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Outsourcing Continues to be the Way Forward for Aged Care

Controversy over how the Department of Health is tackling the issues Aged Care faces continues this week, as further outsourcing projects with the aim to help improve the service have been revealed. The Australian Ageing Agenda (AAA) have discovered several projects now authorised by the Department of Health are currently in effect, which includes:

  • A $990,000 tender to Ernst & Young for an “Aged Care Funding Instrument Audit Consultancy’ to take place from the 12th January 2017 to the 30th June 2019.

  • A $205,084 tender to Applied Aged Care Solutions for “the provision of a review of the Aged Care Funding Agreement” to take place from 10th February 2017 and the 24th April 2017.

  • A $50,000 tender to Matthew Pegg Consulting for the “provision of legal services on Aged Care Funding Instrument policy development” to take place from the 30th January 2017 to June 2017.

Outsourcing earlier this year

This marks the fourth Aged Care analysis to be outsourced this year, with the first being awarded to Deloitte Access Economics, which were given a $366,700 tender to provide an “analysis of unmet demand and the potential implications of uncapping supply in aged care”.

While outsourcing can have its benefits, such as the ability to tap into new knowledge bases for greater innovation, many people are worried that the length of time required, as well as the large sums of money, could better be used in-house.

Department of Health remains confident

But the Department of Health is confident that these outsource projects will benefit and improve the Aged Care system. At a hearing on Wednesday, Dr Nick Hartland, first assistant secretary of the aged care policy and regulation defended the decision to outsource analyses, claiming they needed people who were “fresh to the system”.

“It was about getting different perspectives and a range of these studies are quite complex; they involve looking at the population surveys”.

Helen Polley, the Shadow Parliamentary Secretary for Aged Care, was also questioned on Wednesday. She stated that external firms were chosen to provide “expertise” that the department itself could not currently provide, as well as unique insights into various long-standing issues.

What is outsourcing?

Outsourcing is the process in which a company assigns various processes to an external agency rather than performing these processes themselves. This can be done by companies for a variety of reasons. For example, a company creating products for sale may wish to outsource its production to reduce labour costs involved.

But not all outsourcing involves physical labour. Some companies may wish to outsource to external firms to help drive innovation. A company may be looking to create a unique new product for its customers but are struggling with ideas. Outsourcing analyses to firms to help innovate may provide what they need to gain an edge over their competitors.

However, companies, such as governments, may wish to outsource analyses to attempt to provide new insights and answers to problems that the country may currently be facing.


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