Trends in Aged Care Services: Some Implications

Abstract

Prospective changes in the demand for and supply of aged care services present a number of challenges, according to a new Productivity Commission Research Paper.

The Australian community values older people having access to high quality and cost effective aged care services. This is reflected in current institutional and regulatory arrangements, which give considerable weight to achieving equity of access and a minimum acceptable standard of service quality.

A recent Commission Research Paper, Trends in Aged Care Services: Some Implications, builds on earlier work by the Commission in the areas of demographic change, health and aged care.

The study finds that the aging of Australia’s population will call for the provision of aged care services to a much larger number of people over the next few decades. Services will also need to meet the challenges posed by the increasing diversity of older people in terms of their care needs, preferences and affluence.

The paper notes that the provision of aged care services is shaped by centralised planning and administrative processes, extensive government regulation and high levels of public subsidy which limit the capacity to respond to changing demand. There are also concerns that the system is overly fragmented and difficult to access and navigate, reflecting multiple programs combined with the involvement of multiple government departments and agencies across different jurisdictions. Fragmentation impedes improvements to service interfaces and can restrict the aged from understanding which services might best meet their needs. Currently, governments largely determine how many aged care places are provided, where these places are located, the appropriate mix of services, the price of these services and how they are modified in response to changing community expectations. Competition and price play little role in signalling to providers the changing patterns of demand and the need to adjust decision-making accordingly (including the need for new investment).

The Commission paper highlights several areas where further analysis could aid the development of an improved framework for aged care.

Keywords: aged care, aging, residential facilities, nursing homes