Domestic Assistance (DA) is the largest Support at Home service in the benchmarking data. It also generates a lower contribution margin than other Support at Home services, despite costing almost the same per workforce hour to deliver.
The reason comes back to economics. DA earns materially less per billable hour, while its hourly workforce cost stays similar. That leaves less room to absorb inefficient visit design, rostering, penalties, travel or unproductive workforce time.
For a CEO, knowing that DA made money is only the starting point. The questions that follow are what made it profitable, what is eroding that margin, and what happens to quality when you change it.
That is Economics of Care.
Twenty years ago, I couldn't see this
In the HACC era, one of my most important management measures was simple: did we deliver the contracted service hours we were funded to deliver?
Finance knew what we earned and spent. Payroll knew what we paid staff. Client systems knew who received care. Rostering knew when and where it happened. Each system told part of the story, and none could tell me how the whole business was performing.
So I did what many providers still do today and brought the pieces together in Microsoft Excel. Workbook after workbook followed, manual to maintain, difficult to drill into and increasingly hard for managers to trust and use.
Twenty years later, I still see inherited workbooks when clients come to KPI Insight. Increasingly, those same clients are asking me to connect their financial systems to their existing Microsoft Power BI operational models. The result is their own branded, live P&L with operational and quality data sitting behind it.
The P&L tells the CEO what happened. Economics of Care explains why.
So, how long should a DA visit be?
Visit duration is a good example. When I segmented DA by billable visit duration, the economics changed materially. Very short visits produced strong financial outcomes. Longer visits generally strengthened continuity, but their financial performance did not necessarily improve with them.
In this benchmarking cohort, DA visits of approximately 20 to 60 minutes produced a strong balance of financial sustainability and labour productivity while maintaining reasonable continuity of care.
The interesting part was why. Hourly workforce cost barely moved between the visit-duration cohorts, so the difference came from the economic value each workforce hour generated. One common longer-duration cohort produced a contribution margin around five percentage points lower than the 20 to 60 minute cohort, despite costing almost the same per workforce hour to deliver.
For a service delivered at DA's scale, that is material.
Understand the economics, protect the care
Member need determines the care delivered. The management opportunity is to understand why visits outside the economically stronger range look different.
Are visit durations still aligned with each member's current needs? Are recurring services designed consistently? Are rostering and travel consuming too much of the workforce day? Are penalties, broken shifts or minimum engagement eroding margin?
If service design improves, a CEO should see the story unfold through the data. First, visit-duration mix and workforce utilisation change. Then labour productivity, workforce optimisation and rostering efficiency should respond. Eventually, those improvements should reach contribution margin per care hour and overall DA margin.
Quality has to travel with it. Continuity Score, helpers per member, punctuality, uncovered cancellations, member turnover and helper turnover should be monitored alongside the economics. If margin improves while continuity deteriorates, the organisation has not necessarily improved its Economics of Care.
From reporting hours to understanding care economics
Twenty years ago, I could tell management whether we delivered the funded hours. Today I can ask:
Which service is less profitable, and why?
Which visit design produces the strongest economics?
What operational measure needs to change first?
Did financial sustainability improve without compromising continuity of care?
That is why Economics of Care is becoming need-to-know management information. Your P&L tells you whether Domestic Assistance made money. Economics of Care tells you what to change on Monday morning, and whether the change worked.
This view on your own numbers is what we're working on with Lookout, and more on how you can see it is coming in the next few weeks.
Corey Jackson is Director of KPI Insight and has spent 20 years working on the economics of Australia's community care sector.
