Ownership of Residential Aged Care

Market failure exists in the provision of residential aged care services in Australia due to imperfection of competition that arises out of government actions. The Commonwealth Government has the exclusive right to grant provider rights and control over the number of beds that will be funded to suppliers. This results in making competition in the provision of the service less than perfect. Further imperfection occurs, with the regulation of pricing with the government providing most of the revenue for the provision of services. This paper uses primary national data collected for residential aged care facilities in late 2004 to test the significance of ownership in the design and implementation of occupational health and safety management systems. As part of this paper, the importance of other factors in determining the implementation of these systems was also examined. This study finds that ownership is significant using logistic regression. The results from logistic regression were broadly consistent with those from preliminary analyses. Relatively fewer for-profit facilities operated in less than highly accessible regions and were more likely in larger sized compared to those not-for-profit. This is going to have important future impact on the availability of facilities in rural and remote regions. Increasingly not-for-profit operators are closing their facilities or moving away from the provision of aged care and they may not be necessarily replaced with for-profit providers.