Government stewardship for aged care is on the agenda – but how do we make it a reality?

Government stewardship for aged care is on the agenda – but how do we make it a reality?


As Australia’s aged care system takes shape following the Royal Commission, there is an increasing expectation that governments will take a hands-on role. And one of the key roles of governments – both federal and state/territory – is to act as a steward of the system.

At its heart, effective system stewardship enables access, sustainable services and responsive policies. While it is easy to talk about the importance of stewardship, putting it into operation can be far more challenging.

Drawing on Nous’ experience working with policymakers and aged care providers, we have sketched out a vision for what the future of stewardship could look like.

What did the Royal Commission say about stewardship?

The Royal Commission into Aged Care Quality and Safety found there was a significant role of government as market steward.[1]

“There is … a great and pressing need to strengthen the current arrangements if the trust and confidence of the Australian community in the Government’s stewardship of the aged care system is to be rebuilt and maintained,” the Royal Commission found in its final report. The commissioners went on to note: “Stewardship requires a governance system that is characterised by active engagement to ensure that the aged care system is the very best that it can be.”

The Royal Commission found the status quo is not working, highlighting an inadequate response to the changing composition and risk profile of aged care providers. It found the absence of a strong consumer voice leads to a one-size-fits-all approach to program design and delivery. Meanwhile providers in populated areas have expanded with limited scrutiny, while rural communities face a service deficit. In government, aged care policy is highly centralised, and the sector’s regulator tends to be reactive to adverse developments.

The Australian Government has committed to place more residential aged care places in the hands of consumers by 2024. It is already stewarding the market by reducing barriers to entry for developing new residential aged care services. This highlights the need to broaden market management beyond relying on reducing barriers to competition.

How does stewardship work in practice?

Good stewardship creates the right conditions to deliver public value. These conditions involve a stable and mutually beneficial relationship between three actors: consumers, governments and providers.

The connections between these three actors can be presented like this:

Shaping these relationships are system dynamics, which can be divided into signals – the information system participants in the sector give through their actions – and drivers – their motivation for action.

Stability requires consistency in signals and drivers, as constant changes undermine the ability for a system to reach equilibrium and increase risk of inappropriate or unintended outcomes.

What does good stewardship mean for rural and remote care?

Rural and remote parts of Australia have particular needs when it comes to aged care. The availability of aged care in many regional rural and remote areas is poor, so the lack of access to care close to home makes it difficult to maintain social connections and exacerbates feelings of isolation.

Older Australians living in regional, rural and remote communities have lower incomes, poorer education and poorer health outcomes. Some 40 per cent of all Australians aged 70 to 74 live outside capital cities, but provision of care is inadequate: over half the ageing population in very remote communities, moved more than 100 kilometres to enter an aged care facility.[2]

Given these circumstances, good stewardship can be a powerful agent in improving the provision of aged care to underserviced rural and remote communities. Understanding the diverse characteristics, risks and requirements of regional, rural and remote communities is an important requirement for designing an effective aged care system:

From here, it is useful to develop a contestability framework – that is, guidance for approaches to influence outcomes for different levels of contestability. Segments can be defined by their typical characteristics and market dynamics, as well as by the requirements and risks for communities, providers, and government. The framework can be developed by refining characterisations for the aged care market in regional, rural and remote communities, then using service mapping and reflecting the experience of providers and consumers.

What has this meant for regulators and providers in other sectors?

Take early childhood education. It is very difficult for centre-based services in remote communities to recruit and retain early childhood teachers that meet the National Quality Standards. The national regulator does not want to compromise on the minimum standards but wants to support providers to achieve them as soon as practicable, given closing the providers would leave communities with insufficient services. The solution? A capability-oriented compliance approach, in which the regulator rates providers as “working towards meeting the standards” and monitors their progress rather than automatically removing their licence to operate.[3]

Then there is provision of employment services. An expert advisory panel has recommended multiple providers be assigned to a cluster of services, with a market share guarantee to enable provider confidence. The partial competition aims to meet providers’ and consumers’ needs while delivering choice, innovation, collaboration and quality of service provision. A capped licensing system reduces red tape and supports new providers and/or small specialist providers to grow their expertise in the market. The funding models use a benchmarking system to reflect regional variations and challenges.[4]

Already there are examples of where governments have risen to the challenge of rural and remote service provision in aged care. The Dorrigo MPS (multi-purpose services) is a 27-bed facility in northern NSW providing flexible care options including a 24-hour emergency department, sub-acute general medicine, residential and respite aged care, community nursing services and Home Care packages. This a unique partnership, with Services NSW and Services Australia both operating within the MPS. The Royal Commission recommended continuing to expand the Multi-Purpose Services model.

The Australian Government’s implementation of a regional network in aged care is another positive step to understand, engage, strengthen and coordinate local and national aged care markets and systems.

The desire for improved stewardship will be enduring

All indications, in both aged care and general service provision, are that stewardship is of heightened concern for governments. The idea of just stumbling through with existing tools and processes will fail to deliver the results people are seeking. Government agencies need to embrace the challenge and imagine what the future stewardship of aged care will look like.

Now is the time for boldness and innovation.

Get in touch to discuss how we can support your organisation to reimagine system stewardship in aged care.

The ideas in this paper were earlier explored by Nikita Weickhardt in her presentation on addressing critical challenges of rural and remote aged care at the online conference Driving Transformational Change in Aged Care, organised by COTA and Aged and Community Services Australia (ACSA).

Connect with Nikita Weickhardt on LinkedIn.

Prepared with input from Stephen Teulan and Hamish Ride.

Published on 7 December 2021.


[1] Final Report, Royal Commission into Aged Care Quality and Safety, March 2021

[2] Royal Commission into Aged Care Quality and Safety, Research Paper 16: How far do people have to move to access aged care?

[3] Guide to the National Quality Framework, Australian Children’s Education & Care Quality Authority, October 2018

[4] Future of Employment Services Report, Department of Education, Skills and Employment, December 2018