IS A nursing home run by volunteers better and more cost effective than one run for profit? The Health Ministry wants to find out.

It has asked private homes to say how much they want to look after up to 500 fairly incapacitated patients. The amount they ask for and the sort of care they can provide may become the new benchmark for all nursing homes receiving government subsidy in future.

The patients they will be called upon to house are those who are wheelchair-bound and who may also suffer from dementia, as well as patients who are totally bedridden.It will be in the interest of the private homes, which run about 40 per cent of the 8,500 available beds, to bid for these patients. That is because among them, they have almost 1,000 beds unused today.

But once their bid is accepted by the ministry, they will be committed to those numbers for two years starting July this year.

A ministry spokesman said she hopes that private nursing homes would put in attractive bids, since empty beds mean a loss in overheads. It would thus be in their interest to take in some subsidised patients, with the government footing the bulk of the bill.

A ministry statement on Friday said: 'Through this competitive market-based system, we hope to get the best performance and value when allocating subsidised beds to existing or new providers.'

'At the same time, we hope it will help improve consistency in patient care and facilitate healthy competition between providers.'

The standard of care today varies greatly, even among the charity-run homes. So does cost.

The vast majority of poor elderly are housed in nursing homes run by VWOs, that usually charge from a couple of hundred dollars to over $2,000 a month.

The Government gives between 25 and 75 per cent subsidy to poor patients, based on their income band. Only those who have a per capita family income of $1,000 or less are entitled to subsidy.

Rates at the private sector, on the other hand, range from under $2,000 to over $4,000 a month.