PD called me in response to DD’s comments on here regarding our prices with the Grant … As mentioned by Zmans, he is doing an interview however he has asked me to pass on this info so we can have some comfort …. He knows we’ve all taken a big hair cut in the past couple of days … he was actually quite shocked as he thought it was a good 4C ... even had calls congratulating him ... go figure
Firstly, our initial price of $10 per targeted bed was a bit ‘clunky’ so they went to between $4.20 - $4.50 for an All Bed Pricing … average number of dementia patients in facilities are around 40-50% so we are still ‘technically’ up in that initial price range
Initially Minister Wyatt asked PD how much he’d need to roll it out to every aged care bed in Australia .. he said around 10mil … KW asked what can you do with 5 straight away. After discussion, it was agreed the best option was to give universal access to all residents in aged care with dementia….or up to 100K of the 200K total residents … of the 5mil we have to dedicate 500k to Research & Training with the balance of 4.5mil for licenses for the 100K people with dementia in aged care… so we are getting $3.75 per dementia resident bed per month… not really a big discount … but the exciting part is how the subsequent years work.
First Year – the facility gets access to PCK for their dementia beds via the government grant for zero cost (around 50% of their beds) and PCK recognise the dementia beds as revenue (up to 100K beds @ $3.75 per bed per month across the 2000 or so homes) for which the govt pays PCK.
Years 2 and 3, post the govt grant, the facility switches to the standard $4.20 - $4.50 pricing under the All Bed Pricing model and pays PCK directly. The one year govt grant gives the aged care facility time to budget for the next years cost. This means we switch pricing models back and forth over two years and is captured in the “normalised” ARR referred to in the quarterly.
PCK believe the take up of the subsequent years will be strong after one year’s experience and integration to the Aged Care’s back end system. They have had no churn rate today from existing clients.
This is a win-win-win as it improves resident’s care in residential homes, helps govt address the issues around the royal commission…..see interim report released on Friday…..and PCK becomes a gold standard in all aged care facilities within 12-24 months…….With this model, we can penetrate up to 100% of the aged care facilities and have an independent outcomes study completed to support further government investment too.
He said that it will be signed off in the next week or so and then they will receive the official offer (they are working with DoH through the Gov department process) and at that time we will go from 12k beds to 20k overnight and targeting 40k before Christmas and well on track for 100K by this time next year.
He apologised for not being able to attend TechKnow, but had to go back to Europe for Phillips …. Interestingly, Prof Hughes is still there … looking forward to that update!
How good is that!!!! .. pop the bubbles !
Cheers to all
GC
PCK Price at posting:
22.5¢ Sentiment: Buy Disclosure: Held
… looking forward to that update!
