Based on 2009-10 budget estimates, the Department spends in excess of $49 million to fund 27 organisations across Tasmania to provide
Accommodation Support Services (Group Homes). This represents, by a significant margin, the largest single service type funded by the Department. As a result of an analysis of all potential cost drivers impacting organisations currently known to deliver these services, it is evident that:
The key driver of unit cost continues to be labour, which accounts for approximately 83 per cent of the total cost per place.
The cost per place appears to be impacted by the level of complexity (or need) of the organisation’s client profile, which is further reflected in the ratio of staff to clients. This indicates that overall client need is a significant driver of the underlying cost.
Organisational size does not appear to impact the cost of providing a place, thereby providing no justification to ‘weight’ a price according to scale.
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There are no obvious cost differences with respect to the location of service delivery or regionality. No other recurrent expenditure was noted to influence the total underlying costs of service delivery.
Indirect costs appear to contribute to roughly 16 per cent of the total cost per place (Note: this will include a labour component, which is also captured in the total labour cost noted above).
Non-labour costs also account for approximately 17 per cent of direct costs.
The transition to a unit price relies on uniformity with respect to the definition of a ‘unit of service’ and the manner in which services are delivered (i.e. the amount of labour required to provide that unit of service). As with all services, it appears warranted that the future pricing mechanism be based on the common underlying cost structure, which utilises direct labour as the primary foundation.
Whilst organisations were generally able to identify the number of ‘places’ they were funded to provide, there were marked inconsistencies as to how clients were classified in terms of their disability and / or level of support need. Where data was provided that highlighted the relative ‘complexity’ of an organisation’s client base, it rarely correlated with any observed discrepancies in the overall cost of service delivery.
As such, prior to striking a unit price, additional information was gathered from organisations funded to provide these services in order to help define the amount of labour necessary to meet individual client support needs. In the case of accommodation support services, this is represented by organisational rostering practices and how these are impacted by the following factors:
Client diagnoses, preferences or support requirements.
The configuration of individual residences or residential clusters.
Based on information provided by the Department and confirmed by sector representatives, there are a number of commonly occurring residential configurations presently funded by the Department. In addition, there are remarkable similarities in the way organisations staff individual residences under existing funding mechanisms. In general, observed variations in rostering practices (and how providers deal with the complexity of individual clients or groups of clients) are characterised by:
changes in the number of staff required during the morning and afternoon period where clients will require more assistance with dressing, showering and meals (i.e. more staff will be required where there are more clients and / or clients with more complex support needs) the overall length of the peak periods
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the length of and / or existence of a day service closure period
the existence of a staff member rostered on for an ‘active night’ shift where clients are likely to require significant assistance at that time, versus a staff member providing sleep-over support only.
The following table illustrates the mix of accommodation types and associated rostering practices for which prices have been identified as part of this engagement (a total of 24 different configurations).
Table 4 - Roster of Accommodation Support 'places' (Source: KPMG)
Accommodation support services – Standard accommodation configurations and rostering profiles
Standard Significant medical / behavioural needs
Roster of funded
‘placements’ Sleep-over shift Active-night shift Sleep-over shift Active-night shift
1-bedroom * * * * 2-bedroom * * * * 3-bedroom * * * * 4-bedroom * * * * 5-bedroom * * * * 6-bedroom * * * * Pricing construct
In order to construct a unit price that aligns with each of the accommodation configurations outlined in the preceding table, the fundamental labour requirements were established through data analysis and extensive consultative activities. The underlying cost of labour, which is used as the basic pricing construct, incorporates and summates:
the key features of all customary rosters used by organisations delivering accommodation support places the impact of an individual client’s disability or level of support need on rostering practices
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the experience of staff and supporting qualifications and / or training required to deliver an effective service the amount of management support (corporate overheads) required
additional staffing requirements to be incorporated into standard rosters, such as staff supervision, service coordination and house management other rostering adjustments, including allowances for annual leave, public holidays, training leave, client sick days, staff meetings and day service
closures.
Recommendations
A final pricing schedule has been developed and provided to the Department, which is based on the prospective number of hours per week of direct client care. The final prices link the derived labour requirements per place to the observed labour cost and incorporate non-labour costs and
overheads, which were elicited from providers during the online survey and subsequent consultative activities.
Unusual rostering configurations
Where an organisation provides an unusual accommodation configuration or is required to manage an atypical mixture of clients or client needs, a price will be struck on the basis of the level of direct staffing required to deliver that service. In this rare instance, it is expected that the Department will review rosters submitted by the organisation to establish suitable resourcing needs and strike a price based on the price per observed FTE.