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Home care market analysis 2019: Who’s new?

Home care market analysis 2019: Who’s new?

Despite the slower growth, home care packages are still a highly competitive market, and in an environment of tightening margins, high quality care and a positive customer experience remain paramount to staying competitive.

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Home carer wallking with patient in the garden

KPMG’s 2017 analysis of the home care package market showed a fast changing environment, with new entrants making up over a third of all providers in key locations.

In 2019, we researched the same locations to see how the home care package market is continuing to change following the introduction of the Increasing Choice in Home Care reforms in 2017. We also analysed changes in government funding for Australia’s largest home care package providers to get a better picture of the national home care market.

Key findings

  • While growth is continuing, 2017’s explosive rate of growth in new providers has slowed. 
  • 14 percent of new providers are new to the delivery of home care packages.
  • As with 2017, the new entrants are predominantly for-profit providers.
  • New providers are targeting the home care package market, with a sizeable proportion also targeting services in the home for people living with a disability.

Insights and actions for leaders

  • High quality care and a positive customer experience remain paramount to staying competitive.
  • Although analysis of funding data published by the Australian Government indicates many providers have seen significant uplift, this does not necessarily reflect profitability, which is the key to success in the home care package market. 
  • Rapid growth can also bring risks, and there is ongoing need to manage overheads and expenses, invoicing, package management, workforce efficiency and consumer retention.

Where are the new entrants?

In the major metropolitan regions of New South Wales, Victoria, Queensland, Western Australia and South Australia, new entrants represented between 10 percent and 23 percent of the market.

The significant growth of new entrants in key locations such as Double Bay, Caboolture and Mornington that was identified by our 2017 research has slowed.

Other markets with relatively smaller populations of older people such as Canberra and Darwin are now seeing increased competition.

New home care providers Australia map

Read the Home care market analysis 2019 (PDF 2.5MB) for further insights on the locations of new and existing home care providers.

What are the characteristics of new providers?

  • 79 percent were for profit businesses (up from 68 percent in 2017).
  • Only 38 percent were providing other types of home care, retirement living or residential care prior to entering home care package market (down from 69 percent in 2017).
  • 48 percent were also targeting the disability sector (up from 40 percent in 2017).
  • A small number were working with culturally and linguistically diverse communities (similar to 2017).
  • Several were labour hire agencies that have expanded into direct service provision (similar to 2017).
  • 85 percent were targeting only one jurisdiction at present - down from 90 percent in 2017.

 

Download the report for more detailed analysis of the top 20 providers.

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