Power to the people: Improving residential aged care quality through better consumer choice

The residential aged care sector is not meeting the expectations of Australians. The Royal Commission into Aged Care Quality and Safety has highlighted systemic poor quality, with overuse of psychotropic medications and physical constraints, social isolation and neglect.

The Royal Commission now seeks to develop recommendations to improve care quality. One question that remains unanswered is why have some residential aged care providers not accepted their responsibility to deliver good care quality, given it should align with their moral and pecuniary interests?

Providers have argued that limited government funding has impacted their ability to innovate. This may be true to some extent. Around 46 per cent of providers experienced a net loss in 2017-18, primarily due to government expenditure restrictions and increased wage costs. Some providers are likely to have shirked on quality to stay afloat.

This submission argues that the residential aged care market, shaped by Australian Government policy, has not delivered strong incentives for providers to deliver care quality above minimum accreditation levels. This stems from limited information on care quality available to consumers and large barriers to entry for new providers, which have dampened competition and reduced consumer choice.