AbstractNursing homes (also referred to as residential aged care facilities, or long‐term care facilities) cater for older people on a respite or long‐term basis for those who are no longer able to live independently at home. Globally the sector struggles to meet societal expectations since it is torn between three competing agendas—meeting the needs of residents, meeting the demands of regulators, and meeting the financial imperatives of nursing home proprietors. Competing demands indicate that the system lacks a clear understanding of its purpose—without a clearly understood purpose any system will become dysfunctional overall and across all its levels of organisation. This scoping study aims to summarise and synthesise what is already known about the systemic function and failures in the nursing home system, and the impact this has on the wider health and aged care system.MethodMEDLINE, EMBASE, PSYCHINFO, CINAHL and SCOPUS were searched using the terms: (nursing home care OR residential aged care OR nursing home) AND (organisational failure OR institutional failure OR systemic failure), limited to English language articles, including all years up to the end of February 2021. In addition, we used snowballing of article references and Google searches of the grey literature. System‐focused articles were defined as those that explored how an issue at one system level impacted other system levels, or how an issue impacted at least two different agents at the same system level.ResultThirty‐eight articles addressed systemic issues as defined in four different contexts: United States (14), Canada (2), Australia (11) and European countries (11). Only four studies reported whole‐of‐system findings, whereas the remaining 34 more narrowly addressed systemic features of specific nursing home issues. The thematic analysis identified 29 key systemic issues across five system layers which consistently appear across every country/health system context. The negative outcomes of these systemic failings include: high rates of regulatory reprimands for unacceptable or unsafe practices; dissatisfaction in care experiences on the part of residents, families, and care staff—including a fear of being sent to a nursing home; and the perception amongst staff that nursing homes are not preferred places to work.ConclusionsThe key issues affecting nursing home residents, and the care home sector more generally, are systemic in nature arising from two key issues: first, the lack of shared agreement on the care home system's purpose; and second, the lack of clear governance and accountability frameworks for system regulation and performance at a national level. Addressing these two key issues must be the starting point for any ‘real’ nursing home system redesign that can achieve a seamlessly integrated system that delivers the outcomes nursing home residents and their families expect. ‘Systems thinking’ is required to simultaneously improve care quality and outcomes for residents, strengthen regulation and accountability, and enable financial viability.