New Models for Sustainability Directed Care environment

1
New Models for Sustainability Directed Care
environment

• Australian Multicultural Community Services
  approach to financial tracking in a Client
  Directed Care environment

2
Consumer Directed Care (CDC) Strategies for
success

• A tracking system that will measure viability in
  providing CDC services with a whole of
  organisational approach.

3
Produced and funded

• Australian Multicultural Community Services Inc.
  (producer)
• Department of Human Services Victoria (funder)

4
About AMCS
AMCS is a community based organisation addressing
the diverse and changing needs of multicultural
communities in Victoria. We are caring for,
supporting and educating Victorias multicultural
communities, families and individuals to reach
their full potential. We work with people of all
cultures, faiths and genders to achieve cultural
diversity, equity and consumer satisfaction. We
care, we support, we educate.
5
The project

• Project background
• AMCS and Leadership Victoria
• Costing model, Training program Tool
• Project outcomes
• Key learning and applicability to other
  organisations
• Conclusion

6
Project Background

• Not-for-profit organisations are now adapting to
  a raft of government reforms that have been
  influenced by changing policy objectives,
  including
• The introduction of the first stage of the
  National Disability Insurance Scheme and the
  roll-out of pilot projects.
• The One DHS policy and funding plan.
• The award modernisation process.
• The commencement of the Consumer Directed Care
  (CDC) funding and care model for community
  aged care programs.
• Office for the Community Sector was approached
  to support the project as an example of how
  community sector capacity could be enhanced
  through partnerships
• Key themes across the current Victorian and
  national reform agenda include a focus on service
  delivery based on individual choice and purchase.
  

7
AMCS and Leadership Victoria

• Leadership Victoria is a not-for-profit
  organisation that aims to develop outstanding
  leaders who can create positive change within a
  global community.
• GreatConnections is a program that links
  experienced professional volunteers with the
  needs of not-for-profit organisations in areas
  such as business planning, governance, strategic
  planning and marketing.
• AMCS approached Leadership Victoria to provide
  pro bono business mentoring through
  GreatConnections. In turn this enabled Leadership
  Victoria to investigate the level of support
  required in the business- planning sphere.
• Leadership Victoria recommended a suitably
  qualified volunteer to undertake a review of
  AMCSs readiness to operate under a CDC model
  and build their capacity to develop and
  implement a unit-based costing model.

8
Costing Model, Training Program and Tool

• Expenses are allocated to programs either
• Directly including the cost of care and wages
  (plus on-costs) incurred and an hourly rate
  calculated for care workers and case managers.
• Recording centrally and allocated based on the
  resources intensity of the program includes
  direct labour, administration and general
  overheads.
• In addition, an organisation needs to include
  an appropriate margin to ensure their
  sustainability. This can be included in two ways
• Direct labour hourly rate and the overhead
  recovery rate
• OR
• Separately identified on the clients budget
  and recorded as a line.
• How the margin is included depends on the
  degree of transparency an organisation wishes
  to adopt with their clients. There are arguments
  to support both ways the labour rate allows
  easy comparison to brokerage rates charged by
  external clients the overhead rate is consistent
  with the concept of a margin on costs, such as
  labour. Or they can be separately identified
  for transparency reasons.
• A tool (in Excel) has been developed to assist
  providers to determine hourly and overhead
  recovery rates. This model identifies the margin
  separately.

9
The Components of the CDC Tool

• Consumers Individual Budgets - "ledger"
• Income
• Cost Allocations
• Reporting Mechanisms
• Matching Mechanisms
• I Income
• E Expenses
• R Reporting
• M - Matching

10
Consumers Individual Budgets - "ledger

• Step 1 Set up a "ledger" account for each
  consumer
• Step 2 As funds are received that relate to
  the consumer then these are allocated against
  the consumers "ledger" account
• Step 3 As the costs of their care is expended
  then this cost will be allocated against
  the consumers "ledger" account
• Step 4 Each month the income and expenses will
  be balanced to determine and over or under
  expenditure of funds to the individual consumer
  "ledger" accounts
• Step 5 Each month these consumer "ledger"
  accounts will need to be reviewed and
  consideration given to whether any adjustments
  are required as the result of over or under
  expenditure

11
Consumers Individual Budgets - "ledger

• Step 6 Any surplus funds are to be kept in the
  consumers "ledger" account, while any over
  expenditure will have to be negotiated with
  the consumer in relation to cutting back
  future costs
• Step 7 In the provider is unable to make any
  cut backs to the individual consumer, then
  the provider will have to carry the costs
• Step 8 These "ledger" accounts will provide
  the monthly statement for the consumers, with
  the attachments of expenditure, if required

12
Exercises in CDC

• Income
• Administration
• Core Advisory Services
• Direct Services
• Matching

13
Project Outcomes

• As part of preparing AMCS to be CDC-ready,
  financial reporting was improved to ensure
  indirect program costs were allocated on an
  appropriate basis. A suitable costing model has
  also been identified and trialled.
• The Leadership Victoria volunteer program is an
  excellent way for not-for-profit organisations
  to access skilled assistance with projects on a
  pro bono basis that otherwise would be beyond
  their capacity.
• Following a project trial and analysis, and
  consultations with several community aged care
  organisations, the following Consumer Directed
  Care (CDC) financial approach can be considered
  for use by other organisations

14
Key Learning and applicability to other
organisations

• Community sector organisations impacted by the
  introduction of the CDC model need to build
  internal capacity to adjust to the operational
  and financial changes required as a result of
  the new policy and funding model.
• Leadership Victoria is one organisation which
  can enhance the capacity of not- for-profit
  organisations to adapt to the new policy and
  funding environment by providing specialist
  volunteer support in areas such as business
  planning, governance, strategic planning and
  marketing.
• Appropriate financial recording systems need to
  be in place and all relevant staff need to be
  cognisant of the overall cost of providing home
  aged care, both in the main financial system and
  the care management system.
• Regular review of levels of care provided is
  required to ensure clients are not receiving
  care above the funding received. This review
  should encompass both care levels and available
  funding.
• It is important to acknowledge that the
  introduction of a CDC model will also require
  significant cultural change as staff adapt to a
  new model of operating which requires an
  increased level of attention to costing the
  various activities they undertake.

15
Conclusion

• The Building Community Sector Capacity to Adapt
  to a New Funding Environment project has
  identified the extent of systems and cultural
  changes community service providers will need to
  implement to ensure adherence to new government
  funding guidelines and to ensure financial
  sustainability.
• The CDC tool and training program has been
  developed to assist organisations to become
  CDC-ready. This resource is now available for
  use by other community organisations.
• The project has also highlighted the benefits of
  partnership with other NFP organisations, such
  as Leadership Victoria, regarding unit costing
  and change management.
• Thank you