THE BABY BOOMERS ARE AGEING –
HOLD ON TIGHT!
Creating Shared Value in Aged Care
History has shown time and again that when it comes to Baby Boomers, maintaining personal freedoms and liberties is what defines this generation more than any other cultural descriptor. Through the eyes of this generation, aged care is ripe for disruption. As Boomers start turning 65, sudden eligibility for aged care services has presented this cohort with a reality they previously only associated with their parents’ generation.
In this article, we’ll cover what needs to change in aged care to appeal to a new type of consumer; how global technological advances can aide these changes; and how the concept of creating shared value can help deliver new business models to cater to the needs of both the consumer and caregiver.
Appealing to a new consumer: The Baby Boomer
At the recent Aged Care Workforce Strategy Summit in Melbourne, I was surprised to hear the younger Boomers openly declare they would never send their parents into a residential home, suggesting professionals from within the sector are disenfranchised with the existing model. And those Boomers from the industry who had no choice but to have their parents looked after in ‘resi-care’ were often left unimpressed with the level of service. The Boomers’ strong response to the failings of Australia’s current aged care system, coupled with the dual realities of an ageing population and a significant lack of qualified aged care workers, is helping to drive change in a sector long associated with government funding.
With the new Consumer Directed Care (CDC) approach now available to aged care consumers, there will be an increased focus on home care delivery packages that aim to keep seniors living independently in their homes for as long as possible. The shift towards consumer-centric care in the home and provision of additional ‘soft’ services (e.g. companionship) is a significant step towards establishing independent living for seniors on their terms. Boomers rejoice!
The Three A’s: Aged Care, AI and Automation
In a recently published global workforce report, it was stated that up to 60% of all occupations and one third of all work tasks could be affected by Artificial Intelligence (AI) and automation in the coming two decades. AI and automation will likely displace not only a high number of manufacturing and office support roles but also highly paid roles across the professional services sector. It is estimated that some 400 million to 800 million workers will be displaced globally by 2030 due to AI and automation. This scale of transformation has not been witnessed since the early 1900s with the industrial revolution displacing traditional farming and agricultural jobs.
Within this seismic 21st century job shift, there is hope displaced workers will switch careers and become part of the new – and dare I say it – revolutionised aged care workforce.
AI and automation will arguably lead to increased productivity, alleviating workforce shortages across a number of sectors globally, including aged care. In fact, AI and robotics is already being adopted in some aged care facilities, with emotional and physical support provided by robots for the elderly. As brilliant as this sounds, it would be folly to assume robots or displaced workers alone could fix the aged care resourcing problem we face. Consider this: the number of Australians aged over 65 will double by 2050,and Australia’s aged care workforce needs to grow from 360,000 in 2017 to 1,000,000 in 2050. The scale of the challenge we face in attracting hundreds of thousands of workers to a sector where not even industry insiders would send their parents, let alone themselves, is enormous.
For this reason, it will be crucial to find ways to attract and retain workers in a sector that has an overall image problem. Granted, technology enablers such as AI, the Internet of Things, Blockchain, Augmented Reality and Virtual Reality will all play a role in attracting workers to aged care. The primary challenge however will be to develop an industry-led employee value proposition and retention strategy for a sector where the demands of the role have taken their toll on care workers, both mentally and emotionally. Perhaps in the future, AI and automation of carers’ routine tasks will create more time for genuine and meaningful interactions between ‘Boomer’ aged care consumers and their carers, leading to a perceptual change of the sector for new recruits. Perhaps automation of routine tasks will lead to new growth in ‘softer’ services and more flexible working and training arrangements, thereby attracting displaced workers who seek to join the aged care gig economy.
How the sector is positioning itself for the future
Brave is the person who doesn’t believe new industry players can disrupt the aged care sector. Look no further than the taxi industry as an example of a regulated sector being blindsided by new technology platforms and previously-untapped consumer needs. This year alone saw South Australia’s UberCare launch its digital aged care platform, with founder Simon Chappel (himself a Boomer) developing a phone app where aged care consumers can book locally available carers on a whim and provide a rating of the service much like its ride-sharing namesake.
Also in South Australia, The Growth Lab (an inter-industry collaboration between the health, aged care and disability services sectors) is unpacking value where sectors previously operating in silos could only imagine accomplishing on their own. This initiative borrows from the concept of shared value and human-centred design and will be ready to pitch new business ideas to industry and private sector investors in February 2018.
In Western Australia, Sodexo subsidiary company Comfort Seekers is making inroads in the CDC space, offering seniors the usual home care services but also promoting ‘soft’ services like conversation and companionship, garden and pet care, thereby building a sense of connectedness and belonging for consumers. Originating in the USA, Comfort Seekers is a franchise-based business that has the ability to scale up and deliver home care in areas where demand is forecast to be most acute.
Creating Shared Value in Aged Care
‘Creating shared value’ is a business strategy that places economic and societal value side by side, generating sustainable profits and long term social impacts. To deliver on the latter, shared value needs to focus on resolving a social problem that is material to the business and addressed at scale. It is more than reputation management and it is much more than being ‘socially responsible.’ The strategy originated in the US and has been gaining ground internationally for several years. It has been implemented by some of the world’s biggest corporations to further their competitive edge and to uncover previously underserved markets, in sectors as wide-ranging as healthcare, education, insurance and agriculture.
Industry observations suggest a commonality exists among businesses driving a shared value strategy. That is to say, these businesses tend to be market-driven and dynamic by nature with supportive executive teams. Locally, they also have management on the ground to ensure shared value initiatives are able to flourish, not flounder. Furthermore, these organisations gravitate towards long-term success for the organisation and avoid short-term thinking.
Shared value often involves cross-sector collaborations (private – public – non-profit) and is used as a strategic vehicle to identify what additional services consumers will need and want; and how to deliver those services through direct or indirect channels. Aged care non-profits that partner with businesses to pursue shared value strategies can thrive, particularly in a future where value creation is expected across all healthcare sectors. Equally, businesses that learn to collaborate with these non-profits can ensure the knowledge capital gained over decades is transferred to new care processes and systems.
As Boomers start receiving home care en masse and maintaining their independence long into their 80s, residential care providers will need to adjust their business model accordingly. This could result in market consolidation or – if shared value is pursued – an opening up of new products and services. In the latter scenario, residential facilities could become ‘experiential destination centres’ for seniors, focusing on the delivery of wellness or entertainment services for active and independent Baby Boomer consumers. In this future scenario, ‘experiential’ aged care centres are likely to employ workers with a broad range of skills including retail, healthcare, hospitality, education and the arts. This suggests a non-linear impact on the aged care workforce but one where the AI-displaced workers can gain a second opportunity to thrive, alongside the many thousands of tertiary students seeking pathways to meaningful employment.
Fortunately, aged care scenarios like the above are now being mapped to determine the current and future state of workforce shortages. We also know the existing government funded model is unsustainable and will likely undergo major reform. Until then, it will be prudent for Boards of aged care providers to:
Adjust their leadership mindset to become market-driven organisations;
Broaden and deepen home care services for incoming Baby Boomer consumers outside of the funded model;
Strategically review the future purpose of residential care facilities;
Embed new enterprise-wide technologies to amplify and support the level of care being provided; and
Pursue a diversified growth strategy that includes a shared value business model.
In conclusion, the above recommendations should help industry players move beyond a government funded model. The future we see puts shared value front and centre, as this business model encourages organisations to develop and measure the societal impact of its products and services, alongside the economic value generated. Like the Boomers, we want to see positive change in aged care and will be watching sector developments with interest.
1 “Jobs Lost, Jobs Gained Report,” McKinsey.com, December 2017
2 “The Future Is Here – Robots In Aged Care,” Aged Care Guide, November 2016
3 “Aged Care Services Report,” Australian Government Productivity Commission, 2015
4 “Inter Industry Collaboration All Part of Growth Lab,” Aged Care Guide, December 2017
5 “Innovating for Shared Value,” Harvard Business Review, September 2013
Q Social Impact is a dedicated shared value and social impact firm.
© Q Social Impact P/L 2017