Comprehensive Health Strategies: Industry Sector Analysis of Aged Care Services in Australia

This report analyzes the aged care sector in Australia, including its primary activities, potential competitors, industry trends, and ethical concerns. It also discusses the competitive landscape and identifies and describes the organizations within this segment. The report provides valuable insights for investors and healthcare professionals.

Running head: COMPREHENSIVE HEALTH STRATEGIES
INDUSTRY SECTOR ANALYSIS
Name of the Student
Name of the University
Author note

1COMPREHENSIVE HEALTH STRATEGIES
Introduction
The process of industrial analysis works as a tool for organizations and companies which
provides similar services or products in the market to understand their standing within the
competition (Dean 2012). It also helps them to strategize a competitive and effective planning so
that they can establish their services better within the existing competition (Hamm and Hamm
2012). Aged care services in Australia provides the elderly population with their unique needs
regarding of their health and the growth of this industry has reached its highest point where it has
become a $20 billion+ industry in recent Australia, under which, 224,000 people are employed in
more than 1800 organizations that serves up to 300,000 people around the country
(Myagedcare.gov.au 2018). As the number of baby boomer generation is increasing, the scope of
such residential aged care homes are increasing extensively and covering interior as well as
exterior regions of the Australian territory (Baldwin, Chenoweth and dela Rama, 2015).
In this aged care industrial analysis related report, a detailed description of the aged care
sector and its primary activities within the helathcare sector of Australia will be discussed and
then the overview of the competitive landscape, identification and description of the
organizations within this segment will be discussed as per their business model. Further, the
industrial trends and its operating conditions and the factors includes will be discussed. Finally,
the ethical concerns faced while conducting such services within the industry will be discussed
Aged care industry and its primary activities
As per the Health and Standardization regulations of Australian healthcare system, aged
care is a service with a special purpose through which all the elderly population requiring
healthcare needs as well as accommodation, assistance for their activities of daily life so that

2COMPREHENSIVE HEALTH STRATEGIES
they can live their life independently (Myagedcare.gov.au 2018). Due to this helathcare needs
and intensive care requirements, aged care has become one of the most important helathcare
needs for growing older population of Australia and such service has become of the most
important service in helathcare sector from where investors can generate maximum revenues.
There are three sections of the aged care facility in Australia, HACC (home and community
care), home care and residential care (Aged Care Financing Authority 2018). The primary
activities of this service is associated with providing care and assistance to the older patients
within their care facility with their activities of daily life, movement, sanitization, as well as
mental care such as providing counselling and other communication therapies so that physically
and mentally they could become independent and live their life without and concern (Baldwin,
Chenoweth and dela Rama, 2015).
Potential competitors of aged care industry
As the aged care sector is a human service, many economists does not support the fact
that this sector could also face such competition like other services face while competing in a
closed market segment (Kim and Mauborgne 2014). However this service could be named as the
“Experienced Good” or the kind of service in which competition does not exist till the users use
one service and then provides feedback of that specific organization. Hence, the competition will
exist from the point where the consumer and the service providers are part of the market closely
(Kaine and Ravenswood 2013). As only after using the service, one patient can feel that the
service was helpful or not helpful, majority of the aged care service are equipped with equal
patients within their care facility (Yeandle, Kröger and Cass 2012). The three sections of aged
care such as HACC, home care and residential care and share of non-profit and private as well as
government sector within the facility has been mentioned below using graphs.

3COMPREHENSIVE HEALTH STRATEGIES
74%
18%
8%
HACC
non profit
for profit
government
[Distribution within HACC, created by the author with data from (Aged Care Financing
Authority 2018)]
69%
12%
19%
Home care
non profit 74
for profit 18
government 8
[Distribution within Home care, created by the author with data from (Aged Care
Financing Authority 2018)]

4COMPREHENSIVE HEALTH STRATEGIES
52%
37%
11%
residential care
non profit 74 69
for profit 18 12
government 8 19
[Distribution within residential care, created by the author with data from (Aged Care
Financing Authority 2018)]
As per the latest report of the market based report of 2017, the majority of the aged care
providers belong to non-profitable organizations provide services within a specific geographical
boundary (Yeandle, Kröger and Cass 2012). However, as the consensus of Australian population
indicated to an increase of aged population up to 5.7 million by 2031, the authority has
forecasted that to increase the competitive landscape all the aged care service centers should
increase their strength, by primarily acquisition or merging with healthcare facilities so that
patients requiring aged care facility should be provided with immediate care and help while
providing required care and intervention as per the helathcare facility (Kaine and Ravenswood
2013).
Therefore, there are organizations, which are working for changing the market
competition landscape in the aged care sector (Han et al. 2017). Further, due to the presence of
non-profit organizations in the market, private organizations are suffering from loss of patients
and are unable to generate required revenue so that they can successfully continue to serve the
elderly population with their quality care service (Brandt et al. 2012). Further, the aged care

5COMPREHENSIVE HEALTH STRATEGIES
facilities in the country are also diversifying their facilities within the aged care facilities and
including culturally competitive care, food choices, providing mobility aids and others so that all
the patients living or want to take service within the care facility can use the expanded care
facility as per their need (Yeandle, Kröger and Cass 2012).
Aged care industry trends
The rising population of the Australia’s aged population will lead to a significant
rise in the aged care services. It is important to highlight that there are two different aspects of
demographic trend. The first trend is that the structure of the Australia’s population is changing
while the second aspect is that the longevity of the Australia’s elderly population has elevated.
Within the Australia’s population there is an increase in the number of the generation of the baby
boomer and it consists of significant portion of the Australia’s elderly population. The population
of Australia has moved to an age group of 65 years and more (figure 1) (Abs.gov.au 2018). Over
the last 10 years the percentage of the population that belonged to the 65 years of age is 3
percent. This trend has significantly increased in comparison to the younger population. The
aged population is not only getting older but also the aged people are living longer due to the
advancement in the technology and medicine. The international report has suggested that the by
the year 2055, the Australian’s that are aged between 60 to 70 years are expected to live for four
to five years. Combining the two demographic trends of life expectancy between the men and
women, it can be said that there will be increased amount of demand on the aged care services
(Baldwin, Chenoweth and dela Rama 2015) (Table 1).
Table 1: life expectancy from 2015 to 2055 (treasury.gov.au 2018)
2015 2025 2035 2045 2055

6COMPREHENSIVE HEALTH STRATEGIES
Life
expectancy at
the age of 60
Men 26 28 30 31 32
Women 29 30 31 32 33
Life
expectancy at
the age of 70
Men 17 18 19 20 21
Women 19 20 21 22 23
Figure 1: Australian population by the age group from the 2004 to 2014 [source:
Abs.gov.au 2018]
Funding of the aged care- the funding of the aged care is considered to be complex
because the services are provided by both the private and the public sources. The service car
delivery greatly varies with the residential services, home care, Home and community care
(HACC). The funding the of the aged care is presently moving towards a more market based
system and consumer driven system with majority of the financial reforms are occurring in the
residential aged care system (Australian Institute of Health 2012).

7COMPREHENSIVE HEALTH STRATEGIES
Changing preferences of consumers- The current trends show that the government is
slowly moving towards a consumer oriented and market based aged care facility and it is
increasingly becoming important for the type of aged care services provided. The preferences of
the consumers have significantly impacted by the three different trends. The trends are that the
aged population are increasingly preferring to age at home, the aged people that are moving into
the aged care services are increasingly moving towards the personalised services, and the baby
boomers that are entering the aged care generally demand a high level of the complex care. The
older population is increasingly becoming diverse and this has resulted into a culturally relevant
care (figure 2). There are major issues like the disabilities and the chronic diseases are highly
prevalent among the Australian aged population and especially with two or more chronic health
issues (Agedcare.health.gov.au 2018).
Figure 2: incidence of chronic disease by age [source: Australian Institute of Health
2012]

8COMPREHENSIVE HEALTH STRATEGIES
Aged care workforce and technological change- There is a wrong perception that
technological development can affect the workforce, however it can be seen that the
technological advancement leads to the creation of the new opportunities for job. Presently a
total of 350,000 people are working in the aged care services and imbalances are created with the
automation in the manufacturing sector of aged care (Agedcare.health.gov.au 2018).
Ethical issues within the industry
The ethical challenges has been present in the industry of the health care for a long time
now. Studies have shown that in the last twenty years there has been an increase in the older
population to about 81%. By the end of 203, the number of aged people in Australia will be as
high as 5.4 million (Brownie and Nancarro 2013). With the increase in the number of the older
adult patients, there is an occurrence of ethical dilemma regarding the choices which are
conflicting in nature in terms of the process of dealing with something where there is a lack of
any positive outcome. Studies that have conducted in this regards have shown that the physicians
often find themselves in difficult situations where it is seen that they have doubts as to which
action to take which might be best for the given situation. Often there are incidences where the
nurses feel that they are unable to fulfil their ideals of professionalism especially in the situations
that are presented with ethically difficult situations (King, Wei & Howe 2013). In such times
these professionals are often threatened about their self-image thus causing a mental distress. The
ethical and the medical issues therefore can be deduced from an action as well as the perspective
of relational ethics. The perspective of action ethics is responsible for questioning the concerns
related to what a person should do in a situation that is ethically difficult. According to this given
perspective it is perceived that, these ethics are based on the reflection of the challenges that are
presented or encountered in the relationship of the person which impacts the making of the

9COMPREHENSIVE HEALTH STRATEGIES
decision. On the other hand the perspective of relational ethics is encountered while the person
wants to fulfil the social roles along with the obligations in a way which presents oneself as a
human being or a colleague or a high level decision maker (HDM) (Mahieu, Anckaert and
Gastmans 2017). The ethical focus of an individual masks the reality of the fact that the aged
care includes a wider frame of reference than health care. The ethical decisions taken in terms of
aged care, not only involve the aspect of medicinal care but also the arrangements of living,
family or the business affairs along with the estate and financial planning. All of these involves
the partners and the family members in an intimate manner.
Advocacy is an important part of the ethics in the industry of aged care. As a result of
which, there needs to be an autonomy which needs to recognise the capacity of an older person
in order to reach to the decisions which is often enhanced by the circumstances of the family. In
aged care the role of an advocate is similarly available to the nurses as well as the other health
care professionals, however the audience of the advocacy are disparate in several ways which
often responsible for making the expressions of advocacy complicated (Bauer et al. 2013).
Most of the ethical issues that is experiences in the aged care industry partakes to the
presence of the cultural barriers, the education, end-of-life wishes of the older patients, the life
cycle choices and the responsibilities. As nurses ne should be able to show value to an individual
or value their wishes however this is often difficult for frail older persons. Certain services needs
to be provided to the older patients like formal education, or demonstration of competence along
with inculcating personal growth (Tarzia et al. 2013). An ethical dilemma rises in situations of
end-of-life wishes of the patients. The nurse is primarily committed to the patient which can
often lead to rise of conflicting statements. Lastly in terms of lifestyle choices and the

10COMPREHENSIVE HEALTH STRATEGIES
responsibilities, it is required to address the behavioural elements of successful aging, which
helps to ensure a start to the process of healthy ageing.
Conclusion
In order to conclude it can be stated that Australia will be experiencing at least a doubling
in the population of the older adults who will be in need of care. Although the government has
taken steps to encourage the support that is provided to the older people of the Australian
population so that are able to remain in living situations that are independent. However steps will
also be taken to move these people to the aged care accommodation in case such situations
arises. In spite of this, with the increase in the number of the older patients it is more difficult for
the professionals to provide suitable and quality acre to these people. This situation calls for the
rise in ethical dilemmas in respect to quality care, making correct medical decisions, or valuing
the patients as individuals.

11COMPREHENSIVE HEALTH STRATEGIES
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