There is one critical determinant of nursing home care and that is nurses with the skills and motivation to provide care. Nurses are also the single major cost for the operator of nursing homes, comprising over 60% of all expenses. Staff numbers and staff skills are consequently the first target of cost cutting and profit taking.

Food, medical consumables, equipment and the state of physical resources are additional costs which if compromised also impact on care. With the possible exception of food, these are not obvious to the relatives of a prospective resident seeking accommodation. The marketing material including glossy brochures and websites, the impressiveness of the foyer, the sales pitch of the homes’ manager and the person at the front desk are only too obvious, yet these essentials in the marketplace contribute little to care.

Financial factors

Two financial factors ultimately impact on care, funding and profits. If there is insufficient funding then the staff and resources needed for care will not be there. If a profit is taken, then there may not be enough left for care. In a system which is largely dependent on limited funding either from government or the average person’s retirement savings, there is seldom money to spare. Some rationing of resources and so indirectly rationing of care is the rule.

If the service is for-profit, then that profit must be taken from the money provided for care. Care must be rationed to fund it and those who do this must justify it to themselves and others. This usually means fewer less skilled nurses. Convenient explanations are used to justify this - such as claiming that skilled nurses are unnecessary for the simple tasks required and calling it 'efficiency'.

The staffing myth

An excellent example of this is the myth about the sort and quantity of staffing required in aged care. The elderly currently stay at home much longer than they used to. They are older and sicker than they have ever been by the time they enter nursing homes. Technology increases the complexity of care. To care for this group of elderly residents we need more staff and higher levels of skill than ever before.

Multiple studies have shown and continue to show that the standard of care in nursing homes is closely tied to the number of staff and their training.

It was probably inevitable that businessmen would create and promote the myth that you do not need training to wipe bottoms, feed, lift and hand out pills to people and that employing expensive trained staff was inefficient and wasteful. Politicians struggling to find funds for projects which would ensure their re-election have found this rationalisation irresistible.

The problem of staffing

The coalition state Government in Victoria lifted all requirements specifying nursing levels in 1995 handing this over to the market. In 1997, the new federal coalition Government followed suit deregulating the market across the country.

The problem is not only about profitability - it is also about funding - and if there is no funding then cuts must be made. In the face of a funding shortfall management boards even of not for profit operators will usually cut staff rather than more visible costs. They are not at the coal face and do not understand what happens there. Nurses faced by pressures to downsize and dumb down nursing have gone to their unions. The unions were the first to speak out and have continued to do so pressing for change.


Funding is a major problem in Australia. Caring for people is time intensive and requires dedicated and motivated staff. Typically staff costs can comprise over 60% of costs. Quite apart from the problems which arise from too few cheaper less trained staff, there is the problem of morale.

Nothing impinges on dedication and motivation more than feeling that your generosity and commitment is being exploited by penny pinching Governments with huge surpluses (as in Australia), or by managers of companies earning large bonuses by cutting costs to give investors returns.

Government funding is a concern across all sectors including the not-for-profit sector. Part of this is related to Governments’ acceptance of the myth that you don’t need numbers or skills in nursing homes and that cutting costs without breaching accreditation standards is efficiency.

This is a political problem in both socialist and conservative governments, but the latter more readily reduce public funding as this drives citizens into paying for their care so creating an illusion of the competitive market they believe in.

I don’t have a problem with people paying, if they can afford it or if they want more luxury. I do have a problem with what is happening as a consequence of government driving the process as a profitable competitive marketplace. I have a problem with inviting in the share market. In such a system the experience is that the vulnerable residents will be short changed.

My own view is that whatever system we have, communities should play a pivotal role in running and overseeing the operation of nursing homes in their community. Neither politicians nor market moguls can be trusted to deliver the care the community expects.

The community needs to place itself in a position where it has the muscle to ensure that funding is fair in the light of what the country can afford and what the community is prepared to contribute. It also needs to be in a position where it not only knows but sees what is happening in the local nursing homes so that it can balance funding and care. Organisational structures in the community are needed to accomplish this.

The problem with all the opinions expressed in the press is that all parties are playing games to get more money, some to provide better care, others to get bigger profits. What is clear is that the minister in 2000, Bronwyn Bishop, believed that nursing homes could be run on a shoestring. She was wrong and many hundreds if not thousands have suffered poor care and probably earlier deaths because of it.

Nursing and skills shortage

Key problems in Australian nursing homes are the number of staff, the level of skills and the motivation of staff. Salaries, working conditions as well as altruism are key factors for staff providing humanitarian services. Paid nursing carers may put up with poor salaries and working conditions when their dedication and altruism is valued. When these are no longer valued and play second fiddle to profitability, cost cutting and efficiency staff become distressed and will not tolerate it any longer.

Skilled nurses have been undervalued and have left the sector in droves. They have been replaced by unskilled people off the street - the sort of people which politicians felt could adequately wash, lift and feed. Although there were clear warnings a low priority was given to training.

While increasing salaries and training improves the situation and may hold more staff this does not address the problem of morale created by the marketplace context. (see section in Riverside page)

It took 10 years for the message about staffing to sink in and even a Senate Inquiry was ignored. Only when the elderly were raped did a new minister devote funds to training the staff better. Little, if anything, has been done about working conditions or the destruction of motivating forces in the system.

US governments are slowly responding to public pressure to impose minimal staffing levels. In Australia, Julie Bishop, the Ageing Minister in 2004, was still describing this as 'a union wish list'.

Nursing salaries

The nurses have pushed strongly for salary increases and it is an important factor in addressing the problems. While government has given salary increases to the nurses it has employed, it is far from clear whether payment to private operators of nursing homes have been increased to permit similar increases. It is difficult to assess the extent to which this is valid or simply a business ploy to secure more money to increase profit.


One of the problems with deregulating an industry is that Government can no longer regulate and require that services are provided in a certain way, or that money provided by government goes to where it was intended.

Government may wish to fund staffing but there is no way in which it can insist that the money it has provided will be spent in that way. In support of their ideology they have revoked their own power and delegated this to the market, a market whose prime concern is to keep costs down and increase profits. Increasing staff salaries pushes up costs and decreases profits.

One of the complaints in the USA was that when additional funding was given specifically for staffing, for-profit corporations did not use it for that purpose. Market operators are there to make money. Quite rightly, they can decide who they employ and how they will spend their money. The problem is not the market, but the applicability of a market system to aged care.

Nursing experiences and burdens

There is a stark divide between the perspectives of company boards, managers and politicians on one hand and of the nurses who care on the other.

The nurses experience of what is happening is described on this website. Some nurses and nurse aids have given vent to their frustration by writing about it. Joanne Bryant in a piece, on the Aged Care Crisis web site, entitled The Truth Behind Aged Care writes of her experiences coming back to nursing after many years and going into an aged care system dominated by "greed based management". She writes of the disillusionment, yet dedication of staff.

This disillusionment and frustration is particularly well illustrated by a satirical piece describing commercially focussed nursing homes as people farms. It was written by an experienced nurse aid who for obvious reasons must remain nameless.

As I have indicated elsewhere, a dysfunctional market system selects for the sort of people who will do what is required of them to make money regardless of the human consequences. It then promotes them. The most glaring example of this is the US company Tenet Healthcare which promoted and supported staff who would exploit and misuse children for profit and 10 years later supported and promoted a poorly trained doctor doing unnecessary heart surgery.

Exactly the same sort of thing can be seen in Australian aged care. Nurses who will pressure staff into doing what management requires are promoted into senior positions. Some lack human skills and humanitarian motivation, are bullies and are ruthless and uncaring. Bullying and intimidation have been ongoing and there are recurring complaints. Quite obviously, these nurse managers are not going to employ nurses who buck the system and challenge what is happening. There are many extracts describing the experiences of nurses.

Riverside, where staff were bullied into giving kerosene baths was a good example. A nurse who worked there briefly explains.

Dysfunctional staffing, bullying, disillusionment and apathy in this market system have reached the stage in Australia where staff caring for residents can watch one of their charges being raped and do nothing about it. A nurse manager also did not see it as her role to report incidents of sexual abuse. These are not isolated or disturbed people, but a system in serious decay, and a culture of care in disarray.

Policy and the Unions

Individual nurses may be admired and highly regarded by those they care for but they have little power. In the sort of situation we have in aged care they turn to their unions, the only body giving them some power. In a society dominated by economic rationalist thinking unions are seen as part of the loony left, self interested and out of touch with the realities of economic life. They have little credibility and can be ignored.

In the USA and in Australia the unions have been the organisations that have most consistently stood up to the political and market powers. They have pressed the financial interest of their members but have also exposed what is happening in health and aged care, and advocated more sensible policies.

Even though the weight of events and evidence has validated their position and forced change this has done little to improve their credibility in the eyes of the ideologically persuaded. The unions used the February 2000 Riverside scandal to drive the issues but with little success.


In a functioning system where the objectives of the system and the primary focus of those in positions of power coincide the exposure of problems is more likely to be welcomed and corrective action taken. When the objectives of the system and its primary focus are in conflict as in an aged care market, then the exposure of failures in meeting humanitarian objectives becomes a threat and a challenge to those who have built their lives using a conflicting paradigm. The response is very different.

One of the most important lessons from the USA is that regulatory oversight and on site inspections are singularly ineffective. Regulators are seldom there when they are needed and fail to identify what is happening. Detection and prosecution of problems is largely dependent on whistleblowers. The reason why so much fraud is exposed in the USA is because their whistleblowers get much more protection. The Qui Tam laws provide them with a vehicle for action and their efforts are rewarded and recognised.

In Australia, a once every three years inspection by the accreditation agency was not designed to work and in spite of all the hype we should not expect this. Whistleblowing in Australia is very different. Whistleblowers are discouraged by a secretive government and have to endure all of the criticism, intimidation (eg Milstern) and economic privations to which they are subjected without any hope of recognition and reward, and often with little hope of success. It is remarkable that so many continue to speak out.

Governments continue to pretend that legislation to protect whistle blowers and handle complaints aggressively would result in a flood of vindictive and unsubstantiated complaints. Experience shows that this is not so as a majority of those who complain have solid reasons for this.

In health and aged care nurses have the least stake in the system whether they are employed by the market or by government . They consequently identify less with management’s objectives and are not bound to its thinking. They are closest to the coalface and the patients so most traumatised by what happens there. The important part they play in exposing problems is well illustrated by the exposure of poor care in hospitals in NSW and Queensland hospitals over the last few years.

In aged care it is the nurses who have spoken out about what is happening. The recurrent scandals in nursing homes have been because nurses or the relatives of patients have acted to expose the failures. In most instances nurses have been fired. Even when they have been vindicated they have lost their jobs when the homes were closed. Riverside is a classical example. Without them this scandal would not have happened.

Nurses who have blown the whistle are much less likely to be employed by other homes. There is very little incentive for others to speak out. In most nursing homes there are only a small number of staff and it is usually obvious who has spoken out. They can be victimised.

The not for profit sector is caught up in the competitive market system and responds similarly. One home fired a nurse who had been with them for 5 years when she responded to an invitation to comment by doing so. When 8 nurses lodged a complaint about the dreadful conditions at Emerald Glades Nursing Home they were all fired. I do not know what happened to them after they were vindicated.