Beyond compliance: Navigating Australia’s new Aged Care Act for strategic success

With the new Aged Care Act coming into effect on 1 November, progressive leaders are seeing this as a golden chance to seize strategic opportunities to deliver quality care and sustainable growth. 

Understandably, there is a degree of change fatigue in the aged care sector currently. But we’ve been working alongside aged care providers who are finding ways to mobilise their people to boost organisational adaptability. In doing so, they’re prioritising older people who access services in a more safe, fair and respectful aged care system. At the heart of these changes is the prioritisation of customer-centered care, ensuring that obligations are applied in a way that we lift the quality of care with confidence.

This article is the latest our series on Aged Care reform building on the articles that we've written on risk and governance, system of control, customer experience, and more. In this article, we explain some of the most effective approaches we’ve helped leaders to implement. Each of these lay foundations for organisations to enjoy lasting success in the aged care sector while, importantly, maximising the quality of care they deliver.

The reforms represent a significant transformation in aged care and understanding them is essential for organisational resilience. Further, recognising the implications of these changes on your existing operating model—across people, processes, and systems—allows for strategic planning, operational preparedness, and progressing generational aged care reform.

Seeing your organisation in the fresh light of the new Aged Care Act can even help you reinforce financial sustainability, strengthen workplace and cultural alignment, and future-proof your organisation.

But with so many changes, how do you maintain oversight and ensure the changes stick? In our experience, this can be achieved by managing the changes with project disciplines and embedding controls across your processes that includes making people to be accountable for each change and implemented controls. Leaders should consider not only the individual impact, but also the broader impact of those on the organisation. For each change, consider how it could alter the way your organisation thinks about its operations and services. 

People who are assigned to manage change should have protected time dedicated to that task. On the face of it, this may sound ambitious—aged care organisations have limited resources after all—but the cost of not dedicating people to the change process will be far greater in the long run. 

Each workstream and role that is tasked with managing change should have clear metrics, measures and evaluation criteria. Coming back to regularly assess the impacts of change is imperative to ensure what you have done is fit for purpose.

Embedding controls ensures you have tangible ways to manage risks and give you early indicators of when things may not be going to plan. An example of this with the changes under Support at Home could include having controls that support timely flagging of clients’ unused funds and balances. This ensures they are fully utilising their allocations and do not lose funds due to new rules regarding roll overs. Controls in this area can also help support to optimise package utilisation. Good controls, coupled with robust monitoring and oversight will give you early warning signs and enable you to act timely to achieve the best outcomes for your clients. 

It can be transformational when organisations develop a clear roadmap. This enhances compliance management and resource allocation, while encouraging organisational adaptability and accountability along the way. A key aspect is ensuring a continuum and integration of care across different service settings to maintain seamless client experiences.

Using the roadmap, leaders can track progress against requirements of the new rules, monitor and address challenges early, and prepare for ongoing reforms beyond 1 November. A roadmap also enables effective management of financial resources, the workforce, technology, and infrastructure investment. Given Australia's ageing population, it’s vital that workforce planning addresses key drivers affecting registered nurses, domestic and care staff to ensure robust care delivery.

Whether you have a roadmap now or you are still developing one, there are several proven steps to maximise the benefits of it. The following steps can help you not only meet the Act’s requirements, but also maximise the opportunities that stem from these: 

• Ensure your roadmap is aligned to the reforms and rules
• Reinforce your roadmap with a clear action plan that includes measurable timelines, specific goals, and clearly assigned accountabilities
• Build clear KPIs and Key Risk Indicators (KRIs) and controls to measure and support changes and enable tracking over time
• Perform a gap analysis; documenting your current state and what actions you need to take to achieve a future state, considering your controls to support meeting your future state
• Across the organisation, invest in resources and stakeholders to lead the actions, informed by risk. Remember, this isn’t business-as-usual—this requires a collaborative effort that encompasses all services. Working in silos will be counter productive.
• Ensure your board of directors is actively engaged and informed about the new Act’s provisions, including: strengthened Quality Standards; new protections for whistleblowers; Code of Conduct mandatory training; Misconduct register; new funding model for residential care; new requirements for ongoing reporting; and the new Support at Home program
• Incorporate your ‘next phase’ into the Roadmap, by using this time of enhanced, high intensity support across your services to agree with what comes next. Plan and cost this out, keeping this scope phase clear, but flexible and linked to clear objectives, compliance and efficiencies. With software providers enhancing systems to deliver all that the regulations require, you will need to include implementing new functionality, removing workarounds and optimising current ways of working which can yield large efficiency gains. Estimate, prioritise and plan well with everyone aligned on what is most important.
• Constantly revisit your plan to track progress

The best roadmaps we’ve seen align the whole business to the requirements of the Aged Care Act and its reforms. They provide direction, confidence and a structured approach to transformation that will deliver on the intended outcomes of these obligations in a way that is cost effective and optimised — this means reducing any unnecessary layering of compliance and re-designing a fit for purpose system of governance, risk and compliance.

Of course, increased monitoring and compliance comes with a price tag too. That’s why it’s more important than ever to maximise operational efficiency, to closely consider the broader operational cost base, and to be open to new ways of operating. 

Example of workforce development and innovation

While the scale of reform and rules may seem daunting, the Act also provides significant opportunities for those organisations prepared to seize them. These include the possibilities of genuine growth, strategic clarity, fiscal stability, and operational improvement. 

We have helped aged care providers to enhance operational excellence and process optimisation by implementing controls frameworks that support high reliability principles, lean management, integrated care models, and sustainable practices. This has included: 

• High reliability organisations take a system wide approach and focus on processes and controls, not people
• Following lean management principles and techniques to streamline processes, reduce waste, and maximise value. This can deliver significant operational improvements and cost savings
• Developing integrated care models that facilitate collaboration across different care settings, improving continuity of care and putting consumers at the heart of change
• Creating services for clients of the future, such as: 
  • Environmentally sustainable practices (transitioning to LED lighting, energy-efficient appliances, and renewable energy options like solar panels)
  • Building and facility design (small house model, or hub and spoke model)
  • Artificial intelligence and tech enabled services 
• Expanding services and achieving economies of scale through partnerships, collaborations and mergers and acquisitions
• Considering the potential of home care for the organisation. For example, how ready is your organisation to benefit from the additional 20,000 home care packages before 1 November and the further 20,000 by the end of December? How ready are you to implement the new quarterly budget system?

Building a stronger future today

While the new Aged Care Act brings new rules and very real compliance requirements—there are also genuine opportunities to strategically reshape and strengthen your organisation’s future so that it thrives in the new-look sector. A holistic, long-term view—balanced with short-term implementation objectives—can set your organisation up to achieve its goals, deliver quality care and secure sustainable growth.

It’s time to think big and to be bold. These reforms put genuine opportunity within reach for aged care organisations.