Are not-for-profit Aged Care Homes better than private facilities?
Learn more about the differences between these two options.
Finding the right Nursing Home isn’t easy. With so many horror stories circulating through the news, it’s crucial to pinpoint a suitable facility.
When sifting through your options, you’ll learn Australian Aged Care Homes come in three unique categories: government, not-for-profit, and for-profit (or private).
Non-profits comprise the biggest share, while government-run facilities are scarce. The Australia-wide breakdown is as follows:
Government-run facilities are in high demand. However, as you can see, there aren’t many available in Australia, so finding a suitable government facility with a vacancy may prove impossible.
For this reason, most would-be Aged Care residents must decide whether to enrol in a non-profit or private facility. And that begs the question: which is better?
Like many things in life, there’s no clear-cut answer. It usually comes down to the individual facility rather than the organisational structure.
In this post, we’ll explain the pros and cons of the two types to help you gauge which is the best option.
In a not-for-profit Nursing Home, the “profit,” or the leftover income after expenses (wages, maintenance, equipment, etc.) have been paid, is invested back into the organisation. Theoretically, that should enable this structure type to offer better quality care.
Furthermore, non-profits (and government facilities) can offer enticing tax incentives to their employees. That lets them hire and retain top-quality personnel through better after-tax salaries.
Non-profits also attract volunteers, enhancing staffing ratios and the overall experience. Charitable or religious-affiliated organisations are particularly effective at enlisting volunteers.
Not-for-profit Nursing Homes traditionally aim to help vulnerable Australians obtain affordable care. That means their rates may be lower.
A report from the Centre for International Corporate Tax Accountability & Research found some not-for-profit Aged Care organisations aren’t financially transparent. The larger entities receive millions of dollars in government support and subsidies yet fail to paint a clear picture of how the money is spent.
Analysis suggests much of this public funding is funnelled towards property investments rather than improving the standard of care.
Therefore, while a not-for-profit should theoretically be able to provide a higher level of care, that’s not always the case.
Finally, religious organisations often operate non-profit Nursing Homes, which may cause a cultural/ideological clash. However, no organisation can discriminate based on race or religion nor force residents to practice any faith.
A for-profit (or private) Nursing Home will distribute surplus profit between its owners, investors, and shareholders.
Generally, private organisations are better at maximising income (higher fees) and managing expenses. But again, it depends on the specific organisation.
Large, profitable entities often operate more modern, sophisticated facilities in better locations than their not-for-profit competitors.
Private Aged Care facilities often charge higher fees, which aren’t always invested in the facility. You may end up paying more.
While the physical property is typically top-notch, private organisations may struggle to attract quality staff as they don’t enjoy the same tax breaks and therefore need to pay their staff more.
The Royal Commission into Aged Care Quality and Safety provided insight into the difference between non-profit and for-profit providers. In many categories, the two organisational types had similar results.
Hospitalisations from falls:
Hospitalisation from pressure injuries (bed sores):
Hospitalisation for delirium or dementia:
Prescribed antipsychotic medication:
Chronic opioid use:
Failure to meet standards during unannounced inspections:
Care provided by nurses per resident:
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Overall, both private and non-profit facilities offer a similar standard of care. And both are subject to the same regulatory and comopliance mandates from the government.
However, there are significant differences between specific Nursing Homes regardless of the ownership structure. You’re better off choosing a home based on its individual performance rather than the organisational structure.