Abstract :
In response to predictions that population ageing will increase
government spending over the coming decades, in 1997–98, the Australian
Government introduced means-tested income fees and accommodation charges
for those admitted to nursing homes with income and assets above set threshold
levels. Immediately prior, all residents paid the same price for their care and were
not required to contribute towards the cost of their accommodation. In addition,
in relation to those eligible to pay a higher price, the Government reduced its
subsidisation of the cost of their care. The Government anticipated that the
initiative would more equitably share the cost of age-related services across the
public and private sectors, and result in some cost savings for itself. The purpose
of this study is to assess the impact of the policy on the average price paid by
residents. The findings suggest that the policy may have contributed to an
increase in the average price paid, but statistical evidence is limited due to a
number of data issues. Results also indicate that the rate of increase in the price
was greater after the Residential Aged Care Structural Reform package was
introduced. The study contributes to the economic analysis of the sector by
evaluating time series estimates of prices paid by residents since the early 1970s.
