Leaders in Faith-Based Care

St Vincent’s Health Australia

With a wealth of facilities and resources in three states, a workforce of more than 16,000, and a long and strong reputation, St Vincent’s Health Australia (SVHA) is justified in claiming to be the nation’s largest not-for-profit Catholic health and aged care provider.

Far from resting on its laurels, SVHA has been reorganising its structure and changing direction in order to continue to meet today’s needs while also reflecting the demographic demands of the next two to three decades. John Leahy, CEO of St Vincent’s Aged Care & Shared Services, explains to Business in Focus that there are two main streams of care: healthcare itself and aged care. While both have their respective specialities, combining them under a single banner instead of treating them as different businesses is going to bring a number of savings in terms of streamlining the operation – even as the focus swings more towards taking care of seniors.

“There is definitely a demarcation between the two; they are separately funded and have different compliance mechanisms and regulatory controls, but the reality is that in the next five to ten years, aged care will become ‘sub-acute care’,” Mr Leahy explains, adding that the kind of treatment carried out in sub-acute hospitals and geriatric facilities will be what ‘aged care’ is all about. “The demarcation will rapidly decrease.”

A couple of years ago, the board developed its first aged care strategy, deciding to look at the next five to seven years and increase its footprint by a factor of five. “We had around 500 residential aged care beds (in New South Wales and Queensland), and our goal is to get that up to around 2,500 beds.

SVHA maintains large public hospitals in Sydney and Melbourne, including Sydney’s eponymous iconic institution, which is more than 150 years old and carries an enviable international reputation for excellence in both patient care and medical leadership. The organisation also has eight private hospitals across the country. But there is a realisation that growth needs to take place in the aged care sector. “There is a tsunami of demand coming; governments of all persuasions have wrestled with how to incentivise the industry to cater to it,” says Mr Leahy. There are a number of such incentives to build capacity, including the latest changes in the ‘Living Longer, Living Better’ reforms, which will begin to take effect in July of this year.

Mr Leahy has more sympathy than many others in this industry for the problems of governments – faced with blowouts in budget on all fronts, aware of the need for ever greater spending on aged care, but lacking extra resources to allocate. “Perhaps it has not been done in the past as well as it could have been done, but I don’t know that we have a whole cohort of elderly people missing out on aged care spots,” he says. “We don’t have masses of homeless aged care people, so capacity appears to be coping with current demand.”

Does he believe the pollies have the will to ensure facilities will continue to match up to the fast-rising demand (25 percent of Australians aged 65 or over by 2050)? “Yes. Because no government of any political persuasion could possibly allow it to be anything else. The consequences, politically, would be diabolical.” In any case, Mr Leahy points out, the average entry age for aged care (as opposed to retirement living) is now around 83, reducing the dramatic impact of that 25 percent statistic.

All of SVHA’s finance for aged care comes from official channels, mostly from the government’s funding tool, while quite a large amount for the hospitals comes from a variety of charitable sources and fund-raising; the Catholic Church itself is not concerned with funding the enterprise. The whole organisation has a decidedly religious foundation, but there is a completely non-denominational aspect to who gets treatment – and indeed who works for the body (an estimated quarter of all staff profess a Catholic faith). “Just one of our facilities in Sydney has staff from 18 countries – it’s truly a multicultural business.” Mr Leahy says that despite the current Royal Commission there has yet to be any deleterious effect on the medical sector. “From the health viewpoint, we have not experienced any negativity towards us. We have certainly seen no reduction in demand for our services.”

Sydney poses some financial problems, not the least of which is that the individual bonds that fund care places (or rooms) are effectively capped at $550,000. Any funds over that amount require the submission of a special application for each facility in question. That figure does not reflect location, and naturally buys less in inner-city Sydney than it would in the western suburbs. Could – indeed should – elderly people being treated by SVHA consider moving to those suburbs to offset the cost of their care? Not if it can be avoided, says Mr Leahy, citing possible disruption and discomfort associated with a move, which could lessen the quality of life for those individuals in an already delicate stage. “If you have to build in inner-city Sydney or Melbourne, the $550,000 becomes marginal. If you are way out west, where land prices are a third of those in the city, or in Hobart or Adelaide, it’s less of an issue.”

He continues: “There are a number of new developments in the outer western suburbs of Sydney, but our experience is – and statistics clearly show – that elderly people who have been in their homes for maybe 40 or 50 years prefer to stay within their existing community.” Furthermore, SVHA’s capacity tends to concentrate around Catholic parishes, which tend to be in the cities. So, rather than move out, SVHA prefers to bite the bullet and find a way to make staying in town financially feasible.

Attaining, training and retaining staff, especially in this industry, is a priority. “It’s a real issue for the coming ten years,” shares Mr Leahy, who says the average age for nurses in the hospital system has risen to around 44, while in aged care the figure is 55. “We can see that, especially in aged care, a lot of effort is being put into not only retention of the workforce but attracting new workers and younger workers. We are trying to do that by being innovative in what we can offer. It’s a growth area of employment.” He points to BUPA’s scheme to try to attract 60-year-olds back into the industry. “As long as they have their health, they tend to have a great work ethic, they often want to get back into the workforce, and they still have a lot to offer. It’s a very smart strategy.”

SVHA itself is also looking at the other end of the recruitment chain – promoting health and aged care in the Catholic schools movement to give young people a career path through the industry. One ray of hope is that there is no longer a significant difference in the cost of staff between rural, regional and urban locations; unlike the land prices, wages are consistent country-wide.

Volunteering is also of great significance in the overall SVHA offering. “One of the fundamental differences between our aged care and health sectors is that in an acute hospital you are usually in and out in four days, whereas in an aged care setting, the average stay is two and half years. So the way to deliver volunteer services is completely different, although just as important,” says Mr Leahy. Many elderly people are alone or not often visited by family, and they need companionship. “Volunteers are a very integral part of our business as a not-for-profit provider because they offer so much to the patients.”

Rising demand will mean SVHA must continue to invest in more bricks and mortar. “The best information we have is that over the next 20-30 years there will be a constant need [for the industry] to build several thousand beds per year,” Mr Leahy concludes. “We believe we will be able to keep pace; we believe there will be a consolidation within the industry” – a thinning out of the herd of providers – leaving “bigger players with economies of scale who can deliver a more cost-effective and efficient product.” One thing is certain: despite its not-for-profit status and Christian outlook, there will be no letting up of St Vincent’s desire to keep up with change and remain the biggest of the lot.

For more information about St Vincent’s Health Australia, please visit http://svha.org.au/

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