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The Changing Face of the Aged Care Sector

Many factors can bring change to an industry. In the case of the aged care sector, the aging population is having profound effects. As the Baby Boomers age, the sector will come under increasing pressure to provide services to an ever-growing market.

Improvements in health care, government policies and evolutions in consumer expectations are also bringing change to the sector. Those in the industry, or planning to enter it, should be aware of the changing face of the aged care sector.


The first of the Baby Boomers hit retirement age less than a decade ago and the youngest of them will reach 65 in the next decade. The large number of people in this cohort means that by 2036, almost a quarter of the New Zealand population will be over 65.

This all leads to more people requiring aged care. Improved health care and a healthier life in general mean that people are staying out of Aged Residential Care (ARC) for longer, but it also means that when they do enter, often due to poor health or dementia, they have longer stays.

As the Baby Boomers leave the workforce, smaller numbers of young people make some positions difficult to fill. This is especially true of the aged care sector, an industry that has difficulty attracting new workers. This means the sector needs to find efficiencies to manage work with a smaller workforce as well as attract new workers.


The government has been aware of the aging population for some time and its policies have a large effect on the sector. The new Labour Government’s immigration policies have received criticism from the industry as they rely on immigrant workers to fill positions.

Media investigations into aged care homes has led to greater scrutiny of the conditions the elderly are living in. Concerns about elder abuse and neglect have led to greater oversight by the government. Regular audits and stricter certification requirements bring new procedures, expenses and expectations to the industry.

Finally, with such a large segment of the population reaching an age that may require care, funding becomes a concern. Levels of government funding have always affected the way the aged care sector does business, but the pressure of numbers and a decrease in the amount of money available from the government have changed the ratio of profit and not-for-profit facilities, with the for-profit sector growing steadily. Many observers believe that the industry will consolidate, with larger companies taking advantage of efficiencies of scale to maximise their profits.

Consumer Expectations

Greater research into the diseases of aging have brought understanding of best practices for elderly people, especially those with diseases such as dementia. Many facilities have incorporated specialised dementia care, including separate spaces for those suffering from Alzheimer’s and other memory diseases. The understanding that staying active has benefits to the health and quality of life for elderly people has also changed the way ARCs are managed.

Baby Boomers also have different lifestyle expectations than the generations that came before. They were born into the peace and prosperity of the post-war era and built their lives accordingly. They want to stay active, continue following their passions and keep their luxuries as they age. This has changed retirement villages from closed communities to luxury, resort-like facilities, offering gyms, golf and even petting zoos.

The wish for continuity of care — staying in the same community from retirement living through to a time when high-care is required — has led to ARCs being built on the same campuses as retirement villages. This has also helped providers subsidise the costs of providing high-care facilities with the income from high-end retirement villages.

As Baby Boomers become clients of the aged care sector, their numbers, health, needs and desires will change the way aged care is provided in New Zealand and around the developed world. For businesses in the industry, staying on top of new trends helps ensure a continued prosperity.