Caring for Older Patients: Quality and Efficiency of Australia's Healthcare System

With population ageing and increased longevity, Australia faces pressing policy issues on caring for older people. As Medicare turns 40, it is timely to assess how the system has been performing, and what changes are needed to modernise Medicare. This article examines the quality and efficiency of care using hospital administrative data. We find that the current system provides good quality and efficient care for older patients, except for those living in residential aged care homes. These patients receive lower quality care yet stay longer in hospitals. We suggest alternative approaches designed around bundled payments and a single budget holder to provide incentives for integrated team‐based care.