Report from seniors advocate blasts for-profit long-term care delivery in B.C.

Seniors Advocate Isobel Mackenzie is photographed at her office in Victoria, B.C., on Friday, Dec.15, 2017. THE CANADIAN PRESS/Chad Hipolito

British Columbia's advocate for seniors is calling for "fundamental reform" in how the province funds contracted long-term care providers, after a study found for-profit facilities routinely under-delivered care for the funding they received.

Isobel Mackenzie said a review of financial records from 2021 and 2022 shows that long-term care facilities operated by for-profit companies delivered 500,000 fewer care-hours than they were funded for by the province.

In comparison, facilities run by non-profit societies delivered 93,000 more care hours than what they were funded to provide.

"The funding formula that's supplied is the same," Mackenzie said. "And this is the result from that funding formula, where we are rewarding — if you view profit as your reward — not spending on the care."

The province transfers about $2 billion a year to contracted operators to provide long-term care beds, which Mackenzie says is one of the largest annual fund transfers on the provincial budget.

There are about 28,000 subsidized long-term care beds in B.C., 65 per cent of which are provided by contracting out to private operators who may be for-profit companies or non-profit societies.

The latest report finds that the cost of a publicly subsidized long-term care bed through a private operator has jumped 35 per cent in the last five years, and the province needs to make sure that taxpayers' money isn't allowed to "drift" to paying for other costs beyond providing care.

"That's why it's very important for us to ensure that … the money being spent in these facilities is being done in a way that provides the best possible care for the residents who live there and good value for the public who's paying for it," Mackenzie said.

A review of 181 facilities contracted to provide long-term care showed profit in 2022 increased 113 per cent over five years, while expenditures such as supply costs and staffing compensation rose 61 and 33 per cent respectively.

Mackenzie said the "pronounced" pattern of under-delivery by for-profit companies in long-term care was even more concerning given that 80 per cent of the total profit made during the same period went to just 20 per cent of the facilities — almost all of them operated by for-profits.

She said there needs to be more "extremely uncomfortable conversations" with care providers, given that the province and taxpayers are the ones paying the bills.

"We're not partners in the delivery of this care," she said. "This is not an equal relationship. Government is the regulator and the funder. We have a responsibility to the people who live there, and we have a responsibility to the taxpayers. Those are our primary responsibilities."

The advocate said in the report that while there have clearly been efforts to improve long-term care, the underlying issues have prevented the province's investment from making needed improvement.

In response to the report, the Hospital Employees' Union said in a statement that it agrees with Mackenzie's call for fundamental reforms.

The union said such reforms should reintroduce standard wages, benefits and working conditions at long-term care facilities that were promised by the NDP in 2020.

"This government has inherited a long-term care system that is fragmented, lacking in transparency and failing to deliver on the common working and caring conditions that our seniors and our members deserve,” the union statement said. “But the solutions are also clear.

“Our seniors’ care system is pushed to the limit, and we have a responsibility to ensure public money goes to front line care," the statement said.

Mackenzie's review found not-for-profit facilities spent about 25 per cent more per resident on direct care when compared with for-profit care.

For-profit facilities spent 42 per cent more per bed than their non-profit counterparts on capital building costs, the report said.

"The public is entitled to know how their money is spent," Mackenzie concluded in the report. "Residents and their families are entitled to access information about revenues, expenditures and delivered care hours for their facility."

The report also made a number of recommendations, including on ways to ensure that funding for direct care goes only towards that purpose and cannot be shifted to fund other operational costs.

It also suggested a more standardized definition of "what is counted as profit" be determined to clear up if costs such as mortgages, head office allocations, management fees and executive compensation provide for-profit long-term care facilities with additional revenue.

"A greater understanding of the details of these expenses is required to begin to address the issue of what expenditures will be allowed, what are reasonable and equitable building costs and what is a reasonable profit," Mackenzie said in the report.

She also called for a more accurate tracking of care hours, since the current self-reporting system "is vulnerable to inaccuracies."

This report by The Canadian Press was first published Sept. 25, 2023.