Aged care: Its importance to the Australian economy

Australians who are elderly receive crucial help from the aged care sector for their comfort and dignity. Those who benefit from the care and assistance provided by the Care Economy recognize its good impact, but its economic impact is not fully understood.

It is crucial that the elderly care sector is profitable and sustainable for the future and that all government stakeholders and the larger society appreciate its economic and social importance. By working together, aged care facilities can continue to serve their seniors with high-quality services.

Beyond providing jobs, the aged care sector has a significant economic impact. Additionally, the sector fosters opportunities for charitable giving, lowering the incidence and expenses of more expensive medical treatment and enhancing the quality of life for senior Australians and their families. 

GSP and GDP Contributions

The economy significantly depends on the aged care industry. In 2019–20, the industry made a $2 billion direct contribution, directly accounting for one out of every seven dollars spent on business in the healthcare and social assistance industry.

For every $1 million spent by the industry on providing services and support to its clients an additional $1.5 million in total gross output is produced.

Residential care services ($2.5 billion, or 65% of total direct and indirect contribution) made the largest direct and indirect contribution to the economy, followed by home care ($646 million, 16.6%), home support ($432 million, 11.1%), and other services ($279 million, 7.2%).

Workforce Contribution

In Australia, there were 35,997 direct and indirect employment produced by the elderly care sector in 2019–20. One in every 25 full-time job in Australia was either directly or indirectly supported by the aged care sector in 2019–20.

To put these employment figures into perspective, the total number of direct and indirect jobs produced by the aged care sector in 2019–20 was equal to the combined workforce of the "big 4" mining giants of Australia: Rio Tinto, BHP, FMG, and Woodside.

Rising Complexity of Care Requirements

Longer lifespans and complex health issues, such as an increase in dementia cases, are factors for quality aged care services. Alzheimer's disease is the type of dementia that is most well-known. The number of Australians living with dementia is unknown, but there is an estimate that there will be between 400,000 and 459,000 of them in the country by the year 2020.

Because dementia causes significant distress and high degrees of dependency, people with the condition experience the intersection of health services and aged care services. The majority of persons who get dementia are 65 years of age or older, making age the biggest recognized risk factor for dementia.

The percentage of patients in need of residential care with dementia increased between 2008–09. Approximately 43% to 45% of all permanent residents have routinely entered aged care.

Without a big medical advancement, we can expect that the number of dementia sufferers will strain Australia's elderly care systems by 2050.

Staff that has undergone specialized training need to provide the specialized care that dementia patients in residential aged care require, and there is evidence that specialized training raises the standard of dementia care. Staff training can lessen behavioral and psychological symptoms, according to one study.

Customer expectations are evolving

The demand for different types of aged care services as well as customer expectations for service quality are likely to be impacted by medium- to long-term economic and demographic shifts. Overall, future generations are expected to be wealthier than the current generation, making them more picky about the types and levels of services they want, as well as better able to pay for them.

There has been a rise in the number of aged care service providers delivering residential care facilities at a high grade during the previous five years. Historically, retirement living homes have offered this level of service more frequently. As their health needs alter and force this shift, it is expected that future residents of luxury retirement living will seek a comparable level of treatment in an aged care facility.

Elderly individuals want a seamless, personalized experience, as do their families and caregivers. This is crucial during the process of switching between service kinds. In order to enable the transition between service types, aged care providers will need to devote resources to customised planning services.

There are more and more providers available to consumers in the aged care sector, particularly for home support and home care. Increasing numbers of providers of senior care and the If service quality or value for money expectations are not satisfied, switching elder care providers is made simpler by the competition this fosters.

Finally, the projected operational and regulatory improvements are likely to raise consumer expectations in the short to medium term.

The pathway the aged sector has been moving toward over the past 30 years—away from an institutional service model and toward a more consumer-driven and market-based aged care system—underpins the significance of changing consumer expectations to be recognized as an emerging industry trend across the dimensions mentioned above. This shift parallels what has happened in the disability services industry.

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