Who uses residential aged care now, how has it changed and what does it mean for the future?

For almost four decades, aged care policy strategy in Australia has been focused on expanding the supply of community-based care and constraining growth in residential care.^1,2 This strategy aligns with the preferences of older people, with optimising quality of life and with Commonwealth budgetary concerns vis-a-vis the escalating costs of residential aged care.

Most older people do not live in residential aged care. Certainly, the 182 704 permanent residents as of 30 June 2019 almost pales into numerical insignificance compared with the 840 984 people who used the Commonwealth Home Support Program in 2018–19,³ and aged care residents comprise only 4.4% of older people.⁴ Nonetheless, residential aged care is important for both financial and moral reasons. Financially, government expenditure on residential care totalled A$13.8 billion in 2018–19, comprising 69% of total aged care expenditure.³ Morally, older people living in residential aged care are among our most frail and vulnerable citizens.

In an era when aged care is a hot policy topic, it is important to understand the characteristics of residential aged care and the people who use it. Yet, with some notable exceptions,^5,6 there has been surprisingly little scholarly analysis of this topic. Rhetoric and newspaper headlines can be influential tools for policy change, but it is important to keep the facts firmly in view when planning for the future.

The facts are essential, but they can be slippery. For example, when we address ageist assumptions by emphasising that only 4.4% of older people are in residential aged care we run the risk of implying that it is not important for most older people. Yet, if we emphasise that approximately 40% of older people will use residential aged care before they die,⁷ we run the reverse risk of an implicit message that most older people are in residential aged care. We need to take the time to get the balance right, and to examine past trends with an eye to getting residential aged care policy right for the future. This paper aims to paint that picture.

Time series analyses were undertaken using national aged care administrative datasets and official statistics. Four data sources were used: the Australian Bureau of Statistics (ABS) Estimated Resident Population (ERP) counts (2009–19),⁸ the ABS Surveys of Disability, Ageing and Carers 2003–18,⁹ the Australian Institute of Health and Welfare GEN aged care data (https://www.gen-agedcaredata.gov.au/) and the Productivity Commission Reports on Government services (2010¹⁰ and 2020³).

Three types of data are presented: (1) resident profile data (age, sex, English-speaking background and care needs) are measured at a point in time and show the characteristics of service users; (2) age- and sex-specific usage rates demonstrate trends while controlling for changes in the size and structure of the aged population; and (3) admissions, exits and length of stay data show the flow of residents through the system over time.

The data presented focus on permanent aged care residents. Respite care is a specialised type of service provision and is not included in these analyses.

A common image of nursing home residents is that they are mainly women and mainly over 85 years of age. Indeed, two-thirds of the 180 923 residents in Australian residential aged care as of 30 June 2019 were women and over half (59%) were aged ≥85 years. However, a substantial minority were younger, with 11% of residents aged 65–74 years and a further 28% aged 75–84 years. These residents were born over the 45 years between 1909 and 1954 and include members of the Greatest Generation (born before 1928), the Silent Generation (born between 1928 and 1945) and the Baby Boomers (born from 1946 to 1964). A small proportion of residents (3%) were aged under 65 years (see Box 1).

The demographic characteristics of residents are changing (Figure 1). Between 2009 and 2019, the number of residents increased by 15%, but this overall number conceals the much larger growth rate among men (31%) compared with women (9%). Percentage increases were higher at the younger and older ends of the age range (people aged 65–69, 70–74, 90–94 and ≥95 years). The number of women aged in the ‘middle years’, aged from 75 to 89, actually decreased by 7% (almost 4400 women) during this period (Tables 1, 2).

Fig. 1.  (a) Women and (b) men living in residential aged care in Australia: permanent residents by sex as of 30 June, 2009–19.

Table 1.  Number of people living in residential aged care, permanent residents by age and sex, as of 30 June, from 2009 to 2019, Australia
Data sourced from the Australian Institute of Health and Welfare⁴

Table 2.  Age- and sex-specific usage rates per 1000 people for residential aged care and home care packages, as of 30 June, from 2009 to 2019
Data are sourced from the Australian Institute of Health and Welfare⁴

Over the decade (2009–19), cultural and linguistic diversity increased. The percentage of residents from non-English-speaking countries increased, from 16.7% in high care and 12.6% in low care to 19.8%.^3,10

Age- and sex-specific usage rates provide useful corroborating data on changing trends. Our older population is not just growing, it is also changing. The usage data reveal reductions in usage across all age and sex groups. The largest reduction in usage rates is among women aged ≥90 years (50 fewer residents per 1000 aged ≥90 years), but is also strong among women aged 85–89 years and men aged ≥90 years (Table 3).

Table 3.  Age- and sex-specific usage rates per 1000 people for residential aged care and home care packages, as of 30 June, from 2009 to 2019, Australia
Data are sourced from the Australian Institute of Health and Welfare⁴ and Australian Bureau of Statistics⁸

It is of note, although not demonstrably causal, that the increases in usage rates of home care packages are highest among similar age and sex groupings, namely men and women aged ≥85 years. Despite the ameliorating effect of declining residential care usage rates in these older age groups, demographic trends have nonetheless driven higher rates of growth among residents aged ≥90 years. The combination of trends has led to a reduction in the number of older women aged in their ‘middle’ years, a kind of ‘hollowing out of the middle’ in the resident population.

Resident profiles and usage rates give a picture of the ‘stock’ of residents at a point in time, whereas data on admissions, exits and length of stay help describe the flow of residents, or how the system is being used.

In 2017–18, 71 928 people entered permanent residential care, 62 167 of them for the first time.¹¹ The age and sex profiles of admissions are similar to but somewhat younger than those of current residents, and there is a larger proportion of male admissions (41% of admissions vs 33% of residents).¹¹ Of first-time admissions, 41% were from hospital, suggesting that for many a significant health event may have been a contributing or precipitating factor. A further 24% of admissions were from residential respite care, 3% were from transition care and 31% were from the community.¹² First admissions are a growing proportion of admissions to permanent care, and admissions due to transfer from other facilities are a declining proportion.

The most common reason for leaving permanent residential aged care is death. This percentage increased from 72% in 2008–09 to 83% in 2017–18. The proportion of exits to other residential care facilities has fallen (from 18.7% to 9.8%), as has the proportion of exits to hospital (from 3% to 1.6%).¹³ These data indicate the importance of palliative care services within residential aged care. The decline in transfers between institutions (now <10%) suggests that consumer choice, as indicated by exercising the option to leave, is either not a reality for most residents or else they are very satisfied with their care.

The mean length of stay for permanent residents was 30 months in 2016–17 and 2017–18, down from around 34–35 months in the preceding years,^13–18 suggesting the recent decline will either continue or stabilise in coming years, but is unlikely to reverse. As length of stay declines, more individuals make use of the available bed supply in a given time period, enhancing the effect of declining usage rates on required supply. However, although mean length of stay is a valuable metric, and the most commonly reported, more sophisticated analyses paint a picture of substantial diversity. One-quarter of residents stay for <6 months, and two in five of those stay for ≤6 weeks. At the other end of the continuum, one-quarter stay for more than 3.6 years, and two in five of those stay for ≥5.9 years.¹⁹

The care needs data collected through the Aged Care Funding Instrument show a substantial increase in the proportion of residents classified as having high care needs in each of the three care domains.²⁰ By 2019, one in three residents was classified as ‘high care’ on all three domains. The greatest increase in high care needs related to complex health care (from 13% to 52%; Table 4).

Table 4.  Percentage of people living in residential aged care with high care needs in the Aged Care Funding Instrument (ACFI) care domains, from 2009 to 2018, Australia
Note, the Classification Amendment (Complex Health Care Domain Scores) Principles 2016²⁰ reduced some scores for components of complex care, contributing to the observed reduction in the percentage of residents with high care scores for complex health care between 2016 and 2017. ADL, activities of daily living; Data are sourced from the Australian Institute of Health and Welfare²⁰

The proportion of residents with high care needs on all three domains was generally higher among women, and among people who were born in non-English-speaking countries. The proportion of residents with high care needs for activities of daily living and complex health care increased at older ages, but the proportion of residents with high care needs in cognition and behaviour decreased at older ages. Just over half the people in residential aged care have a diagnosis of dementia (52%), and 49% have a diagnosis of depression.²⁰

Corroborating data indicating high levels of resident dependency are available from the 2018 ABS Survey of Disability, Ageing and Carers (Table 5).²¹ A large proportion of residents is characterised by multiple impairments and comorbidities, across more than one disability grouping, and require aids or equipment for activities of daily living. Approximately three-quarters of residents had five or more reported health conditions and five or more impairments.

Table 5.  People aged ≥65 years living in aged care establishments, selected disability and health characteristics, 2018
Note: calculations were undertaken using the health establishment survey population, excluding those residing in hospitals or ‘other homes’. Data are sourced from the Australian Bureau of Statistics²¹

The data presented here demonstrate both continuities and changes in the characteristics of people living in residential aged care over the past decade. There are now more men, more people aged >90 years and fewer women aged between 75 and 90 years than was previously the case. There are also more residents from a non-English-speaking background. Dependency levels and complex care needs are increasing. Age-specific usage rates at the oldest ages (women aged 80 years and over and men aged 85 years and over) have declined. At the same time there are continuities. Residents continue to be drawn from across a 40-year age range (from 65 to ≥105 years). Usage rates at the younger ages (65–74 years) are relatively stable. Despite the increasing number of men, women continue to predominate. And although the number of residents from a non-English-speaking background has increased, the trend has been evident in residential aged care and in wider population projections²² for decades.

Mean length has stabilised at 30 months after a period of decline, but mean values cannot reflect the broad distribution in length. Residential aged care must cater for those who spend only their last weeks of life as residents, as well as those who live there for a substantial number of years. In effect, residential aged care facilities must be both a place to die and a place to live. Some 41% of first-time admissions are from hospital, suggesting that a proportion of residents is entering following an adverse health event that required hospitalisation. Exits from residential care are increasingly and predominantly due to death, with transfers to other facilities and to hospital decreasing over time.

However, in order to understand the implications of these trends, it is important to consider the broader aged care and social context. Outside of residential aged care, the aged care system has changed, with a substantially expanded suite of community care services providing options that were not available in the public sector a decade ago. Yet effective community care requires secure housing, and there is some evidence of a decline in the housing security of older Australians. The proportion of older home owners with mortgages is rising, as is the proportion of older private renters, those in housing stress and those who are homeless.^23,24 Home owners are less likely to enter residential aged care, and private renters more so.²⁵

The role of informal carers who provide the major share of support to older Australians living at home remains essentially unchanged. Current cohorts of older Australians continue to have low rates of childlessness at least until those born in the 1960s,^26,27 the baby boomer generation (now aged 56–74 years) is sibling rich and increased male longevity means more intact married (or partnered) couples at older ages.²⁸ Children and partners reduce the likelihood of entering residential care.^25,29,30

Disability rates have declined among older Australians, as have rates of severe or profound core activity restriction (Table A2). The substantial reduction in stroke rates³¹ can be expected to progressively reduce the number of people in residential care as a result of stroke-related disability. The non-fatal burden of disease trends show a decline in relation to cardiovascular disease, as well as hearing- and vision-related problems, but increases in relation to neurological disease, endocrine disease (mainly diabetes) and falls.³² The increasing prevalence of diabetes is likely to place additional healthcare demands on the aged care sector in the future.^33,34

Although it is often assumed that the number and proportion of people with dementia and other cognitive disorders in residential aged care will increase, there is actually considerable debate about what is happening with incidence rates and what is likely to happen in the future. Evidence from England, Holland and the US³⁵ indicates declines in the age-standardised incidence rates for dementia, with researchers speculating that this may be a result of more aggressive treatments of cardio- and cerebrovascular risk factors such as hypertension, diabetes and hypercholesterolaemia. Although we have no comparable Australian data, the age-standardised hospitalisation rates where dementia is mentioned as a diagnosis reduced by 23% between 2006–07 and 2016–17.³⁶ It is plausible that age-standardised dementia rates may fall in coming decades. Nonetheless, with growth in the older population this will still translate into a larger number of people with dementia, and a significant proportion of the residential aged care population.

The residential aged care data analysed in this paper are drawn in from national administrative data collections. The analyses presented here draw on variables for which data are collected and made available through the Australian Institute of Health and Welfare public access databases. It should be noted that the primary purpose of these data collections is not research, and, in particular, that the care needs data collected through the Aged Care Funding Instrument are part of the national payment system.

What may the trends described in this article mean for residential aged care services in the future? Analyses of this kind can offer insights into a possible future, rather than linear projections of what will be. As the Royal Commission deliberates on the aged care system as it currently exists, as well as on a potential blueprint for the future, it is timely to consider how the changes and continuities that characterise residential aged care can contribute to our thinking on a better future. There are implications for physical infrastructure, for resident engagement and activity, for care needs and quality of life and for the workforce. What changes could we envisage in imagining a better aged care sector?

Physical design that is friendly to the presence of family, friends and the community is important to resident engagement, activity and quality of life. We could, for example, plan for more accommodation that is appropriate for couples, given the implications of increased male longevity. This may be where both partners are residents, but also applies where a non-resident partner wishes to spend days or nights in the company of their loved one. In a sector that is used to a strong preponderance of women, an increasing proportion of men could require adjustments in relation to multi-occupant rooms as well as shared spaces (both inside and out of doors) that accommodate the activities and interests of male residents. For all groups of residents, we could plan better for family-friendly spaces for adults and children to visit, whether it be in the last weeks of life or over multiple years of living as a resident in an aged care facility. And there could be inclusions of various kinds to accommodate family members staying overnight with a resident who is distressed, acutely ill or dying. With dementia and other cognitive disorders continuing to affect a substantial proportion of residents, physical infrastructure and dementia-friendly design will continue to be an important priority.

A better residential aged care sector could be more attuned to the diverse needs of its residents than it has been in the past. People in their 60s have very different lifetime experiences from those in their 90s, and this affects expectations and preferences in areas as diverse as food and the use of technology. Increasing proportions of residents from non-English-speaking backgrounds will mean a greater need for cultural competencies and greater access to care workers familiar with the language of residents or to technology-based translation solutions.

All the indicators on patterns of use, dependency and disability point to a greater concentration of residential care services on a very high dependency population, with multiple comorbidities and care needs across multiple domains, including complex healthcare needs. The only counterbalancing factor to this trend may be a small proportion of older people with insecure housing tenure who will require entry to residential aged care at lower levels of dependency because of their need for secure accommodation.

Given the characteristics of residents, the need for skilled nursing care, chronic disease management, physical rehabilitation, optimum nutritional support and mental health care is undeniable. Given the large number and proportion of residents who will die in a residential aged care service, so too is the need for a workforce skilled in palliative care. Indeed, it is only rational to claim that palliative care is core business for a care setting where over 80% of those leaving care die. Accepting the need for health care as an integral part of residential aged care will challenge the programmatic, financial and regulatory silos that have developed in this sector, but that change does need to come.

Consider the following thought experiment: imagine what it would take to routinely provide ‘hospital in the home’ care to people living in residential aged care who require acute hospital services. Consider the reasons why it cannot be done. And then consider the reasons why it should be done.

Although the demographic profile of residents is changing, rates of use are declining and average length is shortening, the number of people in residential aged care continues to increase. The changes documented in this article regarding who is using residential care and how residential care is being used, when combined with some key trends in the broader population of older Australians, offer valuable insights in designing an improved aged care system for the future.

The author declares no competing interests.