(photo from Humber Valley Senior Citizens Club)
In Volume 28 of the Jewish Seniors Alliance’s Senior Line magazine, JSA members Kenneth Levitt and Larry Shapiro debated some of the arguments for and against for-profit long-term-care facilities. They offered their personal opinions in the debate, as JSA does not have a position on this topic. Their views are reprinted here, with permission.
For-profits here to stay
by Kenneth Levitt
The COVID-19 pandemic with its various mutations has caused a justified focus on long-term care (LTC) in Canada. Organizations such as the B.C. Health Coalition, the NDP, unions and other left-leaning activists or progressives, as well as some physicians, have called for the abolition of all for-profit (FP) facilities, recommending that they be taken over by provincial governments or government-approved not-for-profits (NP). This will not happen in the near future. For-profits (FP) are here to stay and, furthermore, provincial governments support them with LTC operating agreements.
The two main issues are profit and quality of care. In British Columbia, there are 27,000 persons in LTC. Approximately one-third are in each of government-operated, NP and FP facilities. When an FP builds or upgrades a facility, there is no government capital fund support. Capital funds for FPs come from investors and shareholders, whereas NPs depend on governments and their own fundraising efforts. FPs have saved governments billions of dollars in capital costs.
In general, residents are financially responsible for their room and board. Their care is paid for by the local funding authority. Should residents pay from their assets (as in the United States) or continue to pay based on income testing? Should residents who are capable contribute more for their room and board? Many NPs raise funds to subsidize care; others permit paid companions to provide extra care for residents. Should investors who put up their own risk capital (with government “ipso facto” approval) be permitted to make a profit? Is it immoral?
FPs did not do well in terms of COVID-19 deaths. Horrendous stories from Ontario and Quebec came to light that noted the squalor and the shameful living conditions of many vulnerable residents. In British Columbia, a number of NPs and FPs had too many COVID infections and deaths. Staff were not exempt from contracting COVID. How do we account for this? When we factor in those facilities with two or more residents per room, the number of COVID-19 infections, complications and deaths increase dramatically for NPs and FPs. In most cases, staff and visitors were responsible for importing the virus. Governments/health authorities were totally unaware, at the outset of the pandemic, of the extent of the problems. However, most care homes planned well, had few infections with a high percentage of vaccinated staff, and are faring well during the pandemic.
It is not just a move to single beds that will solve the problem of COVID and seasonal flu outbreaks, it is the design of the facilities. We need new and upgraded buildings now. It is also imperative that all staff be vaccinated, and that they be supported by management to better prepare for future health crises.
Canada needs FPs. FPs have the capacity to provide needed accommodation for older adults who qualify, and can build more LTC beds faster than governments. They can provide improved efficiency and greater innovation than NPs. The naysayers want to nationalize all private-sector nursing homes in Canada. The National Institute on Aging at Ryerson University in Toronto recently noted, “Some of the FPs are doing well because they have deeper pockets and much better planning procedures than NPs. It is not clear that one class of ownership is better than the other.”
In an April 2021 report, Isobel McKenzie, B.C. Seniors Advocate, criticized FPs for apparently short-changing the number of direct care hours for which they were paid and making a profit by doing so. At the same time, McKenzie noted that capital costs (building maintenance) is one area where FPs outperform NPs.
There is one FP LTC operator in Ontario, Schlegel Villages, that is at the cutting-edge of services and programs for their residents. Schlegel is a family-owned company that has about 5,000 residents and about 5,000 staff in 19 villages. It did not escape COVID-19, but they have excelled in what is known as “best practices”:
- Their philosophy: a purposeful life for each resident.
- Each village is accredited.
- Staff are unionized and pay is the same as at NPs.
- Owners are committed to providing exceptional care, and are good corporate citizens who are involved in and contribute to the communities they serve.
- Newer villages are 60% private rooms and 40% with two persons per room. Moving forward, all new construction will be single rooms with ensuites.
- Each resident has two bathing opportunities per week.
- Villages have several neighbourhoods, with 32 residents residing in each self-contained neighbourhood that is well-supported by seven staff with a variety of skills.
- Each village has programs and space open to outside community organizations and they encourage locals to hold events in the available space.
How can we move forward in a constructive way that includes government-operated facilities, not-for-profits and for-profits?
- The federal government, in partnership with the provinces, needs to develop and to legislate a set of standards of care and service that will be enforced with consequences. This can be done through accreditation, which is currently voluntary. Once the feds have placed standards of care and service into law, each province should enact similar legislation to require that all LTC facilities be accredited. A provincial accreditation body would be responsible for accrediting, monitoring and enforcing standards.
- Accreditation would ensure every LTC facility is delivering the hours of care and support for which they are receiving funds.
- Wages and benefits for full-time staff should be uniform for all LTC facilities and part-time staff should be equally entitled to the same wages and benefits.
- Hours for home care and Better at Home need to be increased. The financial threshold needs to be lowered to allow more persons in need to take advantage of such a service. This has the potential to put less strain on waitlists for LTC admissions.
- When an FP is for sale, give preference to a quality NP to purchase it or allow a local (new) society to purchase and operate it.
- Require all LTC facilities that plan to expand to have only single rooms with ensuites.
- Develop a timetable and a budget for NPs to upgrade/replace current outdated institutional/hospital-style buildings.
- Healthcare leaders, their boards of directors and seniors should be the ones who are advocating and pushing for changes. The status quo is not acceptable.
To eliminate FPs is specious and politically and/or ideologically motivated and is a short-sighted non-pragmatic position. Canada’s Parliament last year voted against such a proposal put forth by the NDP. The issue is not between the NPs or the FPs. The issue is how to ensure that the interests of the residents come first.
The billions of dollars that would be required to eliminate the FPs can better be used for increased and quantifiable quality programs and services. This would be the best and the most ethical way to honour those lost in the pandemic and to ensure it will never happen again. The issue is how we treat our most vulnerable older adults. After all, is it not a matter of human rights and choices?
No place for profits
by Larry Shapiro
My goal in this debate is to paint a comprehensive picture illustrating conclusively why many of the for-profit long-term-care facilities (LTCFs) are squandering public funds, with little transparency or few accountability requirements to honour any predetermined set of standards in the areas of quality of service, accountability and profit. We need to see profit taken out of long-term care and need new investments in public and nonprofit beds so that we can reduce our dependence on the private, for-profit sector.
Decades of budget cuts, underfunding and privatization by successive governments have resulted in the catastrophic state of the many private care facilities that have been the sites of the loss of a great number of our loved ones. Nobody should be profiting from the care of our senior citizens. Policy decisions going back 20 years have encouraged raising the profits of private LTCFs by replacing union staff with contract workers, which has resulted in personnel shortages, declining working conditions and less access to public funding. The centre of most COVID-19 outbreaks in British Columbia and throughout the rest of the country have been in our LTCFs.
Let us examine the causes and effects of some of the common characteristics of for-profit LTC facilities that negatively affect the quality of care being dispensed to our seniors. Statistically, 67% of LTC in British Columbia is supplied by both nonprofit and for-profit organizations with the remaining 33% being supplied directly by provincial health authorities. The practice of sub-contracting care services occurs when service providers like LTCFs and assisted living facilities, which are contracted by regional health authorities to provide care, proceed to sub-contract with other companies that offer care workers, kitchen staff and maintenance crews.
These sub-contractors are able to bid lower than qualified unionized staff would cost, all to the detriment of the senior residents who are being served by these workers who are receiving lower wages and poorer benefits and who enjoy fewer full-time positions. The prevalence of sub-contracting in elder care began about 22 years ago, when the B.C. government, by virtue of Bills 29 and 94, stripped out no-contracting and job-security provisions from the collective agreements governing healthcare workers. These laws resulted in the loss of 8,000 jobs by the end of 2004. These laws (which were repealed in 2018) provided health-sector employers, including private LTCFs, with unprecedented rights to lay off unionized staff and hire them back as non-union workers through sub-contracted companies. Predictably, this negatively impacted wages and working conditions.
Reduced funding for and access to publicly funded seniors care, from the early 2000s, resulted in the rationing of care. This meant that access to publicly funded care is limited to those with more acute needs, leaving seniors with less complex needs without access to support services that could keep them from deteriorating and requiring institutional care. So, as staffing levels have declined, the care needs of many LTC residents have increased. More of the publicly funded services are being delivered by for-profit companies, often in LTCFs that combine publicly funded and private-pay beds. The latest data shows that more than 35% of beds are run by the for-profit companies. The health authorities pay for the services through block funding, which accounts for the direct care hours that each resident is to receive per day, and the cost of other services and supplies such as meals. There are no restrictions on how operators spend these dollars and health authorities do not perform payroll or expense audits to ensure public funds are actually spent on direct care.
A report from the Seniors Advocate exposed the fact that most direct care (67%) is delivered by care aides, the lowest paid care workers. For-profit care companies generate profits by underpaying the workers who provide most of the direct care, despite receiving funding based on the assumption they pay union rates contained in the master collective agreement (industry standard). Operators are not monitored to ensure that they are providing the number of care hours for which they are being paid. Without adequate oversight and reporting, companies also make profits by understaffing, which impacts the amount and quality of care that residents receive.
Many LTCFs have a combination of publicly subsidized and private-pay beds, but the co-located private-pay beds are not consistently included in the calculation of care hours delivered. This practice results in publicly funded care hours used to cross-subsidize the care of private-care residents who pay out-of-pocket (for the generation of greater profits) and, at the same time, exacerbates staffing shortages, as companies use the same staff to cover both publicly funded and private-pay beds, which should have their own dedicated staff.
Notwithstanding that the last period for which data is available is 2017-2018, it is noteworthy that while receiving, on average, the same level of public funding, contracted not-for-profit LTCF operators spent $10,000 more per resident per year than did for-profit providers. In addition, and not surprisingly, the for-profit LTCFs failed to deliver 207,000 funded direct-care hours while the nonprofit LTCFs exceeded direct-care hour targets by delivering an additional 80,000 hours of direct care beyond what they were funded to deliver.
Low staffing levels and resulting poor working conditions deteriorate the quality of care, as low staffing places both workers and residents under increased stress and reduces the amount of time care workers can spend with residents. The combination of low pay and understaffing makes it difficult to recruit and retain staff. There is adequate proof that staffing levels and staffing mix are key predictors of resident health outcomes and care quality, and that care provided in for-profit long-term care facilities is generally inferior to that provided by public- and nonprofit-owned facilities.
The B.C. government’s long-standing reliance on attracting private capital into the seniors care sector has benefited corporate chains with the ability to finance and build new facilities. In the decade between 2009 and 2018, British Columbia invested less than one half of one percent of the total healthcare capital spending (which is not very much money). More than one-third of all publicly subsidized and private-pay long-term care and assisted living spaces are controlled by large corporations, while the balance is owned by either nonprofit agencies or health authorities.
Corporate chain consolidation in seniors care has become popular among investors in this sector because the business is real estate-focused, resulting in care facilities being treated and traded as financial commodities. This being the case, the care chains are prone to engage in risky business practices. These chains are routinely bought and sold after using debt-leveraged buyouts, ultimately leaving the chains with debt-servicing costs that revenues, including the government funding, cannot cover, resulting in financial crisis and creating disruptions that undermine the quality of relational care due to high staff turnover.
The evidence is clear: profit-making has no place in seniors care. Public dollars are flowing into profits not into frontline care as intended.
Let us strive to provide the care and support for our parents, grandparents, siblings and others who gave us so much and for whom we care so much. Nobody should be profiting from the care of our seniors and that, dear readers, is why profit should be eliminated from long-term care.
Kenneth Levitt is a past president of Jewish Seniors Alliance, former chief executive officer of Louis Brier Home and Hospital, and a past chair of Camp Miriam. In 1985, he co-edited, The Challenge of Child Welfare, the first textbook on child welfare in Canada. Larry Shapiro studied accounting and worked at major firms as well as with the federal government. In 1977, he studied real estate and opened his own business. Since moving from Montreal to Vancouver, Shapiro has been an active member of the JSA board.