For Your Information

"A Billion Reasons to Care" -- Report of the Office of the Seniors Advocate

Nanaimo meeting in defence of public senior's care, February 29, 2020.

On February 4, the Office of the Seniors Advocate for BC issued a 51-page report entitled "A Billion Reasons to Care: A Funding Review of Contracted Long-Term Care in BC." The report provides very important factual information about what happens to the public funds that are provided by the province to contracted care providers, both those which are not-for-profit societies and those that are private corporations whose aim is profit, most of which are part of a chain like Revera, Park Place or Retirement Concepts, each of which operate several homes in British Columbia.

The provincial government, through the five regional health authorities, owns and operates 33 per cent of the residential care beds in the province. It contracts with private operators in 174 long-term-care homes for the other 18,000 beds. Homes operated by for-profit companies make up 35 per cent and not-for-profit societies 32 per cent. The province provides funding for all long-term care facilities, a total of about $2 billion per year or which $1.3 billion goes to contracted operators.

The executive summary of the report notes the following "very significant differences in several expenditures" (between the not-for-profit and for-profit homes):

- The not-for-profit sector spends 59 per cent of its revenue on direct care compared with 49 per cent in the for-profit sector. This equals almost $10,000 or 24 per cent more per resident, per year spent on care in the not-for-profit sector.

- The for-profit sector failed to deliver 207,000 hours of funded care and the not-for-profit sector provided 80,000 more hours of direct care than they were funded to deliver.

- The for-profit sector generated 12 times the amount of profit/surplus generated by the not-for-profit sector ($34.4 million versus $2.8 million).

- The for-profit sector had high building expenses at 20 per cent of revenues compared to the not-for-profit sector at 9 per cent.

- There were 18 care homes with an annual profit in excess of $1 million and all but one was in the for-profit sector. These 18 care homes also expensed $23 million in capital building costs.

- The not-for-profit sector may not be receiving adequate compensation for its building capital given its low rate of both capital building costs and profit/surplus.

- The for-profit sector spends an average of 17 per cent less per worked hour, and wages paid to care aide staff in the for-profit sector can be as much as 28 per cent below the industry standard.
The report details some of the myriad ways in which private operators are able to use public funds to increase their profits while failing to meet even their contractual obligations to provide an agreed upon number of hours of care per resident. The report cites various ways in which the public authorities have failed to regulate and monitor private for-profit operators and ways in which the private operators have failed to meet the needs of the seniors in their care and placed impossible workload burdens on too few workers.

The conclusions reached by the Office of the Seniors Advocate in the report are basically that there are "financial incentives" in the current practices for funding in long-term care that "may be producing some unintended consequences" and that funding and financial reporting is "disjointed, unfair to the not-for-profit sector, and unaccountable to the public." The report recommends that five steps should be taken:

1) Funding for direct care must be spent on direct care. Remove the financial incentive for operations to do anything other than provide as many care hours as possible with the public money they receive to deliver direct care. If an operator can find staff who will work for lower wages than their funded rate, they should use their surplus funds to provide more hours of care or return the funding. Anything short of this will not provide operators with the incentives we need in today's labour market to ensure residents have consistent and sufficient care staff to meet their needs.

2) Monitoring for compliance with funded care hours must be more accurate. We need tighter standardized reporting for direct care hours. All beds need to be counted at 100 per cent occupancy and we need to verify self-reported working hours. Consideration needs to be given to regulation changes that will  empower licensing to monitor staffing levels similar to the current regulatory and licensing practices in licensed day care.

3) Define profit. There are a number of reported expenses that may or may not be fair and appropriate. There needs to be a decision about how to treat building capital along with management feeds, head office allocations, administrative expenses, and subcontracts with related parties. The decisions made need to be uniformly applied to all care homes in the province and to transparently demonstrate value for money to the taxpayer.

4) Standardize reporting for all care homes throughout BC. We need to be collecting the same information, using the same calculations and the same measurements, for all care homes regardless of health authority and we should report this at the provincial level.

5) Revenues and expenditures for publicly funded care homes should be available to the public. The public is entitled to know how their money is spent, in detail, and residents and families are entitled to know how many care hours are delivered by their care home.

This article was published in

Volume 50 Number 9 - March 21, 2020

Article Link:
For Your Information: "A Billion Reasons to Care" -- Report of the Office of the Seniors Advocate


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