Aged care is changing
With expertise and innovative technology, FicusBridge wants to help the sector transform the business side of aged care.
Over the past few years, government funding for residential aged care has increased, especially in response to the royal commission. But as highlighted in industry and government reports, providers continue to face significant financial pressures.
The gap between government funding and care costs, particularly regarding staffing, compliance and specialised care needs, remains a persistent challenge.
It means providers now need to focus on alternative revenue streams to support sustainability, says James Price – partner at aged care advisory and technology firm FicusBridge.
“The changes in legislation and an incoming Aged Care Act due mid-2025, only add to the complexity of a revised funding tool following the recommendations of the royal commission,” Price tells Australian Ageing Agenda
The challenges are many – including revenue management, care minute compliance, board reporting, and growth – but ones the three partners at FicusBridge are keen to tackle through technology and operational know-how, says Dr Tanvi Dalal, who founded the company as an aged care funding and care minute management advisory firm in late 2023.
In December 2024, the company merged with Insights42 – a governance and reporting business Price co-founded with Bret Duckers in the second half of 2024 – to form a new look FicusBridge to support aged care providers through the reforms.
“We’re uniquely positioned to help providers navigate these challenges. By combining deep industry expertise with innovative technology solutions, we’re making professional, experienced resources accessible to aged care businesses of all sizes,” Dalal tells AAA.
Funding operations and care delivery is Dalal’s
“We will formally launch our insights tool at the ITAC Conference in March 2025.”
James Price
area of expertise gained from her time working at aged care providers Signature Care and Estia Health and consultancy Mirus Australia. She leads clinical-business integration at FicusBridge to ensure solutions effectively align clinical excellence with operational efficiency.
Price – who heads operational transformation initiatives – draws on his experience creating PwC’s national aged care practice and co-founding Mirus Australia. His focus is on process optimisation and business operating models.
The team is keen to tackle the sector’s challenges, says FicusBridge founder Dr Tanvi Dalal
“We are all about helping people with the business side of aged care,” he says.
The third partner – Duckers –combines his financial expertise and operational knowledge from previous roles as an investment banker and chief executive officer and chief financial officer of Encore Care.
There are plenty of statistics showing providers lose money, but also many examples of those who are financially sustainable and growing, says Duckers – who leads the team’s financial and capital management strategies.
“We believe that if most providers have access to high quality resources, fit-for-purpose tools and an efficient operating model, they have a strong chance of being successful,” Duckers tells AAA
These are the elements FicusBridge is offering.
“Our analysis of data covering the whole sector shows that, unsurprisingly, smaller groups and standalone facilities have higher unit costs for admin and operations.
“Whilst all providers will benefit from our technology and a consistent operating model, this cohort will benefit most from our co-sourcing and advisory services,” he says.
That said, the national practice has a vision to innovate a more sustainable future for the whole sector through comprehensive and codesigned solutions that address both the business and care aspects of aged care delivery.
One where aged care homes may be considered hotels with nurses.
“Aged care is a highly regulated industry and operates in just about the same way everywhere you look,” says Price. “It has the characteristics of a franchise business, such as a hotel chain overlaid with care delivery. We bring that common operating model, or the franchise angle, to providers.”
Why? Because it’s not realistic to expect every provider to design a response to the legislation and standards, says Price.
The solution? Standardisation, which offers an opportunity to develop and share best practices across the sector.
“In time, the industry may adopt similar models to hotel groups, but now we have an opportunity to shape this ourselves rather than be directed by anybody else,” he says. “With innovators like us, the industry will evolve to be like hotels that deliver care.”
And while focusing on aged care as a business may be an unpopular notion for some, Price argues that as an essential part of society, and a difficult one to staff, means it must be considered so.
“Surely we need to find a way that makes it sustainable outside of government funding alone.”
And the future must suit the incoming cohort of residents, adds Duckers, many of whom will have the means and obligation to pay for non-care costs under the new Act.
“We know we have a new generation of people entering aged care, they are discerning, they are demanding and helpfully, somewhat motivated to pay,” he says.
“Yes, the baby boomers will demonstrate how the market will change the industry. How providers respond to these changes will dictate how well they prosper.”
FicusBridge is responding with a new generation of technology and solutions through three pillars.
Firstly, the revenue management practice is focusing on the transition to the AN-ACC funding tool and the upcoming changes to accommodation revenue.
“We have been growing quickly through 2024 and will formally launch our insights tool at the ITAC Conference in March 2025,” says Dalal.
“The tool is designed to support the revenue management teams with processes and workflows to report, remain compliant and ensure accurate funding is achieved for the care delivered.”
Through the end of 2024 and into the new year, the prototype revenue management tool BridgeInsights is being codesigned and trialled with clients. Other providers are invited to express their interest to join the pilot.
Building on the revenue management processes, the team is also delivering performance improvement initiatives across key business processes including marketing, admissions, staffing and board governance and reporting.
“The performance improvement initiatives are based on methodologies built and refined over many years and supported by a comprehensive benchmarking dataset, which covers the whole industry with high levels of confidence,” says Duckers.
“The dataset, coupled with internal data and process information, provide a solid foundation for optimising the business operations for providers.”
The third pillar is financial effectiveness and the optimisation of assets and the capital profile.
“As resident contribution models quickly evolve, the impact on capital profile and asset utilisation is evolving at a similar pace,” says Duckers.
Key here is transition from the refundable accommodation deposit – RAD – to daily accommodation payment – DAP.
“A DAP may become a more favourable option financially for wealthier seniors. This is not good news for providers who have a potential run of RADs post 1 July 2025 if they have deployed their RAD war chest in illiquid funds.
“The shape of the future aged care business is changing and providers should review their capital structure and strategy to address elements arising from the new Act.”
It’s a future the team is adamant should be arrived at collaboratively, in what Price refers to as crowd-solving.
“The view of the many is more powerful than the view of the one,” he says borrowing a sentiment from Dr Spock of cult television show Star Trek
“In the same way we embrace codesign to help build solutions, from 1 July 2025, significant changes require service providers to be adequately prepared.”
To support this preparation and their vision, FicusBridge is seeking interest from proactive providers for workshops throughout January, February and March to:
• identify the specific changes relevant to their operations
• assess the impact of these changes on their business
• develop a comprehensive plan to manage the identified impact
• monitor the execution of the plan to ensure alignment with the established objectives.
More broadly, the team is on hand to help providers on a project basis or as part of the team longer term, says Dalal.
“Consistent in all the solutions we deliver is the recognition that providers have a choice when looking at how to manage their business which means our solutions adopt a co-sourcing approach that offer access to robust processes, the right tools and a network that supports or coaches teams to be successful.” n
Bret Duckers