For-profit homes fail to deliver on direct care funded by the public, B.C. seniors advocate says

A new report from B.C.'s seniors advocate is raising serious questions about how for-profit long-term care homes are spending public money.

The report, released Tuesday morning, suggests for-profit operations aren't delivering on the level of care they're contracted to provide at the same time they're underpaying employees and over-investing in construction.

Seniors advocate Isobel Mackenzie said her findings highlights the pressing need to make all revenues and expenses of publicly funded care homes available to the public.

"This is a lot of public money, and I think the public is entitled to see how it's being spent because it's supposed to be getting spent to provide care for people in long-term care homes," she told CBC.

The long-term care sector receives about $1.3 billion from the province every year, according to Mackenzie. On average, for-profit and nonprofit care homes receive about the same amount from the province.

But in the 2017/18 fiscal year, B.C.'s for-profit care homes failed to deliver 207,000 hours of care for which they received public funding, Mackenzie said. Non-profit homes, on the other hand, over-delivered by about 80,000 hours.

Overall, the nonprofit sector spends about 24 per cent more per resident per year on direct care — or about $10,000 for each resident.

"The not-for-profits are putting more money into direct care, the for-profits have more money in profit. They have 12 times the profit that the not-for-profit sector generates," Mackenzie said. 

The report reviewed revenue and expenses between 2016 and 2018.

Low wages in the for-profit sector

For-profit care homes are also paying their workers less on average than their counterparts in the nonprofit sector, the report reveals.

"We have operators who are paying up to 28 per cent less than the industry standard — and they're funded to pay the industry standard," Mackenzie said.

That means wages that are nearly $7 an hour or $13,000 a year below standard, she added.

That might result in these care homes hiring less experienced workers and seeing quicker staff turnover, all of which could affect the quality of care that residents are receiving.

The one area where for-profit care homes are outspending non-profit operators is in capital building costs. Mackenzie said the for-profit sector is expensing about 20 per cent of revenue on construction, compared to about nine per cent in the not-for-profit sector.

"This is not fair," Mackenzie said. "For-profit operators are getting paid for the use of their building through capital building costs, and they're making the profits."

She said these findings left her concerned about whether British Columbians have all the information they need about how public money is being spent. No one, according to Mackenzie, is asking whether B.C. is being expensed for the fair market value on the buildings.

"We are paying mortgages for buildings we don't own, and the people who own those buildings can sell those buildings, leverage those buildings — whatever they want," Mackenzie said. 

Although the findings from the report may come as a shock to the public, Jennifer Whiteside, the secretary business manager with the Hospital Employees Union, says, for her members who work in long-term care, it's nothing new.

And she says the wage gap has led to a recruitment and retention crisis in the industry, which in turn affects seniors.

"It's beyond time for us to be returning this sector to a coherent system where there are standards across all operators of long-term care," said Whiteside.

"The system is broken, and B.C. seniors and those who care for them are paying the price."

'Openness and transparency'

Her report makes several recommendations for addressing the problems she's identified

First and foremost would be implementing a system ensuring all of the public funding for direct care of residents is actually spent on direct care, and that any surplus would be returned to the province.

That would require more accurate and standardized monitoring of how these care homes are spending their money.

And all of that information needs to be made public, according to Mackenzie.

"We need that openness and transparency of that kind of public reporting to give us the confidence that what we want to be having happen with our money is happening with our money," she said.