Market Failure? The Limits of Digital Marketplaces in Providing Care

Why It Matters

The platform’s shortcomings risk widening gaps in aged‑care access as Australia’s older population grows, prompting policymakers to reconsider market‑based digital solutions.

Key Takeaways

• Inspector‑general calls My Aged Care “not easy to use, not equitable.”
• $20 million added this year; $259.9 million slated for 2026‑27 ICT upgrades.
• Digital marketplaces have raised prices up to 40 % in some cases.
• Non‑English speakers and Indigenous users face extra barriers accessing care.
• Market‑based models struggle with complex, high‑risk care needs.

Pulse Analysis

Australia’s attempt to digitise the entry point to aged‑care mirrors earlier experiments with the National Disability Insurance Scheme (NDIS) and overseas e‑marketplaces. The My Aged Care portal, now merged with the Support at Home initiative, was designed to let seniors and their families locate providers, compare services, and book care online. Yet the recent inspector‑general report paints a stark picture: the interface is difficult to navigate, information is inconsistent, and the system fails to serve users with complex health needs or limited digital literacy. The federal budget reflects this ambition, earmarking $20 million this year and $259.9 million for further ICT upgrades in 2026‑27.

The shortcomings are not merely technical; they have tangible market effects. Evidence from the disability sector and a 2015 UK study shows that poorly regulated digital marketplaces can inflate prices rather than drive competition, with Australian providers reporting 35‑40 % hikes as they transition to the new platform. Vulnerable groups—non‑English speakers, Aboriginal and Torres Strait Islander peoples, and those requiring high‑risk care—experience additional hurdles, often needing manual assistance to complete a process that should be self‑service. Such inequities undermine the promise of a universal ‘front door’ to care.

Policymakers now face a choice: double down on a market‑driven digital model or pivot toward a hybrid approach that blends technology with proactive government oversight. Strengthening provider vetting, ensuring real‑time data accuracy, and offering alternative access channels for low‑digital‑skill users could mitigate current failures. As Australia’s elderly population is projected to rise sharply, the cost of inaction may be measured not only in higher service fees but also in widening gaps in care quality. A recalibrated strategy that treats digital tools as enablers—not the sole gateway—will be essential for equitable aged‑care delivery.