Status-quo, easy and routine are not approaches Mel Argent of Rockpool is familiar with. She is familiar with innovation, building a provider business from scratch, twice. With a craving for hot chips and appreciating ‘Islands in the stream’ both surprisingly turned out to be key operational markers in the business development.
Argent is the CEO of Rockpool, a for-profit provider that attracted an offer from Regis of $225,000 per bed. They had done something very right in the market. Now, Argent and her team are doing it again. They want to bring 700 net new beds to Australia’s aged care market.
However, Rockpool 2.0, and the journey so far, has not been straightforward. It has been a series of temperature checks on attitudes and processes that are not fit for purpose. The sector profoundly needs profit, “good” people, and a leg-up in efficiencies, without more walls to clamber over.
For-profit aged care
There’s a conversation to be had here. The elephant in the room of ‘profit is bad’ has long since stomped. Donning her hat of experience and sugar-cane of proof, Argent enters in.
“Why is profit so offensive?”
By the government’s own figures, the percentage of the sector continuing to make a loss hovers around 60%. For sector leaders, this is grievously unsustainable.
We have to set up a sustainable industry”, Argent endorses. That means uplifting the beneficial market forces for-profit strategy can bring. “We need to be recruiting good people, the best people”, Argent shares. “You need to make profits so you can afford to innovate, take risks, and pay and recruit brilliant team members.
“You’re not doing good things for the sector if you’re not building a sustainable business. Full stop. No other industry can operate like aged care has”.
Aged care profit reinvestment
“At the core of everything, it is constantly about doing better and doing it differently”.
Devoid of lip-service, Argent and Rockpool have prominently shown this in building up Rockpool 1.0, its sale price and what’s next.
Rockpool 1.0’s for-profit status allowed for difference. Central to that difference was the risk and stretch of innovation.
“[Early years] I was fairly quiet…I wanted to prove what was possible. We just ran our own race in doing that”.
That race concluded with one of Australia’s largest providers saying ‘yes please’ at $135 million.
Now, “we’re so desperate to get these new builds [700 beds] on the ground”.
In pushing against the trope of ‘for-profit is bad’, Argent is transparent about the courage and pluck it has taken, and continues to take, to see this new build through.
“We’re about to hit peak debt, we’ve got 3/4 built buildings, we want to bring these 700 beds on the ground, we say to the government, to the system, ‘please help us in this’”.
Providers bringing new beds to market through reinvesting profit, without tax-payer funds, is a rare feat in the current market. Their plea is for the system to work with, and not against, their ambitions.
Aged care red tape
Eyeing unnecessary walls to clamber over, or as Argent puts it, “absolute pearlers”, there’s none so simple and blatant as their registration process.
A year on into their Rockpool 2.0 journey, and after a hundred-million-dollar sale, “we’re still not a registered provider, officially”.
“We need to move past sitting here saying, ‘you’ve got this wrong, and that’s wrong’, it’s now actually about saying, ‘ok so we all agree this is wrong, this part of the legislation is wrong, here’s how we can fix it’”.
That does involve legislative change. We’ve finally gotten government acknowledgement that what they’ve done with registered provider application is not good”, Argent shares.” They’ve agreed and said ‘we’ve made an error here’. That’s good, now we move on. But leaders have to speak up, if we didn’t speak up about our registration, then in the industry, you wouldn’t have known it. We are the first to go through it, so we had an opportunity to speak up for those coming after us.
For-profit insight – care minutes
With any simmering for-profit and not-for-profit contention, Argent encourages a wider scope. For-profit has the means to push innovation and take risks. By its nature it must operate within the margins of efficiency and sustainability.
It’s afforded leaders in the aged care field the opportunity to call out where efficiency has fled that field.
Argent speaks what has long filled conferences and hallways, “Ok, let’s have care minutes, but let’s be sensible about how we count them.”
“And does one size really fit all for the entire industry?”
The maths has long prickled leaders, “if you want a 5-star rating, you’re probably sending yourself broke by the measurements.”
“So really, what impact have they had?”
Argent assesses that the additional compliance has cost more, with no impact on ubiquitously lifting resident care standards. The indicators are skewed.
With care minutes, quantity does not mean quality, and to not count allied health and lifestyle and only counting such a small percentage of our enrolled nurses who have been a backbone of this industry is absurd, you cannot believe that that is considered ok.
Legislation has stifled innovation, “it doesn’t make a difference financially to innovate because you still have to have [only] your [RN] people doing [only] care minutes to meet your care minute compliance.”
Aged care market entrants
As the first to face the “registered provider status application”, Argent and team have felt each brick of walls unnecessarily built up.
She shares sentiment widely felt, “if [government] systems and processes weren’t set up and fit for purpose, then the legislation shouldn’t have changed [in November].
Argent and Rockpool 2.0 have had the unique experience of starting from scratch with a wealth of knowledge. They have found it “resource-intensive”. Argent wonders how much of a turn-off the system is to the new entrants aged care desperately needs.
“Services Australia forms, they can take up to 2 to 3 months to confirm that a resident has the means to pay a RAD.”
“You cannot run a business waiting for a form for 3 months and a resident to pay a RAD.”
Leadership – the fuel of the team
“The sentiment that everybody’s out to do the wrong thing”, must be retired, Argent shares.
Far from the one brush of ‘greedy’ and ‘profit-hungry’, Rockpool’s ‘windfall’ is literally paving the way for 700 new beds in a tough construction environment.
“I draw a lot on the belief in what we are doing. It really is exciting, powerful and changing the face of aged care.”
For-profit is not faceless, “[The team] they are just the best bunch of individuals, and how we pop each other up and just their belief in what we’re doing is brilliant.”
Rockpool’s aged care profit reinvestment is channelling to Argent’s other laser focus, people. “I’m also really big about attracting people into the sector who bring a diverse skill set, and certainly in our rock pool team that’s what we’ve put a lot of emphasis on.”
For Argent, profit is progress, people and pushing for better.
Aged care must thrive, and so must its leaders, CEOs need incredible teams around them, you need to have an absolutely progressive mindset, you have to keep challenging the status quo.
The ‘what I want’ test
“[Leaders] you have to have a lot of stamina and guts, there’s no other way, we don’t want the same aged care as 15 years ago, we want vibrancy, we want the sort of life that we choose for ourselves”.
In gregarious good humour, Argent shares a north star for Rockpool 2.0, what she wants for herself. “I want great food, and I want it where and when I want it”.
“I want to be able to take risks without every five minutes filling in a consent form. I want to stop being surveyed. I will know as a resident where I can give feedback and when, and I know that it will be acted upon.”
“I want an educated team of professionals looking after me. I want the home to feel like one, vibrant. And I want to have a dignified death, which is very challenging”.
Argent is refreshingly candid, “and God forbid, have a bit of fun along the way”.
“That’s what worries me, that we’re taking away from our residents’ day what is important to them. Most of the time it’s just some vibrancy missing, it’s companionship, it’s living. That is not the stuff that we’re measuring in indicators.”
“If I’m craving them, I want hot chips and sausage rolls, and party-pies, so I can watch the footy as it should be watched”.
“At 90, if I feel like dancing, I want to put on Islands in the Stream any time I’d like”.
