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For-profit providers more likely to be sanctioned: study


For-profit aged care services have a higher rate of regulatory failure, according to new research that found private providers were more than twice as likely as not-for-profits to have government sanctions imposed on them over a 13-year period.

The new research will likely spark fresh debate about the link between facility ownership and quality standards. While NFPs currently account for approximately 60 per cent of the residential aged care sector, private operators are the fastest growing segment.

According to the analysis by University of Technology Sydney doctoral candidate and registered nurse Richard Baldwin, ownership type, jurisdiction and service location were significant predictors for sanctions.

Services in remote locations were nine times more likely to have sanctions imposed than services in major cities. Across Australia, NSW had the lowest rate of sanctions and the Northern Territory the highest.

The study is based on a statistical analysis of accreditation data since the system of accreditation and sanctions was introduced in 1999.

Mr Baldwin’s analysis supports the findings of previous local and international research. The higher rate of sanctions in for-profit services was first identified by Australian gerontologist Anna Howe and Dr Julie Ellis in 2010.

Mr Baldwin, from the university’s faculty of nursing, midwifery and health, said he hoped the research would contribute to a robust debate on quality within the sector and help focus government’s regulatory efforts to maintain or improve quality in aged care.

“The international literature is quite clear about the fact that not-for-profit services provide better quality care than for-profits,” he told Australian Ageing Agenda. “However, there is very little debate about that in Australia, virtually no debate.

“Everybody thinks services are all the same and I think this research indicates that they are not the same.”

Given the link between provider characteristics and the likelihood of sanctions, Mr Baldwin said the Australian Government should take factors such as ownership into account when planning future services.

In particular, he said the government should carefully consider the impact of a potential move to full market deregulation. He added:

“If the government was to reduce the controls on supply in the way it has been recommended by the Productivity Commission, the government should give serious consideration to the impact that that might have on the quality of services”.

Jurisdictional differences

Different patterns of aged care ownership between NSW and Victoria could explain why Victoria experienced a significantly higher rate of sanctions, the analysis said.

NSW has a very large NFP sector, which in 2011 delivered 68 per cent of all residential aged care services. Only 28 per cent of services were operated by for-profit services and 4 per cent by government services.

Victoria, by comparison, has 40 per cent of all residential aged care services delivered by for-profit providers, 25 per cent by state and local governments and 36 per cent by not-for-profit organisations.

Facilities operating in Victoria, Queensland, South Australia, Northern Territory and Australian Capital Territory were more likely to have sanctions imposed, according to the findings.

Further research

While adding to the small volume of research in this area, Mr Baldwin said the study could not explain why for-profit organisations experienced more sanctions and it did not examine the quality of the care delivered by providers that passed accreditation.

He said other factors such as staffing levels, staffing qualifications, provider size, resident characteristics and income have also been associated with regulatory failure and were worthy of further investigation.

The study was published in the Australasian Journal on Ageing.



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2 Responses to For-profit providers more likely to be sanctioned: study

  1. Greg October 8, 2014 at 5:14 pm #

    Ownership type is just one variable, organisation size and the associated capacity to resource professional quality management regimes – a factor correlated to a (now decreasing) degree with ownership type is closer to the issue of quality outcomes than imputed motives and an assumed impact on behaviour. This factor also varies by jurisdiction and location.

    The higher rate of sanctions in for-profit aged care homes was identified a good deal earlier than 2010 and this data was presented at a number of industry conferences during the 2000s.

    Hornet’s nest warning here!!!

  2. Dave October 10, 2014 at 12:10 am #

    Move along…nothing to see here!

    The same ‘revelations’ have been presented for years. It’s flawed analysis of a flawed system.

    I’d be interested to know where Mr Baldwin obtained his data. In 2012, Aged Care Crisis found the DOHA listed 241 facilities with NNCs and sanctions on their website, yet an independent 4 year investigation identified over 1400 facilities with failed standards, NCCs and sanctions.

    The obvious lack of transparency and disclosure from regulatory bodies implies that all published results should be treated with suspicion.

    The current accreditation system is comedic farce and facilities that fail accreditation deserve to be shut down for stupidity rather than non-compliance. How can we rely on a system that gives you months of warning prior to a review? (C’mon, who hasn’t witnessed the extra staff rostered on for the big day, the flurry of fresh paint and new equipment, the preceding weeks of record fluffing and gap filling to cover the previous three years of incompetence) and assessors with little or no medical or nursing background studiously checking care plan updates and temperature logs instead of looking under the sheets?

    The accreditation agency was set up primarily to assist facilities improve their services, not as a regulatory body. The high incidence of assessors who privately contract as consultants raise questions about achieving accreditation by paying the umpire. We’ve all witnessed instances of homes gaining accreditation when they should have been sanctioned. I particularly like the ‘support contact” (Huh?) 4 months post accreditation that identifies ‘serious issues’ that were obviously present during the accreditation.

    It’s really quite funny…unless your mum or dad lives there.

    Until we collect and publish meaningful data (pressure injuries, acute hospital transfers, Infection rates, etc.) and implement a clinically skilled regulatory body that knows what to look for (Hint…it isn’t all in the paperwork, folks), analyzing the existing data is waste of time.

    So are the smug self-congratulations upon passing (hoodwinking) accreditation. You know who you are.

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