Private, public or not-for-profit? Study uncovers the impact of ownership on aged care outcomes

With the new Aged Care Act just weeks away, the spotlight is on ensuring high-quality care for Australia’s ageing population. The most comprehensive and current study on this issue, recently published in the Medical Journal of Australia and based on 2019 data from the Registry of Senior Australians (ROSA) National Historical Cohort, reveals stark variations in care quality tied to ownership type – private, not-for-profit, and government.

These findings remain a critical guidepost, exposing how structural factors influence care outcomes. This article dives into the reasons behind these differences, from profit-driven decisions to staffing dynamics, and explores their implications for policy reform as the sector prepares for a transformative shift.

Ownership’s role in care quality

The ROSA study examined data from 244,754 individuals across 2,746 residential aged care facilities and 149,104 people in 2,407 home care services. Using risk-adjusted indicators, it assessed quality through metrics like medication use (antipsychotics, antibiotics, sedatives, opioids), emergency department (ED) visits, hospitalisations for falls or malnutrition, and home care-specific measures like waiting times and chronic disease management plans.

Funnel plots highlighted significant variations by ownership, with private, not-for-profit, and government providers showing distinct performance. In residential care, 13.9% of facilities were outliers for antibiotic use, 12.4% for high sedative load, 10.4% for chronic opioid use, and 6.7% for antipsychotic use, while 19.3% were outliers for ED visits. Home care showed similar patterns, with 7.8% of services as outliers for antibiotic use, 3.8% for high sedative load, and 14.7% for ED visits.

These variations underscore ownership’s enduring influence on care quality, making the study vital for today’s reforms.

Why ownership drives disparities

The differences in care quality across ownership types stem from a web of factors — profit motives, staffing dynamics, resource allocation, and organisational ethos. Here’s a deep dive into why these gaps exist, weaving in ROSA’s insights and broader aged care trends.

• Profit vs. purpose: The resource allocation puzzle
  Private providers, often guided by profit, may cut corners on staffing or preventive care to boost efficiency. The study’s high sedative load (45.2% in residential care) and antipsychotic use (21.4%) suggest private facilities lean on medications to manage behaviours, possibly due to limited resources for non-pharmacological approaches like dementia-specific care. Not-for-profit providers, driven by community missions, and government providers, backed by public funds, often invest more in quality initiatives, potentially reducing medication-related outliers.
• Staffing shortfalls: The heartbeat of quality care
  Staffing levels are pivotal. High ED visit rates (37.8% in residential care, 43.2% in home care) point to gaps in on-site medical support or training. Private providers frequently face criticism for lower staff-to-resident ratios compared to not-for-profit or government facilities, which may benefit from stronger funding. Not-for-profit providers, for instance, may prioritise specialised staff, lowering antipsychotic use (6.7% of facilities as outliers), while government facilities often adhere better to clinical guidelines due to oversight.
• Culture clash: Care philosophy in the spotlight
  Ownership shapes organisational culture, which drives care delivery. Not-for-profit providers, rooted in holistic care, often invest in preventive measures like regular health checks, potentially explaining lower delirium/dementia hospitalisations (4.3% in residential care vs. 10.5% in home care). Private providers, pressured to streamline, may adopt reactive approaches, contributing to high ED visits (19.3% of facilities as outliers). Government providers, while consistent, can face bureaucratic hurdles that slow responsiveness.
• Access gaps: Navigating service and infrastructure barriers
  Home care services showed stark variations, with 81.8% of recipients waiting over six months and only 3.2% receiving home medicines reviews. Private providers, operating in competitive markets, may struggle to coordinate timely allied health access, especially in regional areas. Not-for-profit and government providers, with community ties or public funding, often fare better, reducing hospitalisations for preventable issues like malnutrition (5.5% in home care vs. 2.5% in residential care).

Who leads the pack: Private, not-for-profit, or government?

While the ROSA study doesn’t rank ownership types, its funnel plots suggest private providers are more likely to be outliers for negative indicators like ED visits and medication overuse. This echoes the Royal Commission into Aged Care Quality and Safety (2018–2021), which flagged profit-driven shortcomings in private facilities.

Not-for-profit providers often shine in person-centred care, likely due to staff training investments, while government providers benefit from public accountability. Yet, private providers can excel in well-funded urban settings, and not-for-profit or government providers in remote areas may face resource constraints, showing variations within categories.

Policy reforms for a new era

The ROSA study’s insights, as the most comprehensive available, are a linchpin for reform as the Aged Care Act looms on 1 November 2025. With over 565,000 people in subsidised care in 2022–2023, addressing ownership-driven disparities is urgent. Key recommendations include:

• Stronger oversight for private providers
  Private facilities need stricter regulations to match not-for-profit and government standards. Expanding the National Mandatory Aged Care Quality Indicator Program with ROSA’s risk-adjusted metrics could enhance benchmarking.
• Bolstering the workforce
  The new Act’s staffing ratios must be enforced, especially in private facilities, with incentives for training in non-pharmacological interventions to curb medication reliance.
• Equitable resource allocation
  Funding should ensure not-for-profit and government providers in regional areas access allied health services, reducing urban-rural gaps.
• Real-time quality monitoring
  The study’s data linkage delays highlight the need for real-time quality assessments, a priority for the new Act to enable swift interventions.
• Incentivising purpose-driven care
  Grants for not-for-profit providers could promote mission-driven models, with public-private partnerships blending efficiency and accountability.

A call for equitable care

The ROSA study, though based on 2019 data, stands as the most authoritative analysis of aged care quality, revealing how ownership types shape outcomes through profit motives, staffing, and culture.

As the Aged Care Act approaches on 1 November 2025, these insights are crucial for tackling disparities and ensuring equitable, high-quality care for all older Australians, whether in private, not-for-profit, or government settings.