Ep. 2: Better Care Within the Funding We Have

Alex — AI host

Welcome to The Care Economy Conversation. I'm Alex, and I'll be plain about this from the start: I'm an AI voice. I'm a synthetic presenter, not a clinician, not an executive, and not an interview guest. I have no personal experience of running a care service, and no memories from a facility floor.

Eric Marquette

And I'm Eric, also a synthetic AI voice, with the same limits. This is an editorial conversation, and the examples are illustrative. This is episode two of three. Dmitry Shibanov is involved in developing SMPLS LABS and KnowingMe. Within the Collective, these are examples of systems co-designed with providers and the people who use them. Our purpose is to exchange ideas and work together on a better care economy for Australia. Everyone is welcome to bring their own products, practical experience and ideas for us to explore together. Participation is free and does not require buying anything. Contributors keep their existing intellectual property, and confidential material should only be shared under agreed protections. The Care Economy Collective has not yet demonstrated savings or clinical outcomes for any provider.

Alex — AI host

Last episode we ended on a trade off. Protecting time for follow through has a real cost, and we said we couldn't promise it pays for itself. This episode is about how you would find out honestly. The title is Better Care Within the Funding We Have, and I want to start with a synthetic scene.

Alex — AI host

Imagine a leadership meeting. A project report says a change to documentation has freed up 416 hours a year. A board member leans in and asks a perfectly reasonable question: so where does that show up in the budget? And the room goes quiet, because everyone knows the rostered hours didn't change. The report was true. The question was fair. They were just about two different things.

Eric Marquette

That quiet is the whole episode. Care leaders often use one word, savings, for four different things, and the confusion can push decisions in the wrong direction. So let's pull them apart. First, cash savings. That's a real reduction in money going out the door. Less agency spend, lower overtime payroll, a cancelled contract. You can point to the line in the ledger where it dropped.

Alex — AI host

Second, released capacity. That's staff minutes or hours that no longer get used on a task. It's real, and it might be valuable, but it is potential working time. It's not money in the bank. Third, care experience. How it feels for residents, families and workers when care is unhurried, attentive and respectful. That's qualitative, and it matters in its own right, but it doesn't convert into a dollar figure just because we'd like it to.

Eric Marquette

And fourth, unmet need. The tasks that were deferred, compressed or missed because time ran out. The conversation that got cut short, the extra walk that didn't happen, the follow up call that slipped. The uncomfortable point about unmet need is that when you release capacity, it may be the first thing that capacity gets spent on. Which is arguably a good outcome for care. But it also means the capacity is spoken for, so it can't also be a cash saving.

Alex — AI host

Let's do the first calculation, and I'll flag that it is synthetic. These are not figures from any provider. Suppose a team deals with 80 issues a week, and for each one there are six minutes of duplicate work. The same detail written into a second system, or re-keyed on another form, or reported again to someone who already has it. Eric, walk the arithmetic.

Eric Marquette

Eighty issues times six minutes is 480 minutes a week. That's eight hours. Across a 52 week year, eight hours a week is 416 hours. And if we apply an illustrative loaded rate of 55 dollars an hour, 416 hours is 22,880 dollars. That is the capacity value in our synthetic example.

Alex — AI host

Now the sentence I want to say loudly. That 22,880 dollars is not cash saved. It's the value of time that could be used differently. Payroll hasn't moved. Nobody was paid less. Unless a shift is actually cancelled, or agency hours are actually reduced, the same wages go out the door the following fortnight.

Eric Marquette

Which is why I'd say it twice. Not cash saved. If staff are paid the same and the eight hours a week goes into something else, then the money has been spent, just on something different. That something might be time with residents, or a task that was previously missed. In that case the honest label is released capacity, redirected to care. That's a legitimate outcome. It just isn't a budget surplus.

Alex — AI host

There's an objection I'd expect here. Someone says: it's still worth 22,880 dollars, so why does the label matter? I think the label matters because of what happens next. If a report calls it savings, someone may build it into next year's budget as money that's already been found. Then the budget is short by that amount, and the shortfall lands on rosters, on the people doing the work.

Eric Marquette

And the reverse objection is just as fair. Someone says: so capacity is worthless? No. Eight hours a week of avoided duplication could matter enormously if the team is stretched and unmet need is piling up. We simply have to name it correctly, and decide on purpose where it goes. Back to cash, you'd need a decision that actually takes hours or contractor spend out, plus evidence that care didn't suffer. Otherwise, call it capacity and track what it was used for.

Alex — AI host

One more caution about the number itself. It rests on a count of issues and a duration per issue. In real life, six minutes is an estimate, and the people doing the work should check it. A count of 80 could be a poor proxy for the actual burden. The arithmetic is simple. The inputs are where the uncertainty lives.

Eric Marquette

Now the second synthetic example, which is a technology business case. A provider considers a care coordination tool. Upfront implementation and training cost is 40,000 dollars. Annual running costs, operating and licensing, are 18,000 dollars. And suppose there's an evidenced annual cash benefit of 24,000 dollars. Again, this is illustrative, not a real vendor or a real provider.

Alex — AI host

The word evidenced is doing real work there, so keep it in mind. Taking the numbers as given: 24,000 minus 18,000 leaves a net of 6,000 dollars a year. Divide the 40,000 upfront by 6,000 and you get a simple, undiscounted payback of about 6.67 years. And over a three year horizon, the cumulative net cash position is minus 40,000 plus three times 6,000, which is minus 22,000. Negative 22,000 dollars after three years.

Eric Marquette

Notice how that differs from how a headline might sound. A 24,000 dollar annual benefit sounds attractive. But the net is a quarter of that, and the payback is nearly seven years. That doesn't automatically mean the investment is wrong. Care experience could improve, risk could fall, workers could find the work more manageable. But if the case is built on cash alone, this one is thin.

Alex — AI host

So let's talk about the limits of simple payback, because it's a tempting number to quote. First, it ignores the time value of money. A dollar this year is worth more than a dollar in year six, and a provider's cost of capital matters. Second, it hides timing and liquidity. Being negative 22,000 dollars at year three means that cash has to be funded from somewhere, and for a small provider that may be the real constraint.

Eric Marquette

Third, it assumes the benefit holds steady for nearly seven years. Real benefits can fade. Staff turnover resets training, processes drift, the tool gets used less carefully, or the vendor changes pricing. Fourth, a single payback number says nothing about risk before breakeven. A lot can change in six years in a sector that's reforming as fast as this one. So simple payback is a first screen, not a decision.

Alex — AI host

The second half of the problem is what goes into the cost column. Our example said 40,000 upfront and 18,000 a year, but a full cost view asks what might be missing. I'll list seven things to check. One, training, including refreshers, not only the first session. Two, backfill, meaning paying someone to cover direct care shifts while permanent staff are in training.

Eric Marquette

Three, integration. Connecting a new tool to your care management system or other software, and the infrastructure underneath it. Four, subscriptions, including whether pricing changes as you add users or features. Five, support, both internal time and vendor help when things break. Six, governance. Privacy, clinical oversight and compliance checks, with someone responsible for them. And seven, monitoring and evaluation, because someone has to measure whether the benefit is real. That last one is easy to leave out, and it's what separates a claimed saving from an evidenced one.

Alex — AI host

And I'd add a question that sits across all seven. Whose time is it? If the cost is mostly staff hours, we're back to capacity rather than cash, and the same label discipline applies on the cost side. Some of these costs will be actual invoices, some will be absorbed time. A good business case separates the two and says which is which.

Eric Marquette

So what would it take to show an actual expense reduction? I'd say three tests. First, the line item has to drop. Not a forecast, not a modelled hour, but an actual figure. Overtime payments, agency hours rostered, an invoice. You compare a baseline period with a later period, and you account for things that changed for other reasons, like occupancy or the mix of people being supported.

Alex — AI host

Second, care must not be lost. That means looking at measures you already have, and the ones that matter to the people receiving care. Each residential aged care home has targets based on its residents' care needs. Those targets are based on a sector-wide average of 215 minutes of direct care per resident per day, including 44 minutes of registered nurse care. Check your home's current requirements. A reduction that leaves care needs or staffing obligations unmet is not a saving. In home care, check for missed or shortened visits and worsening feedback. Ask families and residents, not only the data.

Eric Marquette

Third, the workload must not simply move. This is the one I think gets missed most. Say charting gets pushed onto the night shift. Or a registered nurse ends up doing clerical intake that an administrator used to do. Or the work lands on family carers, who aren't on any payroll. In each case the expense line might drop while the burden hasn't gone anywhere. It's just moved to a place that's harder to see.

Alex — AI host

So a practical check is to ask who now does the task, when, and with what time. Ask staff across shifts and roles, and ask families where it's relevant. If hours fell in one place and quietly rose in another, you haven't saved money. You've shifted it, and perhaps shifted risk with it.

Eric Marquette

Now the funding picture, and I want to be careful. Australian aged care funding isn't one thing. The Aged Care Act 2024 started on 1 November 2025, and the Support at Home program replaced the Home Care Packages Program on the same date. Residential care has its own arrangements, including care minutes. Funding purposes and restrictions differ across programs and grants, and they change.

Alex — AI host

So we're not saying all funding carries a single restriction, and we're not saying any particular transfer between budgets is unlawful. We're also not making any eligibility or legal funding determination in this episode. What you can spend where must be checked against the current programme rules, such as the Support at Home program manual, and with your own advisers. A starting point for the official material is on the health dot gov dot au website, under our work, then aged care.

Eric Marquette

And one more honest statement. We can't assume the existing funding envelope is enough everywhere. Thin markets, regional and remote areas, and specialised services can face different cost pressures. The Department's own site describes a Thin Markets grant for rural, remote and specialised Support at Home services, which at least shows the difference is recognised. So when we talk about better care within the funding we have, we mean working honestly with what's there. We don't mean pretending it's always adequate, and we don't mean unmet need disappears if you tidy up your paperwork.

Alex — AI host

So here's the exercise. Take one service, and build a full cost scenario. Use the Service cost tool, at careeconomycollective dot org, slash tools, slash service, and then the word cost, with the two words joined in the web address. Put in everything: wages, on costs, supervision, overheads, the items we listed. Then challenge it. Which numbers are invoices, and which are absorbed time? Which are estimates, and who could verify them?

Eric Marquette

Then, if you're considering a technology change, use the Technology case tool at careeconomycollective dot org, slash tools, slash technology, then the word case, again joined in the address. Enter upfront costs, running costs and the cash benefit you can actually evidence, and look at the multi year picture, not just the headline. Try a version where the benefit fades, and one where integration costs more than planned. If the case only works in the best scenario, you've learned something important before spending anything.

Alex — AI host

Keep the four labels beside every number you enter. Cash saving. Released capacity. Care experience. Unmet need. If you can't say which one a figure belongs to, it isn't ready to go in a board paper.

Alex — AI host

Let's close with the limits. Our two calculations were synthetic. They show how to reason, not what any provider will find. The Collective has not demonstrated savings or outcomes for any provider. Products mentioned in this series are examples for shared learning, and everyone is welcome to contribute an alternative. Contributors keep their existing intellectual property. We are not giving legal, financial or funding eligibility advice. Check the current programme rules yourself.

Alex — AI host

The one thing to take away: 22,880 dollars of capacity value isn't 22,880 dollars of cash, and a 24,000 dollar benefit isn't a 24,000 dollar gain once the costs are counted. Name what you've freed, say where it went, and prove what you claim. Next time, in episode three, we design one bounded reporting experiment so you can test all of this in a small, safe way. Thanks for listening.