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REPORT: Investing in Care, Not Profit: Recommendations to Transform Long-Term Care in Ontario

Posted: May 20, 2021

(May 20, 2021)

A summary of the report and the list of recommendations can be found below. Click here for the full report.

Click here for media release.


**A group of nine eminent policy experts are weighing in today on one of the most urgent policy debates in our province and our country.

They are calling for urgent intervention to tip the balance and end awards of new 30-year licenses to for-profit long-term care corporations.

45,000 LTC beds hang in the balance.

Their credentials are impeccable. A former clerk of the Privy Council (Canada) and secretary to the cabinet for three Prime Ministers. A Canadian senator who is a former cabinet secretary and head of the Ontario Public Service. The former dean of nursing at University of Toronto. A lawyer who has argued a number of high-profile public interest cases to the Supreme Court of Canada. Two of the most eminent academic authors and researchers on long-term care in Canada. A senior economist. The former CEO of national health care organizations. They do not speak lightly. Today, they have weighed in on one of the most urgent policy debates in our province and in our country.

The group of nine have co-authored a report, Investing in Care, Not Profit Recommendations to transform long-term care in Ontario released today, calling for immediate intervention to tip the balance in long-term care “LTC” back over to public and non-profit ownership.

The urgency is indisputable. Within four years the licenses for 31,000 LTC beds all across Ontario are coming to an end– the vast majority of these currently owned by for profit corporations. These outdated beds have to be rebuilt to current standards. Another 15,000 new beds are slated to be built in the next half-decade. What this means is that fully half of Ontario’s long-term care spaces have to be rebuilt or built new starting almost immediately. New 30-year licenses will govern the ownership and control of these vital health services. Decisions are now being made for an entire generation of LTC in Ontario.

In fact, the Ford government has already opted to award thousands of redevelopments and expansions to for-profit homes, including the very worst of the for-profits which were responsible for appalling conditions of negligence and deaths during the pandemic.

The authors term the privatization of the majority of Ontario’s long-term care a “policy failure with fatal consequences”. They call for the awarding of all the new and redeveloped beds to public and non-profit ownership. More than that, they delineate how governments at the provincial and federal level can do this. They lay waste to any notion that it is not possible, or undesirable, to take immediate steps to build long-term care as public non-profit service.

Ontarians and Canadians alike have been horrified by the negligence of the for-profit long-term care industry in the pandemic. Across the country, people are outraged to learn that at the same time as LTC residents were left to suffer and die by the thousands in abominable conditions, for-profit long-term care companies continued to pay out profits and take extravagant bonuses. Canadians know it is wrong and it must change.

The independent authors of the report — which is being published by the Canadian Centre for Policy Alternatives today and was commissioned by the Ontario Health Coalition — give Ontarians and Canadians a path to achieve that change. We hope that it will be given the weight it deserves.

Thank you to the authors: Pat Armstrong, Hugh Armstrong, Dan Buchanan, Tony Dean, Gail Donner, Arthur Donner, Sharon Sholzberg-Gray, Alex Himelfarb, Steven Shrybman.

———–

Introduction

The evidence is clear, overwhelming and tragic: Canada has a fundamental problem providing quality long-term residential care (LTC) to those whose lives and well-being depend upon it. Although many LTC homes did not experience high COVID-19 death rates, over two-thirds of Canada’s overall deaths occurred in these homes, a ratio more than 50% higher than in other OECD countries.

This catastrophe is rooted in decades of underfunding and neglect, as the recent reports by Ontario’s Auditor General and Ontario’s Long-Term Care COVID-19 Commission (the Commission) have laid bare. Addressing these problems will require comprehensive reform: increased government funding, reduced wait lists, better standards of care and staffing, effective enforcement, and far less contracting out. Crucial to success, as the Commission rightly acknowledges, will be limiting the profit motive in delivering this essential service.

In Ontario, the large majority of LTC homes are owned or operated by for-profit corporations, a far higher proportion than in any other province.  COVID-19 deaths in these homes were nearly double the average in not-for-profit homes and almost five times higher than those in homes owned by municipalities. As the Auditor General documents, as of Dec. 31, 2020, among the 15 long-term care homes with the highest number of resident deaths, 13 were operated by for-profit entities.

The dominant position of for-profit LTC in Ontario is a direct consequence of policies designed to attract and support private investment in the sector. This is a fundamental policy failure and one with dire consequences, as we have learned. Profit has no place in the delivery of publicly funded and necessary health care services. As the Commission states: “Care should be the sole focus of the entities responsible for long-term care homes.”

The Commission has now set out a substantial reform agenda for increasing the availability and quality of LTC. For these reforms to be effective, the incentives of LTC operators must align with the priority of achieving the highest quality of resident care. That will not be the case with respect to for-profit LTC companies, whose fiduciary obligation is to shareholders rather than citizens or those who depend on their services.

The Commission only goes part way towards a lasting solution. It rightly recommends moving to publicly operated homes, but allows an operational role for certain “mission driven” for-profit providers. In our view, such an ethical test isn’t a feasible nor enforceable regulatory standard. The simple option for a company with a “sole focus” on resident care would be to transition to not-for-profit corporate status.

The Commission also—and, in our view, mistakenly—concludes that the cost of renewing and expanding LTC homes is such that the province must look to private capital to fund the sector. Under the current funding regime, funding for LTC infrastructure is drawn from the public purse. The question isn’t whether the province will be paying for LTC homes but, rather, how much. Whatever the short-term benefits of public-private partnerships, they should be weighed against their longer-term risks and cost.

When properly accounted for, it is clear that public ownership and non-profit administration will, in the end, cost provincial taxpayers far less and result in LTC homes that provide a much better standard and quality of care. While government may confront short-term fiscal challenges, historically low interest rates make this a particularly opportune time to renew public infrastructure, including LTC homes.

Recommendations

The terrible toll of the COVID-19 pandemic on LTC residents has brought us to a critical decision point, one that provides an opportunity to correct the policy and structural failures that are at the root of the current tragedy and to do so in a balanced, phased and fiscally responsible way. Accordingly, we recommend that:

1. The province commit to proceeding with an orderly and phased reduction of for-profit LTC, whether in homes owned or operated by such companies. While broad reforms are clearly necessary, a significant reduction in for-profit care will be essential to success.

2. New licenses for 30,000 LTC beds, which the province has committed to, be allocated entirely to the non-profit sector—municipalities, hospitals, other public entities, and not-for-profit providers.

3. Both levels of government remove the impediments that now limit or prevent not-for-profit and municipal LTC providers from accessing the funding required to build, or rebuild, LTC homes.

4. The province create an independent agency, with a mandate and resources to provide non-profit homes with the capacity they need to efficiently manage the financial and operational demands of providing high quality LTC.

5. The province establish an independent task force to take up the Commission’s recommendation that it: “…urgently implement a streamlined expedited approval process for creating redeveloped and new long-term care beds that accommodates the participation of existing and new not-for-profit and municipal licenses…”

6. The federal government pass LTC legislation that recognizes that LTC is necessary health care and commits to ongoing funding for these essential services.

Click here for the full report

Click here for media release