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In July, 2008, Ontario's provincial ombudsman launched an investigation after receiving 100 complaints about the quality of the province's long-term care. Another 450 complaints came in after the investigation was announced. The report, released in December, 2010, concluded that there were "delays, inconsistencies and lack of transparency in monitoring of long-term care homes." These findings are troubling in a province where a majority of facilities are owned by private for-profit operators and almost two-thirds of new long-term beds since 1998 have gone to for-profit companies.

In most provinces, long-term care is publicly subsidized but service delivery is provided by a mix of government-run, non-profit and private for-profit organizations. Unlike hospital care, long-term care is not included under the Canada Health Act, so access to a defined set of services is not universal in Canada. Therefore, provincial governments have a range of options in the delivery models they choose to fund.

We have reviewed Canadian and U.S. research evidence on the link between ownership and care quality and concluded that contracting out care to private, for-profit facilities is likely to result in inferior care compared to the care delivered in public and non-profit facilities.

For example, one key measure of quality in residential care facilities is nurse staffing levels. Studies have consistently found that for-profit facilities have lower nurse staffing levels compared to non-profit and public facilities. Other indicators of poor care quality, such as rates of pressure ulcers or bed sores, are also found to be higher among residents in for-profit facilities.

Moreover, the evidence suggests that the greater the profit, the worse the outcomes. In one study, for example, for-profit facilities with the highest profit margin had significantly more regulatory inspection deficiencies than those in the next-lowest profit group. So what is behind this relation between profit and inferior care?

One explanation is that there is a tradeoff between the additional costs of improving quality (for example, by hiring more staff) and revenue generation. Where the pressure to make a profit is strong, quality may be sacrificed. Another explanation may be related to the greater ability of non-profit organizations to mobilize volunteers, who provide companionship to residents and raise funds for capital equipment to enhance care.

While the link between for-profit facility ownership and poorer care does not imply that all for-profit facilities provide poor care, the evidence suggests that, as a group, such facilities are less likely to perform as well as non-profit or public facilities.

One reason why some provinces are increasingly contracting residential care to for-profit facilities is their reluctance to finance the construction of new facilities by incurring debt. In order to get around this, many governments have been taking on new capital expenditures through public-private partnerships, known as P3s.

Under P3s, governments enter into a contract with a private company not only to build new infrastructure, but also to provide some or all of the services for that new facility, once constructed. The method of financing new residential care is therefore intimately linked to the expansion of for-profit delivery, for which there is now ample evidence of inferior quality. Due to the growth of Canada's aging population over the next 20 years, all provinces and territories will need to increase their long-term residential care capacity. Policy needs to be realigned with the available evidence by devising ways to expand the sector with public and non-profit options.

While ownership clearly influences quality, other policies such as mandatory minimum staffing levels with adequate funding to support these minimums and good regulation are also important.

How we take care of seniors at a time in their life when they are most vulnerable and need the greatest support is an important public policy challenge. Our decisions about financing and delivery of long-term care services will be important to ensure that seniors receive the quality care they deserve.

Margaret McGregor is a clinical associate professor and part-time health researcher at the University of British Columbia. Lisa Ronald is a researcher at the Vancouver Coastal Health Research Institute. They are the authors of Residential Long-Term Care for Canada's Seniors: Nonprofit, For-Profit or Does it Matter?, published by the Institute for Research on Public Policy.

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