Intertemporal analysis of organizational productivity in residential aged care networks: scenario analyses for setting policy targets

With an increasing ageing population, there is a growing concern about how the elderly would be looked after. The primary purpose of this paper is to develop scenario analysis using simulated data where various criteria are incorporated into modeling policy targets, and apply an intertemporal productivity analysis to observe inefficiencies as reform unfolds. The study demonstrates how dynamic network data envelopment analysis (DN‐DEA) can be used to evaluate the changing productivity of residential aged care (RAC) networks over time. Results indicate that it takes 9 years for 90 % of the RAC networks to have 85 % or more of the total beds in high‐level care, and an optimal bed capacity is reached by the end of year 7. Number of beds and registered nurses employed are the main sources of inefficiency. The common core inefficient cohort identified with the paper’s method represents a sub‐group of RAC networks more deserving of closer managerial attention because of their constantly inefficient operations over time.