Demonstrating that her disruptive idea in the aged care space has commercial sense and is viable long term has proved to be her biggest challenge – convincing lenders, valuers, industry leaders and even incoming staff of the value of what she is trying to achieve.
“Yes, it’s a big risk, but if we don’t take the risk, who will? Someone’s got to – we’ve got to demonstrate that you can do it better,” Natasha says adamantly.
Speaking exclusively on the My Business Podcast, Natasha discusses exactly how her model is changing the way aged care services are administered, keeping a tight lid on costs at a time when industry costs are soaring, and pursuing customer interests without the backing of your broader industry. Plus loads more!
Enjoy the show!
Adam: G’day everyone. Welcome to the My Business Podcast. Thanks for tuning in, it's Adam Zuchetti here in the chair. I've got two people in the studio with me today. I have a new regular co-host joining me. Andy, how you going?
Andy: I'm very well, Adam. Thanks for having me on boar. Yes, I've joined the team and I'm very excited about working with you in My Business. I noticed you're not in a chair though, I noticed you're standing. As is myself but that's okay, I'll let it pass.
Adam: It's a metaphorical chair.
Andy: That's good, that's good. But Adam, enough about my yacking, let's talk about today's guest.
Adam: Yes, so today's guest, we have Natasha Chadwick from Synovum Care. How you going, Natasha?
Natasha: I'm good, thanks, Adam.
Adam: Thanks for coming in. So tell us a bit, you operate in the retirement living space, aged care.
Natasha: Yes. So Synovum Care group is a small aged care operator. We provide services in New South Wales, and also in Tasmania. And we're about to open a new aged care community in Queensland.
Adam: Okay. So have you always operated in the aged care space? Has that always been your career?
Natasha: For about the last twenty-odd years, yeah. So started out as a consultant in the aged care space and did a lot of consulting work across Australia and also internationally. And then moved into operations, and I've had, I think this is the third business that I've founded, if you like, in the aged care space.
Adam: Okay. Do you operate all those businesses together or have you sold one and moved on to the next?
Natasha: Essentially sold one and moved on to the next.
Adam: Okay. So Synovum Care itself, how long's that been around?
Natasha: We commenced in 2011. Yeah.
Adam: Okay. So this is what, six year now?
Natasha: Six, yeah.
Adam: Okay. Interesting. You were saying just before we went on air that, obviously you operate an industry that no one chooses to go into. What are the challenges for you in terms of that? Because you are dealing with such a different and such a personal industry, and as you say, no one actively chooses to go into it and it's often the person’s children that are helping make the decision for them.
Natasha: I mean, in terms of age care, you know, where we operate is really in the high care area. So someone might be living with the diagnosis of dementia, and all of a sudden, can't cope with living at home, or the family, you know, can no longer cope or there might have had a number of hospital admissions, which means that they can no longer care for themselves. And so aged care is kind of like, you know, it can be that last resort. And for a lot of families it's a really difficult decision to actually make. You know, to place their loved one, if you like, into somebody else's care.
Adam: How do you actually go, in terms of marketing? Because obviously, you don't want to be really insensitive and just push your brand out there, "Hey, we're fantastic” kind of thing. You've got to be really sensitive about doing it, and also, I imagine, there's quite a big educational piece around just the sector as a whole. This is what retirement living involves, these are the kind of things available. You've obviously got government assistance and funding in that as well. So how do you actually go about marketing your brand and trying to encourage people in, while still maintaining that sensitive approach?
Natasha: Well, I think it's really important that we talk about our story, and what it is that we do, you know, for residents in aged care that's different from other operators, if you like. So for us, we operate on the basis of values and those values are everything that we do. So, you know, residents are treated as an individual. You know, they're not one of crowd, which happens a lot in an institutional setting. We believe in community and the importance of community as well as the individual. Respect, you know, it's very important that we have respect for relationships in everything that we do. Empathy. You know, when you're dealing with a family who is struggling to understand what's actually happening with their loved one, empathy is incredibly important. And of course, relationships. If we don't form really good and strong relationships with their families and residents and, you know, it's really difficult for us to actually understand what level of care they need, what it is that they need from us.
Andy: Natasha, you mentioned, you've been in sort of the age care business for 16 or so years.
Natasha: Twenty plus.
Andy: Twenty plus years, there we go. But the business itself has only been running for sort of six, seven years. A lot of people have an idea of what aged care is, certainly the older members of my family, what were put in aged care and I won't be unique in that. But you were talking about how you think you've disrupted the space and how things are different. And when we think of disruption, we normally think of technology and innovation, all this sort of stuff. What do you think the space was before? How did you see there the ability to disrupt that, and how did you actually go about doing that?
Natasha: So aged care is very traditional. It's operated in the same way for many, many years. And we've had some significant reforms, aged care standards have been brought in, building standards, those sorts of things. But we continue to build really large institutional environments. You know, they might be beautiful – they're aged care hotels, if you like. But they still don't meet the needs of the individual resident. You know, all of the international research, all of the research here in Australia says, particularly if you're living with dementia or a complex care need, that you need a normal environment. And yet, somebody who's living with dementia is then admitted to a really large institutional environment, and you know, they lose themselves. And in many cases they get sicker or might die faster than they normally would have if they'd stayed at home, if they could have been supported in their home.
Andy: You mention a lot of existing sort of regulation in this space, which I don't think will surprise anyone. I think when anyone disrupts the challenges, that red tape and things, that may be in process for good reasons. What challenges did you come against in trying to, I suppose, move the needle in this space?
Natasha: Well, I think government has made it really clear that choice, and consumer choice has got to be the way of the future. And while they're still working through that, you know, that spoke to us, if you like. And we didn't really believe that there was a lot of choice that was being offered in aged care, in traditional aged care.
So what we did in terms of disrupting the space was we have developed, through a lot of international research as well as a lot of research here, so it's not just a model that we decided to put in. But in that we identified what we call small-scale living. So instead of building large institutional aged care buildings, that might house a 120 people, we build a house and that houses seven residents who live together. And then we have also, you know, instead of having carers who are specifically trained just to provide care to a resident, we have multi-disciplined role that essentially does the budgeting for the household. You know, prepares the menu based on what it is that the residents themselves want to eat, and that can change on a daily basis. And then, you know, they do the washing with the residents, the cleaning of the house with residents, if residents want to be involved, and do all the personal care for residents as well. So it's a really strong relationship-based connection with residents and their families.
Andy: There's a lot there. What was the hardest thing to implement, do you think? And how did, when you hit that, was there a point when you started out, and you hit that challenge and you just thought, "Ahh.” And then how did you move beyond that to obviously where you are now, where you're very successful?
Natasha: Well, I mean, there’s probably two things. One is staffing, our staff model is incredibly task-focused in aged care – and that's not our staffs fault, that's the way that the industry has evolved. But they're so used to doing it that way that they don't know how to do it in any other way. Breaking that down in our current aged care environments has been incredibly difficult and every day it continues to be difficult. When we build something new, so we piloted this model in Tasmania in two houses, we brought in all new staff, and so they didn't have that. They weren't tainted by, you know, the previous aged care environment. And we just trained them and gave them a lot of education, a lot of support to actually be able to undertake our model.
Adam: How do you actually bring new staff in? Because it's obviously quite a challenge in a lot of industries, but particularly in this space, I actually use to work in aged care myself. And so I worked for the community care division of a nursing home, trying to encourage people to stay in their homes longer, that kind of thing.
Adam: So I really actually admire from that sort of personal perspective of what you guys are doing. But I really sort of understand the challenge of trying to get people in, because a lot of, you know, people think about healthcare, they want to go for RN, registered nurse, that kind of thing. So what's your approach to recruiting people and getting them in? And also you were just saying that you were trying to get sort of new people in, who aren't necessarily rusted in to a traditional model, that kind of thing. So that kind of doubles your challenge on the recruitment side as well.
Natasha: Well, it's interesting because it actually widens our network, because we're not asking for people that have experience or a particular qualification. We train them on all of that. So in some respects, I think it's actually, makes our recruiting process a lot easier than being in a traditional aged care model.
But one of the things that we do differently, and I think it's an incredibly important part of our success, if you like, is that we recruit through an assessment centre process. So we'll have forty-odd people come in after they, so for example we might have 300 applications for a role. We do what we call ragging, so red, amber, green everyone. You know, how they stand, in terms of our values, not in terms of their experience. Then we'll bring them in to an assessment centre, and that assessment centre will take about two and a half hours and right from the get go, they understand what our values are. They understand what our expectations are of them as employees, and what it is that they're getting into.
They do a lot of teamwork exercises, so we can immediately assess things like communication skill, their ability to relate to other people, whether or not they're going to have tenacity to get their point across. All the resilience, all the actual values that you want to have in work workforce.
Adam: I'm just thinking about your cost base, because the amount of training that you do for your staff, but also having the model of building a house rather than an institution, and having that kind of low-density housing, both of those factors separately, but then combined, must really, really increase the cost base. How do you actually manage those?
Natasha: Interestingly enough, yes, our operational costs are marginally higher, but marginally. And that is because even though we have house companions and, you know, they're quite different roles, we don't have the delineated roles that you currently have in aged care. So we don't have a catering department, we don't have a kitchen that has kitchen hands and everything else. We don't have cleaners, we have a house companion who does all of those roles.
So from that perspective, yes, we spend a lot of money training our team. Induction program, it's a minimum of a week for orientation, and prior to that, our team members will have already been trained in healthy bodies and medication management, first aid and all sorts of things. So we do put lot of time and effort into that, but our turnover rates are minimal. And so in actual fact, we get that back from having put in the education and getting the in the first place.
Adam: Okay. So in terms of this new model that you're bringing have you actually launched it yet in Australia?
Natasha: Yes, we have. So it was launched in 2014, after about 18 months of research, which also saw me take a team over to the Netherlands and the UK, and everything. And it was in the Netherlands that we saw a model very similar called the Hogewey, and that really helped, you know, inspire us to actually come back to Australia and yes, do what we wanted to do.
Adam: You must have faced a lot of resistance though, both sort of within the industry, and potentially even from customers, until they'd actually been there and seen it themselves, and said, "Okay, well, I understand." Taking sort of, you know, disruption of a very, very traditional, and very set in industry. There must have been so much resistance there.
Natasha: Look, from the industry itself, probably more resistance. There's a lot of people that, you know, kind of are looking at us, and watching us. Some of them, I think, you know, want to see us succeed, and are really interested in the model itself, and you know, we're being asked to partner with a lot of people. But there's also just as many, that I think are waiting to see us fail. Because it's easier to say, “Nothing can be done. You know, we have to continue to operate the way we've always operated. Because we know that that means that we've got a financially viable business.”
You know, for us it's really important that we can demonstrate to our industry that this is possible and that it can be done, financially viable. And one of those things is our capital cost. Our capital cost is less than it is costing a lot of traditional operators to build a large institutional building.
Adam: Okay, because I was actually going to ask about the establishment cost. Because if you are taking a very new concept to market, it can be difficult to get funding externally or things like that.
Natasha: So I mean, we already had the licenses from the Commonwealth Government, so we know that we will receive operational funding once we actually open the business, based on, you know, what the needs are for our residents. In terms of the capital cost, you know, we've had to demonstrate to valuers, to the banks, to industry leaders, through consultants and so forth that this model is financially viable. That our bank, St. George Bank is backing us to do this development, and everything demonstrates, particularly after our pilot in Tasmania, that not just the capital cost are on line, if you like, or even less, but operationally it will work as well.
Adam: Now, big cost has to be the property, and obviously we're dealing with, everyone's throwing the bubble word around in terms of housing, particularly in Sydney and Melbourne. But you've also got, when you're sort of developing, you've got all the development costs, you've got architects, you've got all the council fees on the land that you're holding while all this is going on.
Adam: There's a lot of money tied up in the project before even the groundwork's laid.
Adam: How do you actually manage that?
Natasha: Well, you know, I've been operating in aged car for over 20 years. I have the other businesses, you know, that support and, you know, and everyone that believed that we can actually achieve this as well. We've been able to demonstrate through our pilot that it's achievable. Yes, it's much larger scale and yes, it's a big risk, but if we don't take the risk, who will? Someone's got to. You know, we've got to demonstrate that you can do it better.
Adam: Did you outsource all the design and the architecture and the building or do you actually have people in house to make sure that it's very...
Natasha: Well, for us it was very important that we partnered, so everyone that we're working with on this development, we're treating in a partnership role, and that's incredibly important. Paint Addicts, in Queensland is, you know, it's the first time we've used them to do any kind of building work. They had been an amazing partner. Instead of thinking in terms of traditional aged care design, which is normally what they do, they have allowed us to lead them into what it is that we want. And you know, the product that they're delivering is pretty amazing.
Andy: It sounds like you've fantastic work behind the scenes, and like many businesses, your typical and – did you call them guests, or...
Andy: Residents. Your typical resident won't see a lot of that.
Andy: And certainly, as we've sort of alluded before, the aged care industry had a model that was very the same, I think back for my grandfather and as he was getting older, his wish was, "I don't want to end up in an aged care home. I don't want to end up in an aged care home." In terms of potential residents, that's not necessarily an issue for you, there's more people and we're all living longer, and getting older. But how do you sort of, without wishing to be crass, sell a product that people don't necessarily want to do? Have you, when they have a perception of what you are, as opposed to what you actually are, how have you got around that challenge, and because it's quite a sensitive thing, right?
Natasha: Absolutely. One of the things that we've been able to do well, I think, is our residents want to tell people how good it is, and our families do as well. And so the pilot project in Tasmania, with the two houses, which is no longer a pilot, it's actually, you know, will continue to operate. The residents that came into those houses, the changes that we saw in them were almost immediate. Within 24 hours of them moving into the house, we saw changes in behaviour, we saw changes in sleep patterns, we saw changes in their appetite, all of those sorts of things. People who were previously not wanted, if you like, in a particular aged care environment, unless they're in a locked unit, all of a sudden were able to come and go freely. And they didn't try and leave the centre because they weren't being locked up, and so therefore they knew that they could come and go as they pleased.
So when you have those sorts of stories, people want to tell. And we have a lot of people that are willing to stand up and talk about what's happened to mom, or dad, and how great the care has been or how great the relationship is. And we also have families that don't leave. Their parent might actually pass, but they keep coming back to volunteer and support us.
Andy: That's great. How do you leverage those sort of, I know what, certainly if I go to certain parts of our office, or certain products advocates that [inaudible 00:17:58] Snapchat this, and Face-Twitter that, and all that other ... I imagine, you're residents aren't huge on things like Snapchat. But how do you amplify those stories?
Natasha: So we can support them – we do stories of Facebook page, we have our own Facebook page. You know, LinkedIn, we do advertorials and editorials and we bring newspapers in and things like that, when there's a really amazing story about one of our residents, or something that's happening at that community.
Adam: Something you mentioned quite early on was, obviously, accreditation, and this kind of space has to be very heavily regulated. What kind of challenges does that really present for you on the ground, and are there things that you think the government could really be doing better to help facilitate you as a business owner?
Natasha: Yeah, one of the things they could do is actually fund us, instead of continuing to take away our funding. But you know, going past that, the fact that they've opened up so that residents do and can have choice, and that we can provide additional services where residents who can pay, are able to pay. Those things weren't available previously. So maintaining that and continuing to do that is great, but there also have to be protections in place for people who can't afford to pay. And you know, they should still be able to get the same level of services, or great care, without having to pay for it. And the government should do its part, if you like, in looking after those people that can't pay.
Adam: So how do residents actually pay? Is it similar to rent?
Natasha: They pay a daily fee – that's set by the government, and then, as I said, if they're able to afford it, they can pay additional services for other thing like being a member of gym, or having outings and doing certain thing. But on top of that, we get funded from the government depending on the care needs of the resident, and then the resident is also means tested. So their assets and income that they earn is actually taken into account and reduced off the funding that's provided.
Adam: Okay, so you're not actually selling rooms or properties as a traditional village might sell a unit?
Natasha: No, no. It's very much around what the care is, you know, what the needs of that resident are and what services they require.
Adam: All right. What's been the biggest challenge over all, would you say?
Natasha: You know, funnily enough, it's not accreditation, and it's not government, and it's not all of those sorts of things that most people would think it is. It has been, more often than not, as I said, the staff. Not receiving the kind of support that you would think, from your industry, to actually have the support to go out there and do it. So that's been a challenge. There are some people in our industry. Who are incredibly supportive but many others, as I said, that would rather we don't do this because it demonstrates that it can be done, and therefor says that we do need to make changes as an industry and not continue to operate the way we've always operated.
Adam: You're obviously very much a champion of letting residents control their own lives.
Natasha: Yeah, absolutely. I mean, one of the things that happens when someone comes in to care, and families don't always mean to do this, but they take things away. So they take a person’s independence away without realising it. And in aged care we use to say the same thing, "You cross the door, and we take away your independence." And what we're trying to do it give that back. So if you can still make a cup of tea, we will support you to do that, rather than take it away from you and make it for you.
Adam: It's the ultimate customer-first approach, and I think that it's got so many applications across basically every industry that there is, of taking that approach, and then thinking, your customers aren't sitting ducks, you don't need to sit there and patronise and dictate what they can and can't do.
Adam: Work with them, and let them work with you, to help them.
Natasha: Yeah and also, you know, that relationship and that trust for a family to know that mum or dad, whoever that family member is, is actually in a safe environment, and they don't, you know, they can continue to do those things because somebody else is watching it and they're making sure that they're not going to come to harm. But they can still do the things that they're able to do.
So for us, like I said, it's about being an individual. I'm very big personally on, you know, we all are individuals, we all have our own wants and needs, and I think it's incredibly important that we treat people that way and do that with respect and empathy.
Adam: Interesting stuff. Thanks, Natasha. Anything to add, Andy?
Andy: Well, look, I just wondered, and it always interests, the stories behind people such as yourselves and how you've gone particularly, as you know, we've spoke about disruption earlier and I mentioned it, how you've gone from something that seems very set in its ways and as you said, there an attitude of "This is how it is. This is how it'll always be done." You've obviously moved to that.
For our other listeners out there, who might be in an industry or an area of business that also has been around for a while and is very traditional and they're trying to do something different, I just wondered what sort of advice you might give them? What learning you've taken from your journey that you could impart on them that, I suppose what helped you through that from where you were, and where the industry was, to where you are now?
Natasha: I mean, I've always believed that if you don't back yourself, then you can't expect anybody else to. So that's been one of my mantras, I suppose, if you like. And I think it's really important that if you're going to do something like that then explore it. Do the research, understand what it is that you're going to do, but do it. At some point you've got to take the lead or you'll just continue to be a follower.
Adam: Very interesting. Thanks so much for you time, Natasha. It's been really fascinating talking to you. Some great insights there.
Natasha: Great, thank you very much.
Adam: So where can people actually find out about you?
Natasha: So our website, which is just www.synovumcare.com is, all of the information's on the website, we've got some drone footage of the actual development that is happening now, so people can see how different it is from a traditional environment. And we've also got a video of our residents living in the houses in Tasmania. And one thing to remember is that when you watch that video, the majority of those residents are living with severe dementia, and yet you would not realise that just by watching them.
Andy: I'm sorry, what was the website again?
Natasha: It's synovumcare.com.au.
Andy: And if I had to test you on how to spell that, because I couldn't spell it, how would I type it in?
Natasha: It’s Synovum Care, S-Y-N-O-V-U-M Care, C-A-R-E.
Andy: Dot com, dot AU?
Natasha: That's it.
Andy: Fantastic. Thanks, Natasha.
Natasha: Thank you.