ABC of Unit Costing in Community Care
•Download as PPTX, PDF•
0 likes•99 views
This document provides information on unit costing in community care. It begins with learning outcomes, which include describing the differences between direct and indirect costs and the steps to develop unit costs. It then discusses why organizations need to understand unit costs, particularly with the introduction of individualized funding models. The document outlines the costing process, including defining different cost types. It includes activities for attendees to practice defining the service being costed and calculating a unit cost. Finally, it discusses using unit costs to consider strategic questions about price, quality and viability under different funding models like the NDIS.
Recommended
More Related Content
What's hot
What's hot (20)
Similar to ABC of Unit Costing in Community Care
Similar to ABC of Unit Costing in Community Care (20)
More from Carrie Hayter
More from Carrie Hayter (20)
Recently uploaded
Recently uploaded (20)
ABC of Unit Costing in Community Care
- 1. ABC of Unit Costing in Community Care 31 March 2021 1 Inner West Area Training Service 31 March 2021 Nothing about me without me www.carriehayter.com
- 2. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 2 Image credit – David Foster downloaded from https://www.australiangeographic.com.au/topics/history-culture/2016/04/speaking-up-australian- aboriginal-languages/
- 3. Carrie Hayter Consulting 31 March 2021 3 Nothing about me without me www.carriehayter.com Empowering older people and people with disability to have a great life
- 4. ACTIVITY 1 31 March 2021 4 ABC of Unit Costing in Community Care © Carrie Hayter Consulting
- 5. Learning Outcomes By the end of workshop participants will: • Describe why they need to understand the Unit Costs of their service; • Describe the differences between direct and indirect costs; • Describe the steps in developing unit costs for services or programs; • Apply practical tools to support your service in developing unit costs; and • Network with colleagues. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 5
- 6. Why Unit Costing? Passive Clients Participants or ‘consumers’ Block funding Individualised funding, Activity Based Funding Monopoly Providers ‘Market of Care’ 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 6
- 7. My Aged Care 65+ years Regional Assessment Service Aged Care Assessment Team Respite, personal care, transport, allied health, podiatry, food services, in home support Commonwealth Home Support Program Assistance with Care and Housing Home Care Packages Levels (1-4) Residential Care Program Residential Respite Subsidy for 63(+) days per financial year in RACF Permanent residential care Personal budget Co-ordinated package of services (including respite excluding resi) Service Development Carer Gateway, Carer Respite Centres Emergency Short Term Respite Consumer Directed Respite Care Packages (Personal Budget for any respite, including resi) Carer info and education ABC of Unit Costing in Community Care © Carrie Hayter Consulting
- 8. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 8
- 9. National Disability Insurance Scheme – Issues for Providers • Price differentials – Differences between actual costs and the price funded by the NDIA • Cash flow – Fee for service model • Understanding management on-costs – Streamlining • Strategic questions – What will our organisation register for? 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 9
- 10. 10
- 11. Key Messages 1. The costs for each agency are different 2. The costing process is unlikely to predict exact costs. It needs to be reviewed. 3. Costing involves understanding of the expected activity level. 4. Costing requires oversight and engagement of staff, boards and governing bodies. 5. State your assumptions of the costing framework (Source: NDIS, 2014, pg 6) 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 11
- 12. The Costing Process Item Definition Direct Costs Cost that can be linked or traced to providing a service Indirect Cost Costs that cannot be directly linked or traced to providing a particular service. Indirect costs can be classified into overhead costs, commonly shared costs and service-specific indirect costs Fixed Costs Stable costs in delivering services which do not vary based on client numbers or activity. Variable Costs Costs that are directly linked to the client and activity levels and are fully variable as client activity/demand changes 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 12
- 13. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 13 Direct Costs (Costs directly linked or traced to providing a service) Fixed Cost (Stable costs in delivering services that do not vary based on client numbers) Variable Cost (Costs that are variable as client activity/dema nd changes) What information could you need to cost this item?
- 14. Direct and Indirect Costs Direct • Service delivery personnel • Travel and transport • Accommodation Service expenses • Consumables nursing, paramedic, food, uniforms (CHSP), Protective Equipment • Gardening equipment Indirect • Travel expenses ( getting to a consumer’s home) • Service Management • Accommodation – Rent, rates and charges, utilities • Organisation overheads or corporate expenses 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 14
- 15. Defining the limits of the service or services being costed • What is the sponsoring organisation? • How many services does it sponsor? • Is the service being looked at discrete? In other words, is the budget self-contained? • How many service components are there to the service? – What are they? – Who provides them? ie does it contain elements of other services from within the parent organisation? 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 15
- 16. Apportioning Costs • In developing a Unit Costing model across an organisation, apportioning costs using an appropriate method needs to be considered. – payroll costs, – water, – electricity, – general insurance – Service management 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 16
- 17. ACTIVITY 3 – What service is being costed? 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 17
- 18. Activity 3 – What service is being costed? 1. What is the sponsoring organisation? 2. How many services does it sponsor? 3. Is the service being looked at discrete? In other words, is the budget self- contained? 4. How many service components are there to the service? • What are they? • Who provides them? ie does it contain elements of other services from within the parent organisation? 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 18
- 19. A quick double check Is the service viewed and managed as a distinct service by the organisation, management, staff and community? Is it identified by both you and the community as a distinct service? Are its operations and clients mainly discreet from the other service entities? Does it have its own field staff who generally do not work in other programs? Is it physically separate from other services and/or has a distinct geographic catchment? Does it have its own financial records and costs, not mixed with other services or operations (apart from shared senior management and premises costs?) Can the funding sources be identified, apart from any cash or contribution in kind from the sponsoring organisation? 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 19
- 20. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 20 Unit Cost Equation Total Cost of Service ( Sum of all Direct and Indirect Costs including overheads) Total Units of Services (eg hours, meals, trips) Relatively minor changes in the estimate of services provided can have a significant impact on the unit cost
- 21. ACTIVITY 4 – Unit Costing Activity 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 21
- 22. Price and Viability – Strategic Questions • Relationship between price and quality. – What scope do we have to charge above the unit cost? • What does our unit cost mean for working in the NDIS? – If our price is higher than the NDIS price, how do we remain viable? • Relationship between price and volume – If we support more people will our model be viable? • Involving accounting, finance and social care professionals in reviewing costs 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 22
- 23. Software Vendors & Tools • What does your organisation need? – Speak to people using the system – Know your business requirements and rules – Software vendors • Xero, Calxa, Cerbiz, Spotlight Reporting, Fathom, Adaptive Insights from ABM Systems, proDacapo from ABM Systems http://www.adhc.nsw.gov.au/sp/sector_reform/financial_management/costing-your- services 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 23
- 24. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 24 Outcomes for People • How can we integrate unit costs with outcomes for people? • How do we know we are meeting the outcomes for the people we support?
- 25. 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 25
- 26. Summary Key Themes • What is being costed? • Direct and indirect costs • Business rules and assumptions • Engage staff, board and managers 31 March 2021 ABC of Unit Costing in Community Care © Carrie Hayter Consulting 26
- 27. More Information www.carriehayter.com Please fill out a course evaluation Start a conversation @carriehayter 27 Nothing about me without me www.carriehayter.com
Editor's Notes
- Acknowledge the traditional owners of the land
- I am the Managing Director of Carrie Hayter Consulting that works will all actors in the social care system to put people at the centre of their supports and funding. We do this through our research, evaluation, education programs, public speaking and writing.
- There are significant changes happening in the policy landscape in age care and disability policy in Australia as part of the agenda of personalisation. The assumptions that underpin these shifts include the changing role of people who use public services shifting from being ‘passive’ clients to ‘active consumers’. It is assumed that people who use disability services or aged care services will become active ‘consumers’. Rather than being passive clients relying on professionals for support and advice people are assumed to be active engaged ‘consumers’ who will make informed choices about their care. Flowing from this assumption is the need for changes in the how agencies are funded from block funded to individually funded. It is assumed that individualised funding will provide more mechanisms for service users to get their needs met. We are seeing this funding system emerging as part of the launch sites of the NDIS as well as the emergence of the concept of ‘consumer directed care’ in packaged care in aged care in Australia. As part of this changing landscape there are significant challenges for small, medium to large organisations in being able to thrive and survive in this changing landscape? As well as considering the structures that are in place to enable the participation and engagement of service users in your service. Underpinning these changes are competing tensions between human rights of people on the one hand and economic positioning and arguments about the costs of ageing.
- Emphasise the key themes Encourage people to download the readings for more case studies and practice ideas
- Promote my workshops.