The Weekly SOURCE reported BaptistCare (NSW, ACT, WA), Baptcare (VIC, SA, TAS), and Baptist Care SA would merge last November, just shy of 18 months after BaptistCare NSW/ACT and Baptistcare WA announced their consolidation.
Charles Moore, who has emerged as CEO of the combined group, explained why the merger made sense last Friday in an interview with The Australian.
Influence
The first reason was increasing the group's level of influence in conversations with Governments on policy and reform.
Up to $20M in savings
“Secondly, this is about financial sustainability, we can’t get away from that,” he said.
“Whilst we work in highly regulated markets, down to being dictated how many care minutes need to be provided with each of our residents, there is significant savings to be made by the eradication of the duplicate services in our back office."
Charles said between $15 million and $20 million will be made in "synergistic savings" in support services across the organisation.
Staffing
The third reason is the ability to find new staff.
“By being larger we have an opportunity… to really enhance the employee value proposition with that national name, we can offer different benefits," he said.
Reforms will require scale
Charles also said the pricing mechanisms being implemented later this year with the new Aged Care Act and Support at Home reforms will require providers to have scale to remain sustainable.
“The changing in the pricing dynamics and the way the home care market will work is placing further burden on operators, there is going to be reduced margins,” Charles said.
“So you’re going to have higher volumes or more clients and you’re going to have to invest in better and more intelligent systems so that your staff can optimise the time they’re with clients not doing paperwork.
"I just don’t know how small operators will actually be able to remain in business.”
The proposed liquidity ratios will also increase pressure on providers.
“Under these changes we have to hold almost three times as much cash as we would today,” he said.
“The larger you are, the more chance we have of being able to preserve that cash. For small operators, it’s going to make running your business very, very difficult.”
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