A two-tiered system in residential aged care is emerging with significant consequences for consumer choice, according to Australian researchers who have called for a public debate on the preferred industry ownership structure.

Residential aged care data analysed over the 10 years to 2012 shows a geographic split in the service provision between rural and remote Australia and the major cities.

While larger, for-profit services have dominated growth in the major cities, smaller, often government-operated facilities have increased their presence in outer regional and remote areas.

The researchers, Richard Baldwin, Lyn Chenoweth and Marie dela Rama from the University of Technology, Sydney, said aged care consumers may see a reduction in their capacity to choose between provider types and facility sizes if these trends continued.

“Aged consumers outside of major cities will continue to have very limited choice if they want to choose a for-profit provider and those living in remote and very remote locations will be increasingly dependent on state government service providers,” they said.

The growth of larger, for-profit services could also impact on the quality of life for those residents who would prefer a smaller, more intimate not-for-profit service, they said.

“Should these trends continue we may see the emergence of a two-tiered system in Australian aged care based on economic and geographical factors, whereby there is one sector operating in major cities and inner regional locations and a different sector operating in outer regional and remote locations,” the researchers wrote in a paper published in the Australian Journal of Public Administration last week.

Public debate missing on ownership mix

The researchers also called for community debate on the growth in the proportion of aged care beds operated by for-profit providers in light of international evidence showing that not-for-profits deliver higher quality care.

The authors said the impact of different types of aged care ownership on financial performance and resident outcomes had been the subject of “robust and growing” research for over two decades, mainly from the US but also Canada, England, Israel and Italy.

View the full article: Researchers warn of two-tier aged care - Australian Ageing Agenda (13 Feb 2015)