Care for sale: Privatizing long-term care in Ontario

presenter(s) Justin Panos | York University


ABSTRACT

The marketization of long-term care has been a recurrent issue in Ontario. With about 630 homes and over 77,000 beds, over half of the sector is controlled by private for-profit companies. Over the last four decades, the consolidation of ownership has resulted in the rise of five distinct corporate care chains. These chains own between 25% and 33% of care homes. Despite two large reforms to long-term care, including legislative overhaul in 1998 and 2007, and increases to operating and capital costs, quality of care and understaffing continue to be a core issue. Objective: The purpose of this study is to assess the impact of marketization on quality and cost of nursing care homes. It examines the trends of privatization in Ontario since the enforcement of the Long Term Care Homes Act in 2010 (LTCHA). Data and methods: This paper examines descriptive data such as newspapers, wire reports, annual financial reports, third party research and government reporting on the five largest care home chains. It also uses government statistical data to critically examine staffing levels and other deficiencies. It provides an assessment of profit level indicators across ownership types and the mechanisms of finance and profit. Results: Combined, Ontario’s five largest chains were transferred $4.3 billion (Canadian dollars) between 2010 and 2015. Mergers and acquisitions in this sector have been predominant since the LTCHA. The largest chain, Revera Inc, is a for-profit chain fully owned by the Public Sector Pension Investment Board, a crown corporation of the federal government. The merger of Specialty Care and Leisureworld formed, what is now the second largest facility, Sienna Senior Living. Third in size is Extendicare, who continue to pursue acquisitions and become involved in non-profit homes. Chartwell has seen steady growth through the construction and acquisition of many retirement homes by Spectrum Seniors Housing Development LP. They have also enhanced their presence in remote Northern Ontario. In fifth, Schlegel Villages has aggressively expanded through public-private partnerships in the human health services and the university sector. It is the only family owned firm among the top five and is not subject to the financial accountability of publicly traded firms and REITs. Policy implications: Mergers and acquisitions require the build up of large debts, which are eventually repaid through corporate restructuring. This imperative of financialization has created numerous obstacles to adequate funding for staff. The rates of physical and chemical restraints were high in Ontario until public backlash forced the government to take adequate steps toward behavioural supports. Local governments have chosen to contract out services while maintaining municipal ownership for the time being. The non-profit sector has been withered by the government’s withdrawal of certain funding advantages like tax breaks, favourable capital subsidies and higher per diems. Combined with total austerity across public sector wages, the crisis of understaffing shows no signs of abating.


date 5 September 2016



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