Smart Practice 3 - Develop a purpose built model to manage the cost of care minute delivery

This is part of our Smart Practice series on funding and care minute management, focused on improving control, compliance and financial performance.

Mandatory direct care minutes were introduced to support better care outcomes for older Australians. But delivering those minutes sustainably requires a clear understanding of what they cost and how they are funded.

Exceeding targets may come from good intentions, but unless it’s financially sustainable, it becomes a risk rather than a strength.

When good intentions become operational issues

Some homes unintentionally deliver up to 15–20% above funded minute targets. When this happens, several issues emerge:

• Direct care labour costs escalate rapidly, especially when agency forms part of the surplus delivery

• Surplus minutes often fail to generate proportional care value when misaligned with actual resident acuity level

• Additional coordination workload arises, often requiring a full-time roster coordinator, a cost that does not count toward direct care minutes

  
  

On paper, 110%, 120% looks positive. In reality, it can become an uncontrolled cost sink.

How to manage the cost of care minute delivery effectively

Homes need three core components:

1. A unified funding–cost–delivery framework

A model that connects direct care funding, labour cost and care minute delivery, enabling coordinated, data-driven decisions.

2. Clear visibility of the key cost metrics

• Direct care labour cost per occupied bed day (benchmarked)

• Direct care labour cost vs budget

• Care minute fulfilment relative to cost

• Direct care funding income vs labour cost

  
  

3. Operational rules that guide action

Teams need clarity on how to act on data intelligence to realign cost, delivery rates and resident acuity needs.

The truth is simple: if homes don’t control labour costs, labour costs will control the home.