Long-term care homes for B.C. seniors: profit without risk

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One of the largest financial transactions between the B.C. government and the private sector every year is the $1.4-billion paid in contracts for seniors’ long-term care homes. When the province’s watchdog for seniors tried to assess if that money is well spent, she entered a murky world of accounting.

For-profit care providers, who operate one-third of all the province’s long-term care beds, have negotiated wildly different terms, but there is one consistent theme: Taxpayers have assumed most of the risk for their ventures, the province’s seniors advocate Isobel Mackenzie found.

The public pays a typical large, for-profit care home for direct care – staffing, food, housekeeping and laundry. That all makes sense. On top of that, taxpayers cover the mortgage, maintenance and repairs for the facility. Ms. Mackenzie is fine with that.

Beyond that, however, “it’s a dog’s breakfast,” she said in an interview.

“We see very opaque financing of mortgages, and financing of other things," such as administrative expenses, insurance and association dues.

“There are these great big buckets called management fees, or head-office allocations, with no detail,” she continued. "There is no rhyme or reason around how you are coming up with this amount for some care homes.”

In total, there are millions of dollars in fees that she is not certain can be justified.

The costs are chronicled in her recent report, entitled A Billion Reasons to Care. The report examines the public spending on both non-profit and for-profit facilities. She found inequities not just in billing, but in the care delivered by the two sectors. For-profit care homes failed to deliver 207,000 hours of direct care for which they were paid, while not-for-profit care homes overdelivered, spending 24 per cent more a year on care for each resident.

Ms. Mackenzie says she believes the province needs to take charge of these contracts, because each of the province’s five health authorities are negotiating complex deals with care providers without a consistent framework.

“The province has to drive it – it can’t be each health authority doing their own thing,” she said. “The province has to sit down and say, ‘Okay, here are what we are going to say are legitimate expenses in running a care home. … Here’s how we’re going to compensate in a uniform, fair, open and transparent way.'"

The for-profit sector has taken a growing share of the delivery of long-term care in British Columbia over the past 20 years because successive governments believed it would be cheaper to let the private sector meet the growing demand for more beds.

Health Minister Adrian Dix acknowledges problems in the delivery of long-term care. He’s responded by increasing funding to provide more care hours, seeking more accountability from care providers and giving residents more choice about where they will live.

If he can squeeze new money out of Monday’s provincial budget – and that is not a certainty – his priority will be to put funding into the publicly funded facilities that are aging and in need of repair. “We have got to deal with the reality that’s in front of us," he said. Ms. Mackenzie’s recommendations are worthy, he said, but added: “We also have to work with our partners who are providing the care to ensure that we make the right decisions and that ultimately, they improve care for seniors.”

Ms. Mackenzie cringes when she hears the minister describe private care providers as partners.

“One of the frustrations I’ve had is that the health authorities and the ministry keep talking about ‘our partners.’ We’re not partners. We’re regulators,” she said. “We are using public dollars to contract with somebody to deliver a public service. They are not equal partners at the table, their interests are not equal to our interests. Our interests are the public interest, and that needs to take precedence.”

The seniors advocate was not just concerned with the dollars being spent, but the care being delivered. And the inequities between the different service providers means that some seniors are getting better care than others.

“There is certainly strong evidence that in some care homes in this province, the seniors are not well served by this model," she said.

But the B.C. health-care system is increasingly dependent on those private sector providers. The facilities, of all types, are at capacity and demand is growing. Mr. Dix is not ready to dismantle the model – 30,000 beds provided roughly in equal measure by public, private and not-for-profit care providers – not because he likes it, but because he knows the provincial government is not in a good bargaining position.