Weigh up potential impacts of reforms now, providers advised

Home care sector boards should not leave discussions about mergers until a crisis forces them too, says home care chief.

Home care sector boards should not leave strategic thinking and discussions about mergers and other responses to the reform agenda until a crisis forces them too, a home care chief tells Community Care Review.

“Boards should already be engaging in the strategic thinking, discussion and decisions about what the government reform agenda means for their organisation and whether a merger is the right strategy for them,” board member and outgoing chief executive officer of community transport provider Active Care Network Ben Jackson, told CCR.

Ben Jackson

“Making those kinds of decisions from a position of strength and not waiting until it is at crisis point, gives you the best chance of finding the right partner and building a combined platform that can increase delivery of vision and mission,” said Mr Jackson, who is also chair of Community Transport Organisation.

However, the work does not stop once a formal decision by members has been made to merge, he pointed out. “Continued discipline to focus on executing integration and implementing new strategies to grow the combined organisations’ impact are critical to realising the benefits of the merger.”

In a panel-style webinar exploring aspects of the merger process taking place next week, Mr Jackson – who was CEO of Easy Go Connect when it merged with GREAT Community Transport to form Active Care Network – will provide firsthand experience of undertaking a merger.

“My first day on the job was a joint board meeting between the parties,” he said. “I assisted the board to run the exploration process, including development of the business case, and once a decision was reached to merge undertaking integration and implementation of the new envisioned business model.”

Webinar explores sustainability responses

The free webinar – Going In-depth: Home care sustainability and mergers in light of industry reform and consolidation – is an initiative of the sector support team at Hornsby Shire Council in Sydney with support from organisations who host sector support officers.

Taking place on 22 August, the one-and-a-half-hour session comes in response to feedback from a similar online event in April, where attendees said they wanted further information on the merger exploration process.

The webinar aims to give attendees a new or strengthened understanding of mergers so they are better placed to consider them as part of their organisation’s strategic response to the big picture including in-home care reform, said Madeline Yan, sector support and project officer at Hornsby Shire Council. 

Madeline Yan

“The next 18-24 months will be a time of great change for organisations delivering Australian Government-funded aged care services, especially organisations delivering the Commonwealth Home Support Program, where the majority of services will be moved from a block or grant funding model to individualised funding,” Ms Yan told CCR.

“The change in the funding model – which is now scheduled to occur in July 2025 – is a fundamental shift for organisations, with implications for providers’ service, business and financial models.”

As a result, leaders are assessing their organisations’ capacity and capability to adapt to the new funding model and many are considering mergers and other forms of collaboration as a response to the reform, she said. “For many leaders, mergers are not something they have done before but they are keen for information and support that helps them understand the why, what and how of mergers.”

Not all proposed mergers proceed, says CEO

The webinar discussion – which will be facilitated by Australian Strategic Services senior consultant Aaron Goldsworthy – will draw upon the panel’s expertise and knowledge to explore several typical merger exploration steps and activities in-depth.

Other panellists include Russell Kennedy Lawyers senior associate Felicity Iredale and Jenni Allan, CEO of in-home support provider ADSSI – which has completed three mergers – the first in 2018 followed by others in 2020 and 2021.

“We have also made decisions not to proceed with a few mergers,” Ms Allan told CCR. “The point at which it was decided not to proceed was different for each of these. For some they did not pass the initial discussion phase of the merger exploration process, whilst others went through to full diligence and engagement with the party, following which the decision was made by the boards not to proceed.”

Jenni Allan

On key learnings to share with others considering a merger, Ms Allan said boards who adopt a “growth by merger” strategy or see it as an opportunity to ensure service continuity for their community, need to adequately resource the CEO and executive team to be able to undertake the required work.

“This can be through internal resources or external support. My board introduced new positions within the executive structure so I was able to be less involved in managing daily operations and able to devote more time to strategy, including the merger strategy,” she said.

A long and complicated process

For those about to embark on a merger, Ms Allan said ideally there ultimately needed to be one set of software systems, processes and a combined structure after integration. 

“We do not assume our systems or processes are better. We work with our merger partners – as we see them as true partners – to evaluate objectively what each organisations has and to choose the better system or process that will work for the new combined entity,” she said.

On challenges stakeholders considering a merger may experience, Ms Allan highlighted the long process from the start through to the completion of due diligence activities, the board’s decision to proceed and beyond. 

“Even once the decisions are made, there are many tasks to be undertaken before the merger happens. That prolonged amount of work while keeping up with all the other changes in our sectors, Covid, being short staffed, and rising costs, can be very challenging. The process takes a lot longer, and is more complicated, than I thought.”

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Tags: Active Care Network, ADSSI, Ben Jackson, featured, Hornsby Shire Councvil, Jenni Allan, Madeline Yan, mergers,

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