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AUSTRALIA

Aged care exemplifies the limits of markets

  • 24 September 2018

 

Recent airing of shocking treatment of elderly residents in Australian aged care facilities has led Prime Minister Scott Morrison to announce a royal commission. Sadly, however, the allegations of abuse and appalling conditions in nursing homes are not new. The question becomes, therefore, what has resulted in poor outcomes for vulnerable citizens, and why have we permitted such treatment to go on?

In a society whose foundation unit is the nuclear family peopled by individuals who are workers and consumers, we are accustomed to outsourcing care of the vulnerable: small children and the elderly among them. As life expectancy increases, frailty and disease can take hold and institutional care is more than simply a convenience for family — it becomes a necessity.

That is not to say that home care of the elderly is an idyll. Caring work is difficult physically and emotionally, even when performed with love. Sadly also, elder abuse is now a well-documented phenomenon. However, the conditions in nursing homes speak to institutionalised malaise at best, and racketeering at worst. What is most offensive is that corporations profit from the abuse that is allegedly occurring.

While there is a mix of for-profit and not-for-profit aged care providers, there is no doubt that aged care is an industry that it is market-driven, and that this is intended. The Productivity Commission, for example, made a series of recommendations in 2011 designed to enhance consumer choice in aged care.

In 2016 the government published the Aged Care Roadmap. It reports that 'the aged care system is operating more like a consumer-driven market' but seeks to build on the Productivity Commission recommendations including to 'increase choice and control for consumers' and to develop a 'lighter touch approach to regulation' for providers. In addition, since 2013, to increase efficiencies in the industry, the government has withdrawn more than $2 billion from the industry.

It is difficult to argue against affording 'choice' to the elderly seeking appropriate accommodation. It may also seem logical to free up the 'red tape' of administration, to 'permit innovation' in aged care services. The reality is, however, that the language of markets, including consumerism, free choice, efficiency, and the absence of regulation (or an 'agile and proportionate regulatory framework'), do no favours to those entering into care.

A market system thrives on an assumption of consumer choice. In reality however, it is profits that provide the incentive for suppliers. In circumstances where consumers are