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Adam Hutchison's Blog - just a little space in the world were i air my thoughts on anything and everything i am either involved in or enjoy. Many of you may wish to skip by and ignore my meandering thoughts but others may find them informative...


The Care Sector – Where it’s at in the UK…

Adam Hutchison

The UK care sector is staring at a massive tsunami coming its way. A combination of factors such as budget cuts in local authorities, the new living wage and direct payments have made the traditional care business models unsustainable. Most large care providers expect as many as 50% of their existing contracts to become ‘unprofitable’ in the next 18 months. Just to set some perspective, collectively these contracts are worth more than £5 Billion per year and employ more than 500,000 care workers. Imagine the consequences of half of these contracts becoming unprofitable in 18 months!

While the funders especially local authorities have had a role in this, care providers also have to share some of the blame for the situation they find themselves in. Care organisations haven’t really moved with the times. Improvement opportunities are everywhere – be it back office admin tasks, front office productivity, invoicing process, working capital management or offering new and innovative services. It is no surprise that margins in this industry are as low as 2-6%.

Apart from rota planning and invoicing most other organizational functions in the care sector are literally run on paper. Most newcomers in this industry are surprised to see tons and tons of paper lying everywhere. Buried in the paper are staff timesheets, care records, staff reviews, complains, audit reports etc. Paper not only adds a massive overhead, it also reduces organisation’s capability to react to the changes in the market environment. It takes heroic micromanagement to ensure these records are kept up to date, processes are being followed and all stakeholders engaged. However, leaders in most care organisations will accept that their service records are woefully inadequate; often risking the lives of individuals being looked after. Centralised, accessible and analysable service information is absolutely essential to start modernising this sector and it also is the key to unlocking the new opportunities that will emerge in near future.

New world – new opportunities:

No one can predict the future. However here are some fundamental trends that are shaping the care market. Providers serious about their future should take note.

Privately funded care:
As local authorities raise the bar for social care funding, more and more individuals will be funding their care themselves. To be successful in the private pay market care organisations have to become more ‘consumer’ centric. Next of kin are as much customers here as the service user. Apart from delivering great service, keeping customers engaged – sending notifications and updates after every visit – is going to be very important. Organisations looking to grow their private pay business need to think hard about the investments in systems and processes needed to deliver high quality services without significantly increasing their cost overheads.

Complex care
While the overall number of individuals receiving social care is decreasing, more money is being spent on the most vulnerable. The economics of keeping people of out of hospitals or discharging them earlier is well known. This is an opportunity especially for organisations willing to ‘upgrade’ from low value social care to higher value health care services.

Looking after individuals with complex needs brings its own set of challenges. There is a much greater level of scrutiny and care records tend to be exhaustive and critical to the service. It is also important to keep all stakeholders completely connected with real-time access of ‘what is going on’ with a package. A complex care environment needs organizational flexibility to adapt to the needs of the service. Information systems need to be flexible and should be able to handle the forms, business rules and role based access required to deliver a tailored service which is at the heart of complex care.

Low touch care
As people live longer, a number of them will be healthy enough to look after themselves with some reactive care when needed. This can be in the form of a phone or video link to provide companionship combined with the option to get in personal care whenever requested (within agreed parameters). This type of service can also be enhanced by installing a bunch of assistive devices spread all over the service user’s home. These devices would constantly collect data about the health and wellbeing of the individual without being intrusive. Information captured will be relayed back to a “hub” where the staff will be alerted if something is not right. This is a dramatic shift from the current model and if deployed correctly has the potential to unlock significant value by channeling resources towards the once with greatest need.

This is by no means an exhaustive list of future opportunities. However, no matter what new opportunities emerge one thing is clear – care providers have to become a lot more lean and efficient, create real-time connections with service in the community and evidence the outcomes and quality of services to the payers. They have to start looking beyond sending the right person at the right place and capturing time, to actually knowing what happened during service time. Organisations who can capture, share and market the latter will be the once well places to ride the massive wave coming their way!