Microtowns and Other Big Opportunities in Aged Care
Faced with an ageing population and community concern about the quality of aged care services, the pressure is on for the industry to do better. The days of miserable canteen food and endless grey corridors may become relics of the past, with leaders in the aged care industry now starting to change.
Queensland-based company NewDirection Care is one player that wants to disrupt how aged care services are provided in Australia.
Speaking at the Australia-Israel Chamber of Commerce property lunch in Sydney on Monday, the company’s chief executive officer Natasha Chadwick explained how the company’s “microtown” aged care model aimed to change the industry.
Ms Chadwick had worked in the aged care sector for some time before she woke up to the problems in the industry about eight years ago when she went looking for care for her mother.
“It was pretty confronting to realise that after all of that time in the industry, I wouldn’t place her in anything I knew of here in Australia,” said Ms Chadwick.
Setting out to turn the residential aged care model on its head, the company wanted to move away from institutional aged care buildings. Instead, residents of the company’s first facility in Bellmere in Queensland live in a “microtown” that accommodates 120 people living in small “mini-care” homes.
There are only seven residents in each house, which is “just like yours or mine” and completely operational – with a laundry, kitchen and everything else a person needs.
The model caters to the full spectrum of care but the idea is that people are there to “continue the life they always lived rather than coming to an institutional environment where you’re thinking about death and dying”.
The “microtown” has a full suite of services, including shops, a cinema, café, beauty salon, and a general practitioner, a dentist and a wellness centre.
Because a whole new town needs to be built, the model works best for new developments rather than existing stock. However, a retrofit is possible, she said.
Ms Chadwick wants to grow the model.
How does it work?
At the new facility, located between the Sunshine Coast and Brisbane, the company both owns the land and operates the facilities.
It operates with a refundable accommodation deposit (RAD) – a standard room price set by the respective aged care facility. But there is also a daily accommodation payment model, where the RAD equivalent is paid periodically. These prices are different according to the quality, location and features of the accommodation.
The company also provides services to 45 per cent of its residents. The cafes and other services are also available to the rest of the community, effectively creating a bonus revenue stream.
The company is licencing the model so it will be available to other aged care providers. This will allow other providers to make the transition to the new model without “fear and risk”.
The licence covers not only the design of buildings, but also pathways to navigate zoning and approvals processes. The aged care operator would still own the assets and take responsibility for operations.
“Part of our goal in taking a leadership in the aged care environment was that I wanted to change the industry,” said Ms Chadwick.
“I think we need wholesale change in the industry. It’s not a level of service you or I would accept, yet we are allowing those services for our parents and the people that we love.”
The company has already been approached by several large organisations, including from charitable and church-based groups.
Another speaker on the panel, Estia Health chief executive officer and managing director Ian Thorley, said there’s an opportunity for many a residential aged care models to work and that the NewDirection model is “a particularly attractive one”.
He’s also more optimistic about fixing the traditional models.
“Clearly, there’s an enormous amount we need to do, and the Royal Commission will focus a lot on that,” he said.
All panellists agreed that there are big opportunities around the corner in the aged care and health sectors.
“Around 10 per cent of GDP globally is healthcare, around six to eight per cent in developing countries and around 17 per cent for more mature countries such as the US,” NorthWest Healthcare Properties CEO for Australia and New Zealand Craig Mitchell said.
“The growth is just phenomenal.”
Barwon Investment Partners director Rob Morrison said that sticky tenants, long leases, government backing and a “huge propensity to renew leases” makes these assets attractive.
Mr Morrison said that at the moment, much of the technology available in diagnosis, robotic surgery and post operative care has a “bizarre tendency to create more healthcare needs” but this will need to change.
“At 20 years of age, you go to the doctor an average of four times a year; if you’re 75 you’re going every second week.”
So, as the baby boomers hit those later years, he predicts “there’s going to need to be a lot of innovation to counteract the wave of demand about to hit the healthcare system”.
Photo: Melody Heart Photography