How do Australian aged care and residential living providers address the new entrants disrupting the traditional business models? The industry disruptors have arrived and are building traction. Delivering accommodation and care services that people value as they live through retirement is a significant opportunity for existing and new providers and investors. This presentation highlights steps boards and management teams can't take today to build sustainable business models and be ahead of the disruptors.

1. Survive, sustain or thrive?
Aged care breakfast briefing
Friday, 3 November 2017

2. Page 2
Sustain, survive or thrive?
Discussion points
The potential for disruption in the aged care
services sector in the next five years, and how
you can prepare
Talking points:
How to equip your business model for agility
and growth
Funding and finance options for consideration
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

3. Page 3
1. The potential for disruption in the aged care services
sector in the next five years
► $19.7b* industry - and growing
► Disruption is here already
► New service solutions are in the market targeting where the greatest dissatisfaction and/or margin opportunity
exists
► “Your margin is my opportunity”
Jeff Bezos, CEO, Amazon
► But, the difference in the value proposition between
in-home care and residential care still exists
► In-home care targets those seeking to retain or regain independence
► Residential aged care is for those that have transitioned to the
decline stage, either through cognitive or physical decline or a
terminal diagnosis
► However, the difference is beginning to blur. High touch services are not immune from
new entrants with innovative solutions
► Cant rely on regulation and capital as barriers to entry
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017
*Source: 2014-15 Aged Care Financing Authority Report (2016)

4. Page 4
1. … and how you can prepare
Independent
living
Assisted
living
Residential
care
Memory
care
Hospital Hospice
Notional journey
What customer
problem are you
solving for?
What customer
journey are you
helping?
disrupting?
Lived journey
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

5. Page 5
1. … and how you can prepare (contd.)
► Supply side
► Costs - provider productivity
► Payment system
► Demand side
► Navigating services and support
► Family decision making
► Family capacity and capability
to care
► Home to hospital
► Hospital to residential care
► Home to residential aged care
► Residential care to hospital
► Retirement living to residential care
What customer
problem are you
solving for?
What customer
journey are you
helping?
disrupting?
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

6. Page 6
2. How to equip your business model for agility
and growth
Know your
customer
► Aged care service
users are not a
homogeneous group
► Segment customers
beyond geography and
financial status
► Know their pain points
► Create compelling
stories and
experiences
► Measure everything
you do
► Understand pathways
into and through aged
care
► Identify services
valued highly by users
and families
► Design services that
solve residents’
problems
► Build design expertise
across functions
► Ensure residents are
part of the design
process
► Build change
management expertise
using agile methods
► Take small steps, fail
fast, learn, and adapt
► Track everything (that
is unknown or a critical
value driver) and know
what is working and
what isn't
► Competitors are
unprepared in-home
carers resulting in
elderly hospitalisations
► Build trust in the
community. The aged
care sector has to
acknowledge its Social
License
► Embrace innovators
and disrupters as part
of the solution.
Welcome the new
entrants. Can help
further develop the
aged care sector as a
great place to work, to
age and die
Data, data, data Design small,
simple solutions
Change
management
Collaborate
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

7. Page 7
2. How to equip your business model for agility
and growth - Know your customer
LifeCircle example insights
What we know
LifeCircle has a deep understanding of the specific need of the person who is caring for
someone who is dying.
We know that people who are caring for someone who is dying are:
Often uncertain and
unprepared
Often unable to
access the system for
help, as it is
fragmented and
difficul to navigate
Often unable to find
the support and the
stories of others who
have done this work,
who have had this
experience
Unlikely to identify
with the label of
‘carer’ – they see
themselves as the
wife, husband,
daughter or son
Often unaware that they
have taken up a formal
‘caring role’: this
happens organically,
through subtle changes
– it is not usually a
decision, or a specific
moment in time
Often unable to shift
their mindset from one
of hope and positivity,
caring for someone who
is living: to a position of
graceful acceptance,
that they are now caring
for someone who is
dying
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

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2. How to equip your business model for agility
and growth - Know your customer
231,500
permanent residents in
Australia in 2014–15*
*Source: Australian Institute of Health and Welfare (AIHW) 2015. Residential aged care and Home care 2013-14. Canberra: AIHW.
** Source: AIHW 2017 Admitted patient care 2015-2016
1 in 25 of these residents
(9,144) had an ACFI appraisal
indicating the need for
palliative care yet ~ 50,000
people died in aged care
Around one-quarter (23.2%) of
residents receiving palliative
care are diagnosed with
cancer
Between 2011–12 and 2015–16 hospital
separations for people 85+ rose an
average of 5.1% pa** compared with
the population growth for this age group
of about 3.9% each year
14%
32%
54%
Place of death
Deaths at home
Residential age care deaths
Hospital deaths
Hospitalisations are increasing significantly for older age groups.
In the decade to 2011-12 the hospitalisations rate for those aged
over 85 increased by:
35% 48%
for women for men
Journey disruption example - Disrupt the increasing rate of hospitalisation of
older people by developing hospice service
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

9. Page 9
3. Funding and finance options for
consideration
Funding
Increasing user
contributions to reduce
regulatory risk impact
Vertically integrated
services
Horizontally integrated
services
Industry collaborations Crowd funding
Added value services
Growth
Capital
Will removal of Government
Guarantee for RADS require
providers to maintain minimum [40%]
equity in the capital structure
Sources of equity
► Public markets/IPO
► Private markets
► Institutional investors –
aligning interests to
optimise value
Structuring
► OpCo/PropCo
► Partnerships
► Exclusive vs non-exclusive
► Services vs platforms
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017

10. Page 10
Contact
Sally Evans
sally.l.evans@me.com +61 4 1459 3257
Former Head of Retirement at AMP,
Chair at LifeCircle, Director at Opal Aged
Care and former member of the Aged Care
Finance Authority
Survive, sustain or thrive? Aged care breakfast briefingFriday, 3 November 2017