could be conducted at a higher
level within the organisation, with operational management
16
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
functions conducted on the ground at the provider. This meant
that costs were allocated at the organisation level rather than
the individual providers.

 Training courses could be delivered at an organisation wide
level, reducing cost.

 Quality and risk processes of the wider organisation would
apply to the provider and was not something that had to be
developed individually.

 For providers in very remote areas, staff were able to shift from
one provider to another within the same organisation, which
was called either ‘roving staff’ or ‘fly-in, fly-out staff’. This
staffing model mean the providers could offer employees the
ability to only stay in each remote area for 6-8 weeks, ensuring
staff did not get ‘cabin fever’.

 Budgeting processes and financial systems of the broader
organisation could be leveraged.
High staff
numbers are
needed to
accommodate
Indigenous
cultural
obligations
In all NATSIFACP providers consulted, a large proportion of the
staff are Indigenous. Some providers employed a larger number of
staff than required due to the cultural sensitivities of Indigenous
staff. For example, at times staff need significant time off from
work to meet cultural obligations, and therefore, the provider
needed to have enough staff on the payroll to operate at these
times.
Some job
applicants lack
skills and need to
be trained
Some providers noted that it can be difficult to find staff with the
appropriate skills and qualifications. A large number of providers
noted that they would hire staff without the relevant skills or
qualifications and up-skill/train during the course of employment.
Experience
issues with staff
absenteeism
Some providers noted a high level of absenteeism of their staff.
This often resulted in a large increase in wage expense as penalty
rates are paid to staff to work double shifts to cover periods of
absenteeism.
Difficult to attract
staff
A number of providers also noted that they do not have enough
staff (either through lack of people available to fill the positions, or
due to lack of funding to employ) to service all available beds.
In order to attract quality staff and reduce turnover some providers
offered incentives, such as additional leave. These incentives
come at an additional cost borne by the provider.
Clients come from
the local
communities
For most NATSIFACP residential providers, their clients were from
the town where the provider was based or from surrounding
communities. These residents did not move from the NATSIFACP
provider as they wanted to be close to their families and
communities.
17
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Key Theme
Summary
Additionally, where resident’s needs increased, families and
community members heavily consult with the providers to try and
keep the individuals in the facility.
There are a
number of
additional costs of
operating in a
remote area
Consistently, NATSIFACP providers noted that they had to pay
additional costs due to being located in a remote location.
For example, providers had to cover travel costs to take residents
to specialists in bigger centres (including both staff time and
physical travel costs, such as petrol).
Travel costs can also be very large when sending staff to training
courses. For example, one provider in a very remote location
noted that they had to allow three days travel time for a one day
course.
Freight was consistently put forward as an extra cost of operating
in a remote location. This was both in terms of providers bringing
supplies in themselves and also buying from local suppliers.
Another additional cost is the requirement, at times, to have a
tradesperson to conduct repairs and maintenance on assets.
These contractors come from bigger regional centres and the
provider pays a per kilometre rate for their travel. Where possible
providers in close proximity or members of the community liaise to
share the costs of this travel, but this is not always possible.
There are
additional costs
specific to
NATSIFACP
providers
Cultural competency and sensitivity training is required for staff at
aged care providers in order to minimise any impacts of cultural
differences.
Flexible care
packages work
well for
NATSICAP
providers
Some providers noted that they valued the model of flexible care
packages as they provide the flexibility for customer focused
service provision and provided clients with a real sense of
independence.
Need for an
Annual Forum
A number of NATSIFACP providers noted that holding an Annual
Forum would be very beneficial. This would involve providers
being given an opportunity to meet and share knowledge for
operating efficiently in order to improve their own services.
One residential NATSIFACP provider (operating in the Northern
Territory) had residents from a large range of Indigenous
communities (some a ten hour drive from the provider) and
operated a ‘return to country’ program. This program facilitates
residents to visit their community for a short period of time. In
some of these instances, staff had to accompany the resident on
their journey. The geographical disparity of the communities
increases the costs for the provider.
18
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Appendix A – Consultation Guide
Questions for remote and site visit consultations
1. Service Provider Management
1.1 What is the ownership structure of the provider? (i.e. not for profit, for profit,
government)
1.2 What is the composition of the Board? Are Board members suitably qualified?
1.3 What is the strategic focus of the provider? Is this noted in a formal strategy
document?
1.4 Is annual budgeting undertaken?
1.5 Is there a clear focus and regular review of:
1.5.1 budgeted revenue over key sources;
1.5.2 variance analysis throughout the year (i.e. budget vs actual spend or
income receipt);
1.5.3 expense management and review;
1.5.4 cash management and liquidity (what is the provider’s current liquidity
ratio?); and
1.5.5 capital and asset management?
2. Occupancy
2.1 What is the composition of care place types (i.e. high, low or community care /
homecare)?
2.2 Do you receive a flexible care subsidy? If yes, what is the composition of your
flexible care places (high, low and homecare)?
2.3 What is the average occupancy rate?
2.4 What is the turn-over of clients moving to a competitor / similar service provider?
(i.e. those who leave to a different facility)
2.5 What can be done to improve occupancy? Is there a business plan in place to
improve pricing structure / occupancy rates etc?
2.6 How many places are used for alternative care types (i.e. high care place used
for a low care service and vice versa)? Is this the case for the flexible care
places also?
2.6.1 If this is the case, on average what percentage (throughout the year)
would a place be used for an alternative care type?
2.7 If home care visits are undertaken, on average, how many would be undertaken
in a given week / month / year?
3. Clientele demographics
3.1 What is the proportion of clients from the local community vs further afield?
3.2 Where do clients come from? (existing client in other services you deliver, GP
referral, Hospital referral, retirement village, etc.)
3.3 Are you experiencing any cultural issues with staff and residents? (i.e. staff
working with the opposite gender patient, linguistic challenges, etc)
3.4 Where are clients’ specialist services accessed? (locally or travel required) – if
travel is required, are staff required to travel with the client?
4. Workforce
4.1 How many staff do you currently employ?
4.2 What is the current retention rates within the service provider?
19
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.
Department of Health
Key Themes Identified in Rural and Remote Aged
Care Consultations
December 2015
Questions for remote and site visit consultations
4.3
4.4
4.5
4.6
Are there current vacancies?
Is there an issue with attracting new staff? What are the key reasons for this?
What is the composition of staff – full-time, part-time or casual employee?
Are staff sufficiently trained? Is training and re-fresher training available (incl.
eLearning)? What is the take-up of this training (i.e. training available vs.
actually having the capacity to undertake the training)?
4.7 What is the standard composition of a rostered team? Is this considered
sufficient given the client’s needs on a daily basis?
4.8 Are any of your services outsourced to an external provider? If yes, what
services and how many providers?
4.8.1 If yes, do you outsource due to capacity or capability restrictions?
What is the efficiency gain on retaining services in-house?
5. Financial information
5.1 What are the core factors that affect the financial position of the organisation?
5.2 Does the service provider receive any other additional funding? (i.e. state based
funding, grant funding etc)
5.2.1 What proportion of income does this represent for the service provider?
5.3 Are you able to separate the financial performance of the business units of the
organisation? (e.g. Aged care, hospital, other services etc.)
5.4 What are the locational drivers impacting financial performance? (i.e. travel
costs, demand / population constraints, cost of outsourcing or specialised
service provision, training, transportation of goods, technology impacts etc)
5.5 Over the last three years how has your EBITDA and Net Profit before tax been
trending?
5.6 Is there a quantified EBITDA pre resident per annum? If so, how is that
trending?
5.7 How frequently is the facility refurbished? (i.e. every 5 or 10 years etc)
6. Other
6.1 Do you have any further comments you would like to add?
20
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Liability limited by a scheme approved under Professional Standards Legislation.