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Fund non-profit care: report; Queen’s Park urged to shift support away from private long-term care residences

Posted: May 22, 2021

(May 21, 2021)

By: Joanne Laucius, Ottawa Citizen (Print Edition)

The province should make capital funding available to not-for-profit operators so they can open LTC homes, says a report by nine policy experts.

Licences for more than 30,000 LTC beds in Ontario are set to expire in 2025 and 15,000 new beds are in the works, said the report, which calls on Queen’s Park to develop 30,000 new beds as non-profit spaces.

Since the start of the pandemic, advocacy groups have demanded an end to for-profit LTC in Ontario. But the cost of converting the homes is daunting. About 58 per cent of nursing homes in Ontario are for-profit, the highest proportion of any province.

The report’s authors range from academics and lawyers to policy consultants and former senior public servant Alex Himelfarb. It was published by the Canadian Centre for Policy Alternatives, a progressive think-tank.

The report argues that the current arrangement skews toward for-profit providers and delivers a lower standard of care at a higher cost.

“The moment is right to push to get for-profit taken out of nursing homes,” said Hugh Armstrong, one of the authors.

“We need to avoid turning over new licences to for-profit,” said Armstrong, a professor emeritus of social work and political economy at Carleton University. “We have to push to make change happen. It won’t happen just because it’s a good idea.”

Ontario currently provides both capital and operating funding to LTCs. In one example, a 160-bed home in an urban centre would get a capital grant of $8.22 million from the province once construction is completed and a capital funding subsidy for the 25-year term of the licence amounting to another $36.9 million.

But ownership of the land and the building remains with the provider. It’s like the bank owning your home after you pay off the mortgage, said the report commissioned by the Ontario Health Coalition, which represents seniors’and patients’organizations, unions and health professionals.

A non-profit provider can be expected to continue to provide long-term care over the long term, but a for-profit company may find other ways to use the real estate, the authors argue.

While Ontario needs more LTC capacity, it’s cheaper for governments to borrow money on behalf of non-profit providers, Armstrong said. Private entities will eventually pass borrowing costs on to the public while holding onto the assets that public money creates.

The report recommends that the province commit to an “orderly and phased” reduction of for-profit LTC, whether in homes owned or operated by for-profit companies.

Financing capital costs is a major obstacle for most not-for-profits because they lack the capital reserves needed to qualify for a mortgage, the report said.

The provincial Long-Term Care Commission’s final report, released April 30, acknowledged that the pandemic has “seriously undermined'” the reputation of for-profit providers. It urged the province to consider allowing investors to pay the upfront costs of building nursing homes while allowing “mission-driven” entities to run them.

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