Quality effects of home acquisitions in residential aged care

The recent consolidation of the Australian residential aged care market has raised concerns about the potential adverse effects of acquisition activity on quality of care (QoC). We examined changes in QoC outcomes within acquired homes and the influence of the acquiring providers' characteristics on these post-acquisition outcomes.

A retrospective observational study was conducted using de-identified data sets obtained under the legal authority of the Royal Commission into Aged Care Quality and Safety. Regression analysis was used to investigate post-acquisition changes in QoC outcomes for 225 Australian home acquisitions between 2015 and 2019. The outcomes were analysed for the first two full financial years before and after the acquisition.

After controlling for other factors, we find acquired homes were associated with significantly worse QoC outcomes in the 2 years after acquisition, with higher rates of hospitalisations and reported complaints to the regulator. However, these results were driven by homes acquired by providers that were smaller in scale, for-profit or had comparatively poorer average quality across the other homes they operated.

Our finding that homes' QoC on average declines in the first 2 years following acquisition, are consistent with studies in other countries and points to the potential risks that consolidation poses to the care delivered to older people in Australia during that period.