Partial least squares structural equation modeling (PLS-SEM) has become more popular across many disciplines including health care. However, articles in health care often fail to discuss the choice of PLS-SEM and robustness testing is not undertaken. This article presents the steps to be followed in a thorough PLS-SEM analysis, and includes a conceptual comparison of PLS-SEM with the more traditional covariance-based structural equation modeling (CB-SEM) to enable health care researchers and policy makers make appropriate choices. PLS-SEM allows for critical exploratory research to lay the groundwork for follow-up studies using methods with stricter assumptions. The PLS-SEM analysis is illustrated in the context of residential aged care networks combining low-level and high-level care. Based on the illustrative setting, low-level care does not make a significant contribution to the overall quality of care in residential aged care networks. The article provides key references from outside the health care literature that are often overlooked by health care articles. Choosing between PLS-SEM and CB-SEM should be based on data characteristics, sample size, the types and numbers of latent constructs modelled, and the nature of the underlying theory (exploratory versus advanced). PLS-SEM can become an indispensable tool for managers, policy makers and regulators in the health care sector.