Positive future for complex care providers

Despite ‘challenging headwinds’, the future for complex care providers remains positive, according to sector leaders.

Speaking at the Healthcare Summit, held in London last week, a panel of major players discussed the current outlook, and all agreed that while there were ongoing, and potentially-new, pressures facing complex care, the sector was healthy and playing a key role in health and care delivery.

Chaired by KP Doyle, chairman of Hesley Group, Healthshare, and EvoDental, the panel also included Tony Romero, chief executive of Cygnet; Andrea Kinkade, chief executive of Lifeways; and Tim Davies, chief executive of ivolve Group.

Davies said: “With increases in the living wage, local authorities going bust, and a lack of funding – and coming down the line, the Employment Rights Bill and Fair Pay Agreement – there is some level of uncertainty, but the fact we are still going shows the resilience of the sector and we feel quite positive.”

Kinkade added: “Complex care always faces a number of challenges.

“The key is to run an efficient, effective, and agile shop so when new things come along you can adapt and find a way.”

Romero said larger operators such as Cygnet were embarking on M&A activity, a sign that the market remains attractive to investors and developers.

He added: “The sector has seen everything good and bad and has survived all the waves.

“One common theme is the need to look after individuals who cannot look after themselves, and that has to be at the forefront.

The key is to run an efficient, effective, and agile shop so when new things come along you can adapt and find a way

“Demographics are in our favour, too, and there will always be a need for the services we offer.

“As a provider we remain positive and we are continuing with M&A activity.”

When looking to buy a business, or merge with an existing operator, he said they look at efficiency.

“We look at both small and larger companies. If they are small, they just have to be smarter,” he said.

“The power of organisations like ours, with 15,000 people, is someone will always know the answer, but smaller providers still do a good job and there is lots of talent in the UK.

“When we are looking at M&A, we spend time with management teams and ask ‘can we live with each other’?”

Kinkade added: “Investors look at EBIDTA and whether companies have invested in their buildings, staff training, and processes.

Property maintenance capital is not often involved in M&A as strongly as possible, but any business which does not invest in maintenance and capital will not be investing in its people or processes either

“You have to have synergy, and the investor needs to understand that you can deliver EBITDA, but only if the main driver is quality.”

Property maintenance and investment in digital systems are also key to enhancing complex care businesses, the speakers said.

Doyle told delegates: “Property maintenance capital is not often involved in M&A as strongly as possible, but any business which does not invest in maintenance and capital will not be investing in its people or processes either.

“It is no longer acceptable that companies just digitise payroll systems. Full system integration is at the forefront of M&A activity.

“We need systems that talk to each other.”

Davies added: “Most of the change in technology in complex care has happened in the last five years and we are seeing more-robust data and a lot of conversations going forward about how we embed technology at scale.”

In conclusion, Kinkade said: “The Government has recently revealed its 10-Year Health Plan, but since 2012 we have been trying to move people out of inappropriate places.

“Despite this there are still 2,000 people in inappropriate settings and we need more people to understand the complexity of care we can deliver in the community as we are doing it already.

“There is so much we can contribute to help these individuals live the lives they want to live.

“People think we are the third wheel behind the NHS and social care, but the sooner we can get people to understand the real benefits, the better.”