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Keywords:

  • Residential aged care;
  • Efficiency;
  • Costs

The focus of this article is on the Report of the inquiry into residential aged care in Australia. Consideration is given to the results of a confidential survey of financial submissions from providers of aged care. Most attention is given to labour costs and earnings before interest, taxes, depreciation and amortization (EBITDA). The most important result is the evidence showing providers whatever their size, location, ownership and resident mix, can perform in the top 10 per cent and 25 per cent of providers as measured by EBITDA. Management is vital to the performance of entities whether they be ‘for-profit’ or ‘not-for-profit’ entities. Attention is also directed to other studies about efficiency and productivity and modelling. Treating technical efficiency as a measure by which the industry lags behind best practice, the analysis of regulatory efficiency explains much about ways to secure gains in efficiency.