Some corporate-owned, long-term care homes in B.C. are getting money for nothing, while not-for-profits may be getting less than they need for their services to be sustainable.
But the bottom line is that the losers are both vulnerable seniors and taxpayers who are footing the $1.3-billion annual bill.
To be clear, it may be unconscionable, but for-profit operators who run a third of all the long-term homes and beds in B.C. are not breaking any rules. Just as it’s fair to assume that not-for-profits, who account for another third of the total, aren’t deliberately leaving money on the table.
The problem is that the system is broken.
Patients and their families have been complaining for years. On Tuesday, B.C. Seniors Advocate Isobel Mackenzie clearly set out the evidence in her report, A Billion Reasons to Care, which comes within a few months of Island Health taking over three privately operated homes.
Mackenzie’s funding review is a scorching indictment of the government’s failure to properly manage one of the largest contracting relationships it has with service providers. To some extent, Mackenzie said, the government is handing long-term care operators blank cheques.
She said the rules haven’t kept pace with the fundamental shift in government procurement policy that began 20 years ago when long-term care was contracted out to private operators who were then allowed to opt out of the Health Employers Association of B.C., which once bargained on behalf of all publicly funded, health-care employers.
Rules are non-existent, vague or not uniformly applied. Direct care hours, for example, aren’t necessarily separated out from the hours that care aides spend on food service or housekeeping. Financial monitoring is scant with no requirement for detailed or audited reports.
In 2017-18, for-profit operators failed to deliver 207,000 hours of care for which the B.C. government paid them. Were they fined? No. They got to keep the money.
Meantime, not-for-profit operators delivered 80,000 hours of care more than they were contracted to provide. Those extra hours were paid for either by lower costs in another area or by other funding sources.
It is true that all operators face a staffing crisis that Mackenzie describes as being of epidemic proportions, with nearly 90 per cent of care homes not able to meet minimum staffing guidelines.
But it’s partially self-inflicted. For-profit operators’ wage costs for each hour of direct care is lower across all classifications than the costs at not-for-profits and the homes run directly by health authorities.
Some for-profits are paying care aides, who provide two-thirds of the care, nearly a third less than the industry standard, which works out to $6.63 an hour. Part of the difference is that for-profit operators are more likely to hire part-time rather than full-time workers, which eliminates the need to pay benefits.
Raise the salaries, says Mackenzie, and workers will follow the money.
The government and health authorities should also follow the money. Rather than setting a minimum wage or requiring that all operators pay the industry standard, Mackenzie says to simply end the incentive to not deliver the care. If operators didn’t deliver 207,000 hours of care, they should have been required to give that money back.
But there are no penalties in any of the contracts. Don’t deliver and, ka-ching!, the bottom line suddenly looks a lot better as taxpayers’ money transforms into shareholder profits.
Disturbingly, Mackenzie found that contracts varied both between and within health authorities.
“All spoke to delivery of care,” she said Tuesday. “But none specified the type of care. None outlined any legal requirements to provide the care. And none had explicit penalties for non-compliance.”
Every health authority also had different reporting systems. Different ones allowed expenses to be claimed differently. There were also anomalies between the profit and non-profit operators, including for-profits having surpluses 12 times higher and profits three times higher.
The health authorities allowed for-profit operators to claim building expenses at 20 per cent of their revenues compared to the not-for-profits’ nine per cent. They also allowed mortgage interest rates considerably higher than market rates, double the depreciation rates, unexplained lump-sum payments to contractors working for affiliated companies, unspecified management fees in addition to administrative expenses that are higher than non-profits.
One concern Mackenzie has about non-profits claiming lower building expenses is that they will not be able to upgrade their facilities as they age, meet any new accessibility requirements that may be required, or expand to meet the tsunami of demand from an aging population.
It all needs to change and change quickly before even more public money is funnelled into corporate profits at the expense of vulnerable seniors who aren’t getting the care they need and deserve.