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Supplement
No. 19May 30, 2020
Discussion of
Alternatives
The Need for a New Direction
for the Economy
• The Necessity for a Credible Public Authority
• Increase
Investments in Seniors' Care and Other Social Programs! Increase
the Value of the Capacity to Work of the Working Class!
- K.C. Adams -
• Time to End
Profit-Making in Seniors' Care (Excerpts)
- Canadian Centre for Policy
Alternatives -
Discussion of Alternatives
The pandemic has made it clear that a new direction is
needed in the care of seniors and the health care sector
generally. In order for that to happen, the most urgent need is
for a credible public authority.
 1. A credible public authority is necessary
in order for the people to participate in setting the direction
for the economy. For a public authority to be credible,
legitimate and accountable in the modern era it must have a
direct connection with the working class. Having a direct
connection with the actual producers relates to the important
issue of who decides the direction of the economy. In the
seniors' care, health care and education sectors generally, a new
form is needed to lead them and their public enterprises.
A public authority consisting of elected members from the
seniors' care workforce, seniors themselves and
those concerned with their well-being is required. Such an
organization would be a victory resulting from the mobilization
of the workforce and activation of the human factor/social
consciousness.
Workers directly involved in the health care sector and
education sector for example, must have forms and mechanisms to
discuss, exchange views and decide the direction of the sectors
and the workings of the public enterprises they control and their
relations with other enterprises, sectors and the society and
economy as a whole.
New mechanisms must be created on the basis that there are those who are
charged with the social responsibility for the direction of the
sector and its public enterprises and budgets. Those put in
charge by the people would ascertain the amount of increased
investment needed to raise the level of care, and engage in
constant enforcement of regulations and compliance with them and
the rules regarding care and working conditions. All discussions,
decisions and reports of the public authority must be entirely
open and transparent and available on television, the Internet
and in written form.
2. Public seniors' care enterprises should be created that have
uniform high level care for all seniors, including those in long-term care
living facilities or receiving home care. No private profit should be
allowed in any aspect of health care and seniors' care that
receives any public money. This includes the creation of pharmaceutical and other health supply
public enterprises or the transformation of for-profit enterprises to public enterprises, if
they wish to continue to sell to the public sector. All
added-value from the production in public enterprises in the
health care and seniors' care sector should go back into improving
health care generally.
3. Public colleges should train seniors' care workers in all
aspects of care for seniors at the highest available level of
knowledge and practical experience and expertise. All those
wishing to work in the sector should be given free education and
a living stipend to take courses to prepare them for the work of
caring for seniors. The public colleges should be charged with
the responsibility of collecting information from workers in the
sector and from scientific studies on the highest level of care
for those in need. This is particularly important in dealing with
the issue of cognitive decline in seniors and how to combat
it.
4. Pay for seniors' care workers and their working conditions
should be at the highest level with no exceptions. The pay and
working conditions should be set and monitored by the unions and
collectives of health care workers, in discussion with the public
authority, ensuring they never fall below what is considered a
Canadian standard.
 5. Family physicians refer seniors or even non-seniors, if the
need arises, for assessment for possible inclusion in long-term
and home care and the necessary level of that care. A collective
of professionals and other workers from the long-term care sector
should be responsible for the assessment and placement of
patients. The collective would aim to limit how long a patient must
wait for assessment and placement. This group could use its own
information and that of others in the sector on the needs of
the sector for additional beds and other resources, including
buildings and supplies.
6. The value produced in the health care sector, including
seniors' care, should be fully accountable and realized (paid for)
in the broader economy and its enterprises. A price of production
for seniors' care and health care generally should be determined
through the use of a modern formula. The price of production for
health care, including seniors' care, in producing a healthy
working people and caring for them in retirement must be realized
(paid for) on a prorated basis by the public and private
enterprises in the economy over a certain size. The health care
payment should go directly to the public health care enterprises
established under the elected public authority of health care
workers and others and not through a government budget. The
budgets for the various public enterprises and sub-sectors within
the health care sector should be set by the workers themselves
and their collectives and verified through public discussion and
the elected health care public authority of the health care
workers and others. The money received should come to the public
enterprises through the provincial health care authority and not
through the provincial, federal or Quebec governments.
7. The regulations and rules governing the health care and
seniors' care sector and the working conditions should be set
through public discussion and agreed to by the elected public
authority, collectives of health care workers and individuals.
The public enterprises must be fully accountable for following
the agreed upon regulations and rules regarding the care of
seniors and working conditions and be transparent in reporting
any violations and remedies required. All public enterprises in
the health care and seniors' care sector must issue annual public
reports that detail their operations, plans and needs for the
coming year and foreseeable future, including increased
investments.
 8. The increased investments needed for social programs should
be determined by the workers themselves and their public
authority in all the various sectors including, importantly, care
for seniors. The workers in every sector, their elected public
authority and unions should be responsible for determining any
increased investment needed, which would be in addition to the
realized value from the sector.
Any funds needed for increased investment beyond what the
sector and sub-sectors receive in realized added-value directly
from other enterprises in payment should be borrowed from a
public bank and not from private sources. The guarantee of return
of the loan for the increased investment comes from the potential
increased realized value arising from the expansion of the
service. Any loans must come from a public bank such as the Bank
of Canada or other newly formed public banks and not from private
sources. The issue of public banking must also be on the agenda
when discussing an alternative direction for the economy.
- K.C. Adams -
The crisis in long-term care homes has exposed the lack
of investment in social programs for the elderly necessary to
guarantee their well-being. The dire situation demands increased
investments in social programs directed at seniors but also in
health care and education generally. The aim is to guarantee the
right of all to the care and social programs the people require
in all phases of life, including in childhood before
entering the workforce and in old age.
The investment in care for the elderly is connected with the
value of the capacity to work under imperialism and the claim of
the working class on the value it produces, specifically social
reproduced-value. The imperialist oligarchy deprives the working
class of its rightful claim for social reproduced-value as the
claim exists in contradiction with the expropriation of new value
as private profit.
 Improving the lives of the retired means the economic value of
the capacity to work of the working class as a whole becomes
greater. The improvement in the quality of life when retired
increases the claim of the working class on the value it produces
thus reducing the amount of new value the imperialist oligarchy
can expropriate.
The imperialist oligarchy stands opposed to any improvement in
the economic value of the capacity to work of the working class
that is not necessary within the imperialist economy. The
oligarchs seek to cheapen all social programs that do not improve
the employability of the working class while finding ways to
organize those that do, such as education, in a way that does not
reduce their expropriation of added-value for private profit or
damage their war economy.
The imperialists face a dilemma. They need educated and
healthy workers but any improvement means an increase in the
value of workers' capacity to work. How to solve the dilemma has
been an aspect of why public and semi-public social programs came
into being.
The imperialist oligarchs have created semi-public education
and health care as means to lessen the burden of paying for them
on the oligarchs as a whole yet make educated and healthy workers
available for employment. This does not mean that those who work
in public and semi-public education and health care do not
produce as much new value as if they were working in completely
privatized enterprises of the same level. The public and
semi-public social programs hold two advantages for the oligarchs
as a whole: the full price of production to educate and look
after the health of workers is not paid by the oligarchs as the
funding comes from taxes of which the biggest companies pay very
little, and the oligarchs do not have to realize (buy) directly
the higher value of the capacity to work as it is reduced by the
amount of added-value the public social programs do not
expropriate.
Public workers in most social programs in public and
semi-public enterprises produce enormous new value of which they
claim a portion as reproduced-value. Wages are the individual
portion of the reproduced-value and social programs are the
social portion. The working class claims the individual and
social reproduced-value as its portion of the new value it
produces while those who buy their capacity to work expropriate
the rest as added-value or profit. The trick with public social
programs is that the added-value or profit is not directly
expropriated but transferred indirectly to the imperialists who
buy the capacity to work of educated and healthy workers, at
least part of it.
Public and Semi-Public Enterprises
The imperialist oligarchy as a whole does not pay the full
price of production for what workers produce in public and
semi-public enterprises. They skirt this economic responsibility
by hiding behind general taxes as the form of revenue needed to
fund most social programs. Working people and small and
medium-sized businesses pay the vast majority of taxes to realize
the value from public and semi-public enterprises while big
business mostly avoids paying anything.
By not paying directly the full price of production for what
public workers produce and mostly avoiding taxes, the ruling
imperialist elite and their global private enterprises
expropriate indirectly the added-value portion of the new value
public workers produce through social programs and the public and
semi-public enterprises.
This added-value exists as the capacity to work of educated
and healthy workers or as cheap fixed infrastructure such as
bridges, roads, mass transit etc and socially produced
circulating value such as electricity or postal services, which
the oligarchs buy at "preferred industrial rates."
The imperialist oligarchs receive the full value from publicly
produced infrastructure and social programs and the increased
value of the capacity to work of the workers they employ but do
not fully pay the price of production for the infrastructure or
the socially produced portion of the capacity to work of the
working class. The difference between the price of production and
what the imperialists and their enterprises pay and what they
should pay is expropriated as indirect private profit.
Expropriation of Added-Value from Programs to Care for the
Elderly
Workers in public social programs to care for the elderly
produce new value, which includes the reproduced-value they claim
as wages, benefits and social programs, and the added-value the
oligarchs expropriate indirectly as profit. The public and
not-for-profit long-term care homes pass on much of the
added-value workers produce to the general economy where both
public and private enterprises expropriate it as indirect profit.
This occurs indirectly because the public and private enterprises
in the economy do not directly pay the price of production
arising from the work-time involved in caring for the elderly.
The social reproduced-value of seniors' care forms part of the
aggregate value of the capacity to work of the working class.
Within the social relation between the working class and the
not-working class that buys its capacity to work, the working
class is available to work and the not-working class is supposed
to pay the full individual and social value of workers' capacity
to work, which includes seniors' care.
Privatization of Social Programs
When a social program is privatized, which is the case with
the numerous privately owned long-term care homes and home care,
the individual owner of the privatized service expropriates as
added-value or private profit a portion of the new value workers
produce. This means the full price of production for the
privatized social program must be realized. The government
generally pays the majority of the price of production while the
elderly and their families pay the rest as user fees.
Privatization of social programs has the effect of indirectly
reducing the amount of added-value or profit the imperialist
oligarchy as a whole expropriates from social programs at least
those that do not directly profit from privatized social
programs. It also increases the price of production if the level
of the social programs is maintained as before the government did
not pay for the added-value, which is now expropriated by the
private owner. The full amount of the price of production must be
directly paid to the owners of the privatized social programs,
which the government pays. The fact that the full price of
production for the privatized social programs must be paid has
the effect of concentrating the expropriated added-value in a few
hands while depriving the rest of the imperialist oligarchs from
indirectly receiving any of the value.
 The oligarchs in control, which do not profit directly from
privatized social programs accept the privatized situation
because the imperialists that have intruded on social programs
are extremely powerful but also they can force a reduction in the
value of the privatized social programs to reduce the amount of
social reproduced-value the working class can claim. According to
the many recent reports of how bad the situation has become in
many long-term care homes and in home care, the level of care has
been drastically reduced. A similar situation exists in public
education, which is facing a lowering of quality such as
increased class sizes and other issues.
Faced with the situation, the imperialist oligarchy can and
does call for the elimination of privatization as an option and
to revert to public or semi-public delivery of social programs. Up
to this point in the imperialist world, including Canada, the
working class has not intervened forcefully with its own view and
outlook but has been led to discuss only the options the ruling
oligarchs have presented regarding the direction of social
programs. This is a situation the organized working class must
change.
In BC, almost all the money to pay for privatized long-term
care homes and home care comes from the government. The
individual owners of the privatized service, through their private
enterprises, directly expropriate added-value from the new value
their workers produce. In this situation of privatized long-term
care homes and home care, in contrast with the previous situation
of public enterprise, either the level of service must go down or
the government must now pay more for the service as the
individual owners expropriate the added-value directly. If the
service is kept at the same level and the individual owners
directly expropriate added-value as private profit, this means the
price of production of the service is fully paid mostly by the
government and none of the added-value workers produce flows to
those imperialist oligarchs not directly involved in delivering
the privatized social programs.
The privatized social program at the same level of service
means the government pays more, as the full price of production
is required because the individual owner of the privatized
service expropriates profit. This in fact leaves less public
money available for other programs while putting pressure on the
government to increase taxes.
In contrast, a publicly-owned long-term care home or home care
does not directly expropriate the added-value. At the same level
of service, the price paid by the government is lower and the
added-value from the service flows into the general economy
mainly as part of the value of the capacity to work of the
working class that is not paid. This phenomenon explains in part
why the imperialist oligarchs created public and semi-public
education, health care and other social programs in the first
place. They needed more educated and healthy workers and public
social programs appeared as the best option on a mass scale.
However, productive forces develop and change, for example the
introduction of computers and the Internet, and the tendency of
parasitism and decay is ever-present, seizing greater parts of the
imperialist economy. Powerful new imperialist cartels, which
appear as global funds, roam the world seeking out places to
invest, such as social programs and public infrastructure. In
addition, new global cartels of immense social wealth -- such as
Microsoft, Sodexo, Aramark and Compass Group -- have
directly invaded public and semi-public enterprises, even prisons in
the United States. Waste Management and other green imperialist
monopolies have grown to challenge public delivery of social
programs, such as city waste removal, and want to expropriate as
their own the added-value that workers in the social service
sector produce. They do not want to have it flow to the collective of
imperialists and their enterprises, which have hitherto
indirectly profited from social programs and their production of
the capacity to work of the working class for which they have not
paid. The imperialists privatizing social programs and
infrastructure want governments to pay the full price of
production to them for the privatized social programs, even if
this means higher taxes or less public money for other programs --
unless investments in social programs are lowered, which in fact
has occurred. However, the privatized services face pushback from
others in the imperialist oligarchy who want to organize social
programs differently so that they can expropriate the social
product indirectly and also quell any uproar from the working
class.
The Office of the Seniors' Advocate in BC, in a report dealing
with the operations of long-term care homes entitled A Billion
Reasons to Care, found that usually the level of care goes
down when privatized, if funding is kept the same as before. To
bring the level of privatized service up to where it was before
privatization requires more government funding. The increased
money must come from the aggregate new value the working class
produces, usually as new taxes on them or on small and medium-sized companies or from government borrowing from private
lenders, which has become a lucrative source of guaranteed
profit.
However, increased funding for privatized social programs
usually means more added-value as expropriated private profit by
the enterprises involved, and does not allow any added-value to
flow indirectly to the imperialist oligarchy as a whole, and can
also mean a degrading of the overall health and education of the
working class and its employability. In Canada and the U.S., this
has been papered over with large numbers of educated immigrants
coming into the workforce, stolen for nothing from developing
countries.
At any rate, a dispute exists within the ruling elite over
privatization of public services, with many opposing such a move
as it means profit from the social programs goes to particular
owners of the service rather than to the imperialist oligarchy as
a whole. Generally, the working class is a spectator to this
debate, either for or against privatization of public services, and
does not forcefully present its own views or an alternative that
favours working people.
Within the dispute whether to have social programs delivered
as fully public enterprises, not-for-profit charity enterprises,
or private enterprises, the subject is rarely broached as one of
guaranteeing the rights of all to health care, education and a
cultured standard of living and care for the elderly at the
highest level the productive forces can deliver. The dispute
generally circulates around the issue of "cost" to the
imperialist oligarchy and who profits and how best to keep
spending on the working class as low as possible so that the
price of their capacity to work is likewise as low as possible,
expropriated private profit remains as high as possible, and yet the
working class and its capacity to work remains available at an
appropriate level.
How to Pay for Social Programs
To function, a modern economy and society need a high level of
social programs. It is important to discuss the issue of realizing (paying for) the value
workers produce in those programs and to
formulate a pro-social alternative that favours the people.
The working class has to break out of the anti-social
discussion of the ruling oligarchs. It must force through its view for
increased investments in social programs and that the socialized
economy as a whole, which includes all its individual
enterprises, must pay the full price of production for the
capacity to work of the aggregate healthy and educated working
class and its reproduction and existence from birth to passing
away at the highest possible level given the existing productive
forces. The working class as a whole is always available to work
so its reproduction and existence and rights from birth to
passing away must be guaranteed.
 History has shown that the right to health care and education
and care for the elderly cannot be guaranteed outside of public
enterprises and with the economy and its enterprises directly
paying for the produced value of social programs. Using public
enterprises to solve the problem cannot be separated from the
issue of increasing investments in social programs to bring them
up to a cultured and sustainable standard for all and forcing the
other parts of the economy and enterprises to pay the full price
of production of the capacity to work of the working class. This
would increase the aggregate value of the capacity to work of the
working class and the amount it can claim on the value it
produces, the reproduced-value.
The mechanics of how to pay for the full value of the social
programs that increase the value of the capacity to work of the
working class from the value workers produce in the economy can
be worked out on a prorated basis for each enterprise; that is
not a problem. The problem is how to organize this and enforce
it. What new alternative forms and mechanisms are necessary for
the working class to realize its rights and to decide these
matters, such as the standard of living of workers generally, and
to enforce compliance with them? Forcing the imperialist
oligarchy to agree to such a necessity to guarantee the rights of
all working people is the order of the day and task of the
organized working class. This requires a broad front of struggle
to increase investments in social programs and raise the quality
of life of the working class and guarantee the rights of all,
including importantly the rights of seniors and children. How to
accomplish this in practice with new forms needs to be discussed
and concretized. It can be done!
- Canadian Centre for Policy Alternatives -
Excerpts from the report by Andrew Longhurst and Kendra
Strauss writing for the Canadian Centre for Policy
Alternatives.
The coronavirus pandemic has shone a light on serious problems
in Canada's seniors' care system, as nursing homes quickly became
the epicenters of the outbreak. These problems are not only due
to the greater vulnerability of seniors to the disease, but also
to how care is organized and staffed.
[...]
How did these vulnerabilities in eldercare come about? Going
into the crisis, our system has been weakened by policy decisions
beginning in the early 2000s that:
- Reduced access and eligibility to publicly funded care;
-
Produced vulnerabilities and gaps that are impacting seniors and
those who care for them; and,
- Encouraged profit-making
through risky business practices such as subcontracting, which
undermined working conditions and created staffing shortages.
A System Already Under Stress
Long-term care facilities (LTCF) are at the centre of COVID-19
outbreaks in BC and beyond. In our province (BC) about two thirds
of long-term care is delivered by non-profit organizations and
for-profit companies, with the remainder provided directly by
health authorities. The most severe and widely reported outbreak
has been at the Lynn Valley Care Centre in North Vancouver.... In
a recent CBC report on conditions at the Lynn Valley Care Centre,
Jason Proctor wrote:
In interviews with CBC News, family members, health-care
professionals and community members spoke about the march of a
virus that has moved through the facility in much the same way it
has through the world, preying on vulnerabilities that seem
obvious in hindsight: Reliance on a subcontracted labour force
whose members... work multiple jobs to make ends meet. Gaps in
communication. A societal reluctance to talk about the basics of
hygiene.
Sub-contracting is also identified by the Globe & Mail
in their investigation of how COVID-19 spread at the Lynn Valley
Care Home. Sub-contracting seniors' care occurs when service
providers (e.g., home support agencies, LTCFs, assisted living
facilities) contracted by regional Health Authorities to provide
care then sub-contract with other companies for services such as
direct care, cleaning, cooking or maintenance. Contracts are
often awarded on the basis of lowest cost, which translates into
lower wages, poorer benefits and fewer full-time positions.
Long-Term Care Facilities (LTCFs) Are at the Centre of
Covid-19 Outbreaks in BC and Beyond
The prevalence of sub-contracting in the eldercare sector is
no accident. In 2002 and 2003, the BC government introduced Bill
29 and Bill 94, which stripped no-contracting out and job
security clauses from the collective agreements of health care
workers and resulted in more than 8,000 job losses by the end of
2004. Together, these laws (which were repealed in 2018) provided
health sector employers, including private LTCFs, with
unprecedented rights to layoff unionized staff and hire them back
as non-union workers through subcontracted companies. Bill 37
also followed in 2004, which imposed wage roll-backs on more than
43,000 health care workers.
The results were predictable. As CCPA research has
demonstrated, policies and legislation enacted during this period
negatively impacted wages and working conditions while also
reducing funding and access to services.
A lack of successor rights for unionized workers meant that
subcontracting (often called "contract-flipping") was used to
make union organizing more difficult. For example, the number of
unionized community health workers (three quarters of whom work
for home support agencies) declined almost 10% between 2008 and
2011, before increasing by about 2.5% from 2008 levels by 2013.
The number of unionized care aides declined by over 5% between
2008 and 2011, before increasing again slightly by 2013 (for an
overall decline of 3.8% between 2008-2013).
Reduced funding for, and access to, publicly funded seniors'
care from the early 2000s resulted in the rationing of care.
Rationing means that access to publicly funded care is limited to
those with more acute needs, leaving seniors with less complex
needs without access to supports that might prevent deterioration
and keep them from needing institutional care. For example, data
show that among those aged 65+ who were assessed by Vancouver
Coastal Health for long-term care intake between 2011/12 and
2015/16, the proportion of seniors requiring extensive or more
physical assistance rose from 49.6% to 54.6%, and moderate to
severe cognitive impairment increased from 52.1% to 57.1%. So as
staffing levels have declined, the care needs of many residents
have increased.
Reduced funding for, and access to, publicly funded seniors'
care from the early 2000s resulted in the rationing of care.
At the same time, more of those publicly funded services are
being delivered by for-profit companies, often in LTCFs that
combine publicly funded and private-pay beds. As a recent report
by the BC Seniors Advocate highlighted, prior to 1999, 23% of
beds were run by for-profit companies; by 2019 it was 34% of
beds. Health authorities pay for the services provided by LTCFs
through block funding which accounts for the direct care hours
that each resident is to receive (currently a provincial
guideline of 3.36 hours per resident 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.
Shockingly, the Seniors Advocate's report found that:
- Most direct care (67%) is delivered by care aides, the
lowest paid care workers. Health authorities calculate the costs
of care on the basis of the master collective agreement, which
covers unionized direct care workers. Yet, LTCFs and their
sub-contracted companies are not required to pay the rates set
out in that agreement. The report states that: "In 2017/18, the
industry standard base wage rate for a care aide was $23.48/hour.
Some care aides were paid as much as 28% less based on the lowest
confirmed wage rate of $16.85/hour, which was found in a
for-profit care home". In other words, care companies make
profits by underpaying the workers who provide the majority of
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 they are being paid for.
Without adequate oversight and reporting, companies thus 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 these facilities' calculation of
delivered care hours. As a result, publicly funded care hours may
be used to cross-subsidize the care of private-pay residents who
pay out-of-pocket, allowing greater profit-taking from
private-pay beds and exacerbating staffing shortages as companies
use the same staff to cover both publicly funded and private-pay
beds (when private-pay beds should have their own staff
complement).
- While receiving, on average, the same level of public
funding, contracted non-profit LTCF operators spend $10,000 or
24% more per year on care for each resident compared to
for-profit providers. In just a one-year period (2017/18),
for-profit LTCFs failed to deliver 207,000 funded direct care
hours, whereas non-profit LTCFs exceeded direct care hour targets
by delivering an additional 80,000 hours of direct care beyond
what they were publicly funded to deliver.
These are significant issues in their own right. Care workers
are being underpaid relative to the funding that operators
receive. But even if we are unconcerned about fairness, low
staffing levels are not conducive to quality care.
Data from the 2013 Statistics Canada Long-Term Care
Facilities Survey showed that although for-profit companies
outnumbered public and non-profit providers in the survey, they
reported spending less on care aides, licensed practical nurses
and other health care staff, and less on dietary, housekeeping
and maintenance workers. Low staffing places both workers and
residents under increased stress and reduces the time carers have
with residents. And as the BC Seniors Advocate report points out,
low pay and understaffing are a vicious circle -- they make it
difficult to recruit and retain staff, while operators that
employ staff directly (no subcontracting) and pay higher wages do
not experience the same kinds of shortages.
We need only look to the four LTCFs that are part of the
Retirement Concepts chain (owned by the Chinese company Dajia
Insurance, the successor company of Anbang Insurance Group) to
see these dynamics at work. Regional health authorities in recent
months have taken over management of these four Retirement
Concepts facilities and brought in their own nursing staff due to
persistent shortages that were compromising resident care and
safety.
A key reason for staffing challenges is that many LTCF staff,
namely care aides, must work more than one job in order to make
ends meet. While the provincial government committed to review
contracting and sub-contracting in the sector after the crisis,
the newly-announced single-site order, increasing wages to the
industry standard, and guaranteed full-time hours at one site are
as-yet only guaranteed for six months.
Risks Associated with For-Profit Ownership and
Financialized Corporate Chains
A large body of academic research demonstrates 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 non-profit-owned facilities. High staff turnover,
which is linked to lower wages and the heavy workloads demanded
by inadequate staffing levels, is associated with lower-quality
care in large for-profit facilities.
The BC government's longstanding reliance on attracting
private capital into the seniors' care sector has benefited
corporate chains with the ability to finance and build new
facilities. Between 2009/10 to 2017/18, BC only invested $37.4
million in LTCF infrastructure, and $3.3 million in assisted
living infrastructure, representing on average 0.5% and 0.04%,
respectively, of total health sector capital spending over this
period. In other words, not much at all.
By 2016, corporate chains controlled 34% of all publicly
subsidized and private-pay long-term care and assisted living
spaces in BC while 66% of units were owned by either non-profit
agencies or health authorities.
Another way to look at the significance of corporate chains is
by looking at the top 10 largest corporate chains by market share
-- i.e., the share of the total publicly subsidized and
private-pay units in BC controlled by the top 10 chains. Over
one-quarter (27%) of all assisted living and long-term care units
in BC were controlled by the top 10 corporate chains collectively
(as of 2016). Among contracted operators, Retirement Concepts
(owned by Anbang/Dajia Insurance) controls the greatest share of
assisted living and long-term care units in BC. It has 2,158
units or 7.8% market share of publicly subsidized and private-pay
units in BC -- more than double the number of units held by the
second-largest chain.
Corporate chains pose risks to quality of care. While the
growth of chains has received less attention in the health
services research in Canada, a prominent U.S. study found that
"the top 10 for-profit chains received 36 per cent higher
deficiencies and 41 per cent higher serious deficiencies than
government facilities, [with] [o]ther for-profit facilities also
[having] lower staffing and higher deficiencies than government
facilities." Studies show that staffing levels -- a key predictor
of care quality -- were already falling before the takeover by
private equity investors. Another U.S. study found that there
were no significant changes in staffing levels following private
equity purchase "in part because staffing levels in large chains
were already lower than staffing in other ownership groups."
Corporate chain consolidation in seniors' care is a reflection
of financialization in the health care and housing
sectors. Financialization occurs when traditionally non-financial
firms become dominated by, or increasingly engage in, practices
that have been common to the financial sector. Globally, there is
growing interest among investors in seniors' care because the
business is real estate focused. Seniors' care facilities are
increasingly being treated as financial commodities that are
attractive to global capital markets.
International experience -- and the unfolding Retirement
Concepts story in BC -- tells us that financialized care chains
tend to employ risky business practices. Chains are typically
bought and sold frequently using debt-leveraged buyouts,
inflating asset sales prices and leaving the chains loaded with
ever more debt until the cash flow -- dependent on government
funding -- cannot meet the debt-servicing costs. This situation
can result in financial crisis, bankruptcy, and chain failure.
The United Kingdom's largest care chain -- Southern Cross --
collapsed in 2011 as a result of these risky financial practices
and successive flips of the real estate assets to different
investors. Southern Cross's collapse created months of
uncertainty for 31,000 residents and their families -- as well as
for 44,000 employees -- until other buyers could be lined up.
The financialized business model is often structured around
short-term real estate flipping where government and taxpayers
assume the financial risk of failure. The disruption that can
result from these business practices undermines the conditions
necessary for stable "relational care" in which continuity in
staff allows care workers to know their residents and the rest of
the staff. The opposite of relational care is high staff turnover
and workforce instability, which can have a negative effect on
quality. This has been occurring at the four Retirement Concepts
facilities that were put under health authority
administration.
Rebuilding Seniors' Care in BC
The COVID-19 crisis is exposing the long-term impacts of
policies aimed at cutting costs and expanding the role of
for-profit companies in the seniors' care sector in BC. Reduced
pay and benefits and understaffing are bad for workers; they are
also bad for vulnerable older people who depend on those workers
to meet their daily needs. The COVID-19 pandemic may be
unprecedented in recent times, but its impacts are being felt in
LCTFs because of the way seniors' care has been undervalued,
underfunded, and privatized.
Policy can be steered in a different direction, however.
Over the medium and long-term, the BC government should end
its reliance on contracting with for-profit companies and
transition exclusively to non-profit and public delivery of
seniors' care.
The evidence is in: profit-making does not belong in seniors'
care. The revelation from the Seniors Advocate that contracted
for-profit LCTFs failed to deliver funded direct care hours
should be reason enough to determine that the government is
getting poor value for money by contracting with corporations.
Public dollars are flowing into profits, not into frontline care
as earmarked.
Moreover, the single-site public health order is largely a
response to the erosion of wages and working conditions in
long-term care that began in the early 2000s. In mere weeks, the
BC government is trying to rectify workforce instabilities
brought about over years of labour policy deregulation and
business practices intended to drive profits. These policy
decisions were championed by care companies and corporate chains.
And once the current crisis is over, we simply cannot return to
the status quo.
The BC government needs to move boldly on a capital plan to
start building new seniors' care infrastructure and acquiring
for-profit-owned facilities. BC's longstanding policy approach
has allowed corporations and their investors to build up large
real estate portfolios on the public dime, while receiving
generous public funding that assumes they are paying unionized
wages when many in fact are not.
The BC government said that it will cost about $10 million per
month to provide "top-up" funding to increase wages to the
unionized industry standard so that no worker loses income as a
result of the single-site order. It appears these public dollars
will flow to employers that, up to now, have not been paying the
unionized industry standard rate. Structuring the wage top-up in
this manner raises some concerns.
The top-up will go to some employers who are already funded to
pay the unionized rate. As noted above, the Seniors Advocate
found that a significant number of long-term care operators have
been funded using a formula that is based on the unionized
industry standard rate but have failed to pay their workers
commensurately. In practice, the top-up means these operators
will be rewarded for over-charging the public. Instead, they
should be compelled to pay the unionized wage rate -- without
additional funding -- and to become part of the public sector
labour relations structure (as was required of all publicly
funded operators before the early 2000s).
Topping up operators who have underpaid their workers is not a
cost-effective strategy now or beyond the current pandemic. But
neither is it tenable to suggest that these workers will get a
pay cut after the pandemic, or that they should return to
cobbling together an income through multiple part-time jobs. All
of which reinforces the need to move to consistent public and
non-profit ownership and delivery of care.
In the immediate term, there are a number of steps that the
provincial government should take:
- First, require much greater transparency, public reporting
and accountability in the seniors' care sector. This should
include implementation of the Seniors Advocate's recommendation
that public funding for direct care in contracted LTCFs must be
spent on direct care only, and to require standardized reporting
in all LTCFs (including public disclosure of audited revenues and
expenditures). These recommendations align with a recent CCPA-BC
report that looks at the growth of private for-profit seniors
care. Over the longer term, moving exclusively to non-profit and
public delivery of seniors' care addresses this problem. Public
institutions and non-profits don't have investors; any excess
revenue is reinvested into frontline care.
- Second, ban sub-contracting. The BC government rightly
repealed Bills 29 and 94 in 2018, but subcontracting continues to
undermine employment standards that are preconditions for quality
care. COVID-19 has made this very clear. The industry-wide labour
relations and bargaining model, established in the 1990s,
provided standardized wages and working conditions. This
structure needs to be put back together and, following the end of
special COVID-19 measures, existing operators should be part of
the public-sector master collective agreements if they are
receiving public funding. This was the case before the early
2000s.
- Third, in the assisted living sector, seniors in both
publicly subsidized and private-pay units need much greater
protections regarding tenancies, rents and fees as the incomes of
seniors and their families may decline significantly during the
pandemic. We know from CCPA research and CMHC data that assisted
living costs continue to rise faster than the incomes of many
low- and middle-income seniors.
- Fourth, public funds should not be used to bail out
over-leveraged corporations in the seniors' care sector. The
impact of COVID-19 on international financial markets will likely
have knock-on effects and the provincial government should be
prepared for the possible financial collapse of for-profit LTCFs.
It should be prepared to take over these facilities and
chains.
When we emerge from this crisis, there should be a public
consultation on the kind of seniors' care system we want in our
province and across Canada, drawing on lessons from the pandemic.
This should inform a comprehensive planning approach to
projecting demand and identifying appropriate transitions for
seniors across the continuum of home and community based
services.
This crisis is highlighting how the exclusion of seniors' care
from Canada's universal Medicare system, and the inconsistencies
across and within the provinces, lead to uneven conditions for
seniors, their families and workers. This unevenness creates the
vulnerabilities that we are seeing now, and the disproportionate
impacts on older people in care and those struggling to look
after them.
We have the evidence and tools to rebuild seniors' care.
COVID-19 has revealed the urgency of doing so.
Note
1. The provincial government also recently announced that the BC
Care Providers Association, a long-term care industry group --
will receive $10 million to administer an infection control
program for LTCFs. Public dollars for a government program should
be disbursed by government, not by private industry.
(To access articles individually click on
the black headline.)
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