Competition among NFPs will be a byword this year and Silver Chain has been pruning its bureaucracy to get fit for the new world order. 

In a world where the consumer is increasingly shaping health delivery, Medical Forum interviewed the CEO of Silver Chain, Chris McGowan, before Christmas, to better understand how the organisation fits into this landscape.

For starters, this is a big organisation with an interstate reach, primarily funded by WA taxpayers ($179m 2015 annual report). In WA, Silver Chain’s reputation has been built around its hospice and palliative care service of 30 years’ standing. This and its ability to tackle the more difficult, expensive patients has drawn government attention to its ‘hospital at home’ services as a means of  providing savings while meeting growing demand.

It arguably gives Silver Chain some leverage in an increasingly crowded and competitive market, particularly with the advent of the federal government’s Consumer Directed Care policy that gives ageing consumers control over who provides their home care services.

Hospital at home

Chris praised the WA public health system, Medicare, GPs, pharmacy, the PBS system and imaging facilities, “but the reality is, if you are too sick for your GP to look after you […] you kick up into hospital at a thousand dollars a day where it is safe, until you see your GP. There’s a huge gap and Silver Chain is all about filling that gap. We don’t do hospital care or general practice.”

“There is fairly good evidence that 30% of patients in hospital don’t need to be there; they are there because hospitals don’t realise the care you can get in the community.”

He specifically pointed to the monitoring technology available, logistics, and over 3000 Silver Chain staff visiting people in their homes.

We suggested that a captured population for research in public hospitals and silos of specialised care may mean getting people away from hospitals is difficult.

“It is a complicated thing. A lot of people say hospitals are incentivised to admit people because they get their activity up. As Einstein said, if all you’ve got is a hammer then everything looks like a nail, so doctors in a hospital who see someone who is unwell default to admitting them because it is safe and familiar.”

“Ninety eight per cent of people prefer to be treated at home – it’s safer and it’s a fraction of the cost.”

When it comes to pinpointing the actual figures on how many patients each day benefit from ‘hospital at home’ care, it gets a bit rubbery. Patients going for early discharge may have been occupying a hospital bed for non-medical reasons, no one has a classification for ED referrals, and it is an educated guess as to whether treatment at home prevents a hospital admission. Even Chris varied the figure between 600 (certainly) and 1100 (likely) during our conversation.

He prefers the view that Silver Chain’s “virtual hospital” treats about 1100 a day, saying this figure is more than the total beds available at Fiona Stanley. His 1100 is made up of:

  • About 50% of the 300 early discharges from hospital (“Rolls Royce service, better care at a fraction of the price”).
  • 450 patients referred from ED departments (“a substitution for a hospital admission”).
  • The remainder from community nursing (“preventative care”).

We asked “Why haven’t we done it before, if it’s such a good idea?” He replied that Silver Chain had been doing it for some years, using palliative care’s good reputation.

Most doctors have heard that 70-85% of health consumers entering palliative care prefer to die at home. Chris said in Perth about 70% will die at home while the national average is 15-20%. About 85% of these patients avoid hospital admission in their last 81 days. This service to about 650 people at any one time has been going for about 30 years.

“WA has about half the number of palliative care [hospital] beds per head of population,” he said.

About eight years ago, the then Health Minister Dr Kim Hames, who in medical practice had used the palliative care service regularly, raised the idea of a similar service for those needing acute care.

“It was part of his election platform and it has been a huge success – now every other state is trying to do the same thing,” Chris said.

What role for doctors?

He said creating awareness among hospital doctors was a key to changing the system.

“One day every doctor who graduates might do a placement with Silver Chain. They might end up radiologists or pathologists but they’ll know what the community health system can deliver.”

“When you don’t know what the quality of care is like, or how the system works, there is a sense for hospital doctors that they are discharging people to an unsafe environment. That’s why it’s important to get doctors trained so they become familiar with another part of the system.”

In 2016 Silver Chain helped train 60 doctors for 10 weeks each but during 2017 the number is set to halve. Chris is hopeful that a growth in demand from clinical schools will see more doctors getting wider experience of seeing patients at home.

Who relies on Silver Chain?

“It is primarily aged people,” Chris said. “We see about 50,000 a year in our social care system but see about 30,000 a year needing clinical care. Some are wounds, stomas, diabetics with leg ulcers or pressure ulcers, and we do a lot of post-acute wound management.”

Taxpayers fund Silver Chain, through government grants.

“Annual indexation for our grants is 1.5% because the government is under pressure. We try and make a small surplus each year to put back into research and innovation in technology, particularly to improve communication between general practice and hospitals. We are constantly trying to reduce our costs.”

I suggested that Silver Chain had a reputation for being top heavy and bureaucratic.

“We took about $17m out of our back office systems last year, so you might have said we were a bit top heavy. We are on target to take another $12-13m out this year so we are continually pushing that boundary. We did have a large research team, about 12-15 people, all making sure our clinical protocols were evidence-based and tested.”

“So if you were to compare us with other aged care providers you might say we were top heavy, but if you were to look after as many people as we do who would otherwise be in hospital, you do need doctors and proper medical governance and top-notch clinical management systems and nurses who are more senior.”

Consumer Directed Care

Chris applauded the federal government for introducing more consumer choice in home care services but the downside for providers was that each consumer’s allocation was quarantined, which meant that organisations such as Silver Chain lost the ability to average things out by passing funds from those who don’t use all their allocation to those who need it.

He wasn’t worried about the efficacy of consumer choice under the CDC packaging.

“That’s part of reducing our costs, to represent value for consumers. We have consumers that have health needs that sit alongside their aged care needs. If you have a more comprehensive provider like Silver Chain you are more likely to stay at home.”

Plans to integrate

Eight months ago, Chris stepped down from board of WA Primary Health Alliance. He said he joined the board because he saw efficiencies in “one united primary care system that the state could work with”.

However, Silver Chain secured a WAPHA contract and Chris said he stepped down as there was a conflict of interest. But he defended his initial presence on the board saying it was related to his skills and experience in primary care. He had transferred to WAPHA from a previous Medicare Local board.

“When we started to talk about commissioning, I decided I didn’t want to be part of that.”

What sort of commissioning?

“We see a benefit for people in their late life who prefer to stay at home and get quality care. That is no doubt going to bring us to work with WAPHA on various innovations, trials and programs.”

“At the end of the day it is the consumer’s life. We should be responding to what the consumer wants. Our expertise is making sure consumers have the confidence to stay at home until the end.”

Consumer focus means what?

How will consumers choose the right provider in a health system that is hard to navigate at the best of times? Silver Chain has asked consumers what is important to them and staff is the top of the list.

“Most important is that they like the person who comes to help. They form relationships with staff. If you are old or at home, the person who comes and cleans or helps you shower may represent the most exciting thing that happens to you in a day – it’s important to get along with them.”

“The other thing is consistency – they don’t like it when personnel changes and they want to know when the carer is arriving. One of the big anxieties for ageing consumers is access to high quality, reliable care. Much more than a casual nurse who drops in on you.”

So the emphasis is on attracting and keeping good nurses.

“We have a very low turnover of nurses. We don’t put nurses into situations where they are forced to practise outside their scope. We have good clinical systems and good doctor backup so nurses know they are well supported.”


Global management consulting firm McKinsey is paying Silver Chain $500,000 to be involved in the business,

“We are about to do some work here with WAPHA, work that McKinsey is buying into, looking into how we look after people at end-of-life: What is the wrap-around service for those people who want to stay at home? There are about 12,000 deaths each year in WA, about 3000 of those are in palliative care and we could expect another 3000 or so.”

The organisation is also working with the NSW and Victorian governments offering end-of-life services in NSW and chronic disease management in Western Health in Victoria.

The NSW government is paying Silver Chain “a little less than usual hospital care costs” to keep people out of hospital during their end-of-life care. “It will be the first health-social impact bond in the world,” he said having explained that similar efforts to keep prisoners out of prison had worked effectively.

“We are particularly interested in this gap between primary and tertiary care, the commonwealth funded out-of-hospital plan doesn’t connect well with the state funded in-hospital plan.”

“The voter is realising that the gap between the two is costing the community a lot.”

Technology in Aged Care

Telstra Health. In October 2015, Telstra Health announced an agreement to acquire Silver Chain Groups’ technology arm EOS Technologies, particularly its community care management system, ComCare, and integrate EOS Technologies into Telstra’s HealthConnex business. Telstra Health’s Head of Provider Applications Michael Boyce said the ageing population was “the primary group at risk of chronic disease requiring care services in the home to avoid hospital admissions or residential aged care support.” Consumers wanted seamless integration of digital health technology which was partly what excited him about EOS Technologies. Silver Chain Group’s CEO Chris McGowan saw the sale as the right partnership for growth. We understand Telstra Health has developed ComCare and rebadged it as Communicare. Telstra Health has invested in health analytics firm Dr Foster, Medibank’s Anywhere Healthcare, and iCareHealth (provider of software to the aged care sector).

The lure of technology in Consumer Directed Care. There are about six providers in WA jostling for the attention of consumers who will soon direct who gets what for federal Home Care Packages. Technology is one point of difference providers can distinguish themselves with. Granny can have an iPad or tablet provided by an Aged Care Provider. It may be connected to a monitoring device by Bluetooth, or she may use the same iPad to telehealth consult with her health provider (specialist or ancillary provider), or use it to communicate with the visiting carer. How much extra granny pays for these services is yet to be worked out. Competition will be fierce, and Silver Chain among other NFPs have not had to compete on a commercial basis until now.

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