Introduction

Privatization has been presented as both the only way to save health services in the face of the grey tsunami created by the aging population, and as the best way to create more choice and cost effective quality care (Conference Board of Canada 2010; Leys and Player 2011). In this paper, we argue that privatization—particularly in the form of for-profit care delivery—undermines security in old age. Relying on data from Canada and especially from the province of Ontario, and focusing on the specific case of long-term residential care, we examine how four aspects of security are placed at risk by privatization. Just as the notion of security has revealed the ways corporatization threatens our access to quality food (Shiva 2002), so too can a security lens expose the ways privatization threatens access to quality care in old age. After a discussion of contexts for and trends in privatization, we examine in turn the security of the location of long-term residential care facilities, the security of financial access to them, the security of the quality of care they provide, and the employment security accorded to those working in them.

Faith in markets and the position that health care in particular should be viewed as a commodity have long been driving the push for privatization as the principal route to ‘reform’. The invisible hand of markets has of course been directed by what Martin (1993) has called the grubbier hands directing those markets. Fears fanned by population aging and, especially since the economic and political crisis that started in 2008, by mounting public debts and deficits provide fertile ground for the privatization push. Although research indicates that fears of a grey tsunami swamping the health care system are overblown (Evans et al. 2001; Morgan and Cunningham 2011), a Canadian Medical Association (2010) survey found that four out five of Canadian participating feared that quality and coverage would decline when baby boomers reach retirement age.Footnote 1 This fear is not surprising given the amount and kind of coverage devoted to the issue. In keeping with similar articles over the years, Canada’s national newspaper, the Globe and Mail (2012), recently ran an editorial under the headline “Canada’s aging population will strain the health care system”. Corporate-sponsored think tanks have been saying the same for a decade or more.

Governments in Canada have been exploiting this fear, using it as the basis for promoting the for-profit delivery of health care to seniors in particular. The message is often that the innovation and efficiency needed to meet the growing demand will be achieved through market competition (Prada 2011). Governments have used both policy and expenditure tools to support this competition. As a Health Minister in the province of British Columbia (BC) recently put it, “It’s historically been a partnership and that partnership needs to continue, and looking forward, I see real opportunities for the private sector” (Goodsell 2012). The private sector invited to partner with government is almost always corporate, consisting of large, investor owned chains that drive out small, often family-owned operations. Indeed, there is at work an affirmative action program not only for a shift not only to privatization but also to corporatization in the long-term residential care sector.

As is the case in many countries, long-term residential care is primarily a regional or local responsibility in Canada, with provinces setting the framework and legislation. According to the Organization for Economic Cooperation and Development (OECD 2011:1), “There is a history in many countries of LTC policies being developed in a piecemeal manner, responding to immediate political or financial problems, rather than being constructed in a sustainable, transparent manner.” Canada fits this pattern (Struthers 1997). Residential care has been provided by a complex mix of hospitals, group homes, charitable or other non-profit facilities, municipal homes, for-profit owners and, most recently, retirement homes. For-profit homes, also until recently, have been mainly small and family-owned.

The Canadian province of Ontario offers just one example. Charitable homes, municipal homes, and (for-profit) nursing homes, as these publicly supported and regulated facilities were labeled, were covered by separate pieces of legislation and regulation, with different funding models. By 1988, Ontario had long waiting lists for these residential facilities and demand was predicted to skyrocket. The Conservative Government of the day announced it would build 20,000 new LTC home beds before 2006, and retrofit another 16,000 to meet safety, fire and privacy standards (McKay 2003a). The government put up no capital. Instead it committed future Ontario Governments to spend $1.5 billion from annual operating funds over the next two decades to compensate those approved through a competitive bidding process. To cover the costs of constructing the new beds, it contracted to pay $10.35 per day for the next 20 years, at a total of $75,555 per bed. That was not the only guarantee. The government would continue to pay per diems for every resident to cover food, nursing care, supplies and programs. In addition, it allowed owners to designate a higher proportion of beds for residents who could pay extra fees, and would allow the owners alone to decide what proportion, if any, of these extra fees would be spent on extra services (McKay 2003a). If that were not enough incentive, the government also removed the requirements to have a Registered Nurse on every shift and to provide a minimum of 2.5 hours of nursing care per resident per day. In other words, fewer and cheaper care providers could be hired. It was a wonderful opportunity: guaranteed payment, guaranteed clientele and lowered staffing requirements. Not only that but at the end of the 20 years, the owner could sell, lease or convert the buildings developed under this formula, buildings paid for out of tax dollars.

While the request for proposals did not explicitly favour for-profit corporate chains, the nature of the call did so. The conditions required the bidders to have access to sufficient capital to build new buildings or massively refit old ones. Small, family-owned companies did not have the capital to invest in such projects, and neither did most charitable or cash-strapped municipal homes. The process required that elaborate proposals be submitted by those with time to devote to preparing them and the expertise to do so. Small municipal and charitable homes, as well as small privately-owned ones, did not meet these necessary conditions either. Moreover, new standards relating to the physical structure were hard for those owning older buildings to meet out of current revenue. As a result, two-thirds of the 20,000 new nursing home beds were awarded to for-profit nursing home chains. The top five municipal and charity-based nursing home operators were awarded 2049 new beds while the top five for-profit companies were allocated 6573 new beds (McKay 2003a).

The biggest winner was a big player indeed. A company controlled by the Reichmann family was awarded a substantial allotment of new and retrofit nursing homes beds. Their Central Care Corporation, (the parent corporation is Retirement Residences Real Estate Income Trust (REIT)) was granted licenses for 15 new nursing homes with 1493 beds and 1160 bed retrofits (McKay 2003a). In 1994, this family purchased the Central Park Lodges nursing home chain (12 nursing homes comprising 1889 beds) for $220 million. By 1997, it had acquired the Ontario-based Versa-Care chain of 29 nursing homes with 3700 beds. In 1999, it acquired another 1, 412 beds in Canada (McKay 2003a). Now a major international player, Central Care has branched into other services such as providing agency workers for health services. But Central Care was not alone. Leisureworld was allocated 1895 new beds, and Extendicare was allocated 1613 new and retrofit beds.

There are similar patterns in BC. As was the case in other provinces, there had long been a mix of public and private facilities for years but the for-profits were small and mainly family-owned. With the contracting conditions favouring large ownership as they did in Ontario, the number of corporate-controlled beds for all types of residential care facility in BC increased between 1990 and 2004 by 599 %, or from 552 to 3856 (Cohen et al. 2005:Table 8). The total number of residential care beds in BC was cut by 2529 between 2001 and 2004, although 1065 ‘assisted living’ beds (for individuals in their own apartments but needing limited personal support) were added (Cohen et al. 2005:Table 6). In one instance the government closed the relatively small Cowichan Lodge in Lake Cowichan, based on the claim that it did not meet the physical standards. “As an example, the hallways at Cowichan Lodge are about one-tenth of an inch below the standard nursing home hallway idea” (Lake Cowichan Gazette 2009). Meanwhile, in the province of Nova Scotia, the government did not bother with tendering but simply awarded three nursing home contracts to the same for-profit operator (Keenan 2008).

In short, the competition process itself, along with the conditions for competition and the new standards for physical structures, all strongly favoured large corporations. At the same time the deregulation of nursing care standards combined with the offer to allow more of the extra fees to remain in private hands made the competition particularly attractive to the corporate sector. Although competition is defended as a means of transferring risk, corporations were not taking on market risks when payment was guaranteed by the provincial government in question and, given high demand, ‘customers’ were virtually guaranteed by government as well.

In many jurisdictions, ‘nursing home’ is now the generic label for long-term residential facilities whose residents require 24/7 nursing care, the cost of which is largely or entirely borne from the public purse. Depending on the jurisdiction, some or all of the residents’ accommodation, food and personal care services in nursing homes are also publicly funded and, as just noted in the Ontario case, the capital costs for facilities built of late may also be paid over time by government. Moreover, the assignment of individuals to Ontario nursing homes, whatever their ownership status, is undertaken by the province’s 14 Community Care Access Centres (CCACs), which are public agencies.

The CCACs ensure that nursing home occupancy rates stay at virtually 100 %, thus guaranteeing facility revenues while maintaining lengthy waiting lists. In Ontario as elsewhere, many who should be in nursing homes find themselves in hospitals, in other less suitable institutions, or at home. Because hospitals are both costly and increasingly defined solely in acute, curative terms, they mount substantial pressure to have patients they deem in need of Alternate Levels of Care (ALC) to be discharged. These ALC patients are often accorded priority for nursing home admission, placing even more pressure on other institutions and private homes to provide care to those who should be in nursing homes. The ALC pressure is exacerbated by the insufficient activation, nutrition and infection control too many hospital patients experience, making them unable to return home, even after short hospital stays.

Some of the pressure on nursing homes is absorbed by non-acute, publicly funded hospitals (e.g., step-down facilities for chronic and complex care, psychiatric hospitals, rehabilitation hospitals), but psychiatric hospitals are being closed down and rehabilitation is being defined out of the acute hospital mandate. Other institutions include group homes of various sorts, especially to provide addiction services, and various sorts of assisted living and supportive housing arrangements that with limited public and charitable funding may help needy individuals with activities of daily living. And then there are homecare services, some of which are publicly funded, for individuals needing assistance to remain in their private homes.

This welter of nursing home alternatives can of course be beneficial, enabling individuals and their families to select the most appropriate range of services, but only if two conditions are met. First, the services have to be integrated, enabling individuals to see without difficulty what all the options are, and to move among them with minimal disruption when the occasion warrants. Second, the options need to be financially accessible for individuals. The privatization of nursing homes and the other options works against this integration, obviously by requiring private payment from those who cannot afford the privatized option in question, and less obviously by having different policies and practices (e.g., on how services are provided and by whom), and different funding sources (creating perverse incentives that operate against easy transition from one option to another).

The problem is that, just as nursing homes are more likely than hospitals to be corporate-controlled, with more of their revenue coming from private sources, so too with the other institutions (group homes, assisted living, etc.) and homecare, which are more privatized than nursing homes. By restricting access to nursing homes, governments are promoting these alternatives. In the process, they are promoting privatization, albeit rather stealthily. The BC case of actually cutting nursing home beds between 2001 and 2004 provides only the most dramatic example. Across the country, no province increased its nursing home spaces during this or any subsequent period as fast as its population aged 75 and over was growing. The lengthening waiting lists that have resulted have created the demand for private alternatives.

The BC alternative of assisted living has meant more private provision and more private funding. In Ontario, ‘retirement homes’ constitute an important alternative. As is the case with nursing homes, retirement homes are increasingly corporate-owned. For example, Chartwell Seniors Housing Real Estate Investment Trust, in partnership with U.S.-based Health Care REIT Inc. jointly purchased 42 retirement homes in key Canadian markets in May 2012. “With the completion of this important transaction, we are increasing our focus on the strong, stable and growing Canadian market,” Chartwell president and chief executive Brent Binions said in a release (Canadian Press 2012). Health Care REIT is the third largest healthcare real estate trust in the United States and the Mississauga-based Chartwell Seniors Housing REIT is the largest provider of seniors housing in the Canada, serving over 26,000 residents in over 186 homes (Mercury Staff 2012).

Many retirement home residents require extensive health care and would be in nursing homes if space were available. In Ontario, some retirement home care is provided by government-funded home care services. However, retirement homes can charge whatever they want for places in their facilities and may choose to offer only limited health and personal care services. Indeed, until recently, they were regulated solely by landlord-tenant and fire safety regulations. As a result of multiple scandals exposed in a series of media stories and of coroners’ reports on fires and other kinds of avoidable deaths, the provincial government introduced legislation requiring retirement homes to be licensed and set out standards for these homes (Ontario 2010). Given that the legislation requires a care plan for each resident, sets out conditions for restraints and allows for secure units, it is clear that these are nursing homes by another name. At the same time, little staff training is required and no staffing standards are established. According to a legal opinion requested by the Ontario Health Coalition, a citizens’ lobby group, “the Bill adopts a private corporate model with limited public controls, which raises significant concerns as to whether effective and accountable regulation of retirement homes will occur in the interests of the public and the residents of these homes” (SachsGoldblattMitchells 2010:1).

In sum, governments in Canada have been promoting the for-profit operation of nursing homes and other long-term care options. Chains and internationally owned corporations in particular have benefitted while small, family-owned and non-profit residential care facilities have been forced to close. They have done so directly through the tendering process and indirectly through physical regulations that cannot be met by older facilities. By failing to provide sufficient long-term residential care, governments create opportunities for corporations to provide needed services. By allowing the self-regulation of retirement homes and setting only limited standards for them, governments create profit opportunities.

Security in Locational Access

Although nursing home corporations are guaranteed payment by provincial governments, citizens are not guaranteed access to this form of privatized care. Security of access to a nearby home can be undermined by the business going bankrupt, closing or moving to a more lucrative location for financial reasons, or transforming the nursing home into a retirement home where fees of any sort can be charged and where there are few regulations to limit profits. Access can also be undermined by for-profit homes simply evicting residents or leaving them at emergency rooms.

It is in the nature of corporate capital to buy and sell companies. Indeed, selling can contribute to an increase in share value. “Shares in Extendicare Inc. shot up almost 40 %” after they put up 439 nursing homes and assisted living facilities in the United States and Canada up for sale in 2006 (Norris 2006:4). There are some restrictions on the sale of nursing homes in Ontario, although not all provinces have such restrictions. Homes can, however, close beds if they claim there is insufficient demand, or if they claim bankruptcy. Moreover, at the end of the two decades set out by the Ontario government for the new nursing homes built around the turn of the century, the owners can decide to sell, lease or covert the facilities to retirement homes or residential apartments. In this list, conversion is biggest threat to security because there are so few restrictions on places designated as retirement homes. Bankruptcy is another significant threat.

Ontario offers a number of examples for the undermining of access as a result of for-profit actions. In 1997, Lakeview Nursing Home located in the small upper Ottawa Valley town of Cobden was closed by the for-profit owner and the license transferred to construct a facility in another, larger town hundreds of kilometers away. The Cobden town meeting, required by legislation, objected strongly to the closure because it would mean residents could no longer be housed in their community and 50 people would be put out of work. The transfer happened anyway. The Minister responsible said there was little the government can do if an owner wants to close. Indeed, Ministry officials said that all requested transfers had been approved. The province promised to keep the facility open until other facilities could be found but access to care and family near home was gone (Egan 1997a, b).

This facility closed to move to a more profitable area. Many other for-profit companies go out of business in their search for greater and greater profits. In 2000, five of the largest nursing home chains in the United States went under bankruptcy protection. As nursing home expert Harrington (2007:4) explained in her testimony before the U.S. House of Representatives Committee on Ways and Means, Subcommittee on Health, “the large chains’ bankruptcies stemmed from ‘poor’ business strategies including rapid expansion and sizeable transactions from third parties”.Footnote 2

Fraud can also be at work. To date, the largest nursing home bankruptcy to occur in Ontario was in 2003. Royal Crest Lifecare closed its 11 nursing homes and 6 retirement homes in the province, despite the substantial public funds it had received. Indeed, “Ontario’s health ministry had provided more than $500 million to Royal Crest in slightly more than a decade leading up to the chain’s collapse, but the ministry hadn’t conducted its own audit of the company in 3 years prior to the bankruptcy” (Hamilton Spectator 2008). When all this money was not enough to keep the profit-seeking company afloat, the government appointed the accounting and consulting firm of Ernst and Young as trustees. It in turn handed the homes’ operation to Extendicare, a company that had recently left Florida after being the subject of the largest nursing home negligence verdict at the time in that state’s history. It was not only government money and residents’ homes that were at stake. Royal Crest was ordered, 2 years before the bankruptcy, to stop the improper transfer of residents’ trust fund accounts. But no action was taken and the transfers continued. After the bankruptcies, it was revealed that the federal government’s Canada Mortgage and Housing Corporation (and thus the Canadian government) was out almost $130 million in loans. Clearly the company had not provided all the capital. The Royal Crest owners and other members of their family also declared bankruptcy at nursing homes in Kansas, Nevada and Florida (CTV News 2004).

Ontario is not alone in experiencing disruption through bankruptcies. Most recently, bankruptcy proceedings began in February 2012 against Liberty Assisted Living facilities in relation to two retirement homes in the province of Quebec. At that time, the corporation had not paid its workers in an Ontario retirement home for 9 weeks. As the president of the Ontario union explained, “the workers are barred from striking under the Health Care Act but the facilities are regulated under the Landlord Tenant Act”. (Windsor and District Labour Council 2012). The government acknowledged that its powers were limited in protecting employees or seniors.Footnote 3 Now advertising places in Australia, the Liberty Assisted Living website not longer seems operational in Canada.

Bankruptcies in residential care are not like bankruptcies in other for-profit enterprises. A Canadian business columnist put the issue succinctly.

As Liberty Assisted Living’s string of insolvencies has illustrated, eldercare facilities are much more that a roof over seniors’ heads. When our apartment building owner goes bankrupt, most of us can still buy groceries and feed, clean and dress ourselves, as well as see to our own medical needs. The same can’t be said of seniors who depend—sometimes 24-h-a-day—on the care of others (Frank 2012).

The experience of Royal Crest’s bankruptcy in Ontario demonstrates that the government ends up being responsible for more than the care of the residents. The government also had to pay out approximately $6.5 million mainly for pension contributions and union dues Royal Crest collected but illegally retained (CUPE 2005).

When the government steps in, the home may survive under new management although the result itself may be disruptive for residents. It will no longer be the home they selected. Or residents may be transferred to another facility, one away from their community and perhaps with higher fees. When the government does not step in, as it may refuse to do for retirement homes, the result is lost access to care.

A nursing home does not need to close or transfer the license in order to reduce access. Admission to a publicly financed facility does not guarantee access for life. According to the Ontario regulations on nursing homes for example, a person can be evicted if someone who has authority in the facility determines that “the resident’s requirements for care have changed and that, as a result, the home cannot provide a sufficiently secure environment to ensure the safety of the resident or the safety of persons who come into contact with the resident” (Ontario 2012b:s.145). There is no requirement to ensure alternative care. Evicting residents with high level needs can help reduce costs, a focus of those seeking profits from care. Residents can also be sent to the hospital, a practice more common in for-profit homes that in facilities with other forms of ownership (Shapiro and Tate 1995)

In retirement homes, the vast majority of which are for-profit, residents have even less protection from eviction and less right for admission. Unlike nursing homes, where admission is mainly through a public agency which offers relatively equitable access through managed waiting lists, retirement homes can set their own standards and can easily refuse residents with heavy needs. Under the regulations in support of the 2010 Ontario legislation on retirement homes, residents are to receive notice of closure and reasonable steps must be taken to find alternatives (Ontario 2010:s49.1(a)). Residents must also be given written notice if care is to be reduced (Ontario 2010:s44.1 (a)) and reasonable steps must be taken to find alternatives. But retirement homes can ask people to leave. They can close with 30 days notice, as a Ramada Inn retirement home in northern Ontario explained when it shut down because it was losing money (Hunter 2004).

Security of Financial Access

And of course, fees may mean people never even apply. An Alberta retirement home set its fees at $4995 a month, an amount well beyond the means of most retired people and especially of women who make up the majority of those in need of long-term care (Armstrong et al. 2009; CBC 2012a). According to the BC Ombudsperson, non-subsidized assisted living facilities charge between $1500 and $5000 a month for people still able to direct their own care (2012:47).

Retirement homes can also raise the fees unilaterally. To take a recent case, after facing a long waiting list for entry into a public facility, an Alberta family resorted to a private home. Their 80 year old mother who had complicated but stable health issues was left in an emergency room by the for-profit home when her family refused to pay the 43 % increase in fees demanded by the owner, Tranquility Health Care. The family had signed a contract and, according to the family, the owner was breaking the contract (CBC 2012a). “We are appalled that our 80-year-old mother was treated liked a commodity instead of being treated with the respect and dignity that all Albertans deserve,” Mrs. Podgurny [Denyer’s daughter] told the news conference. “The fact that there appears to be nothing under provincial rules to prevent this is mind-boggling. It just goes to show that the privatization solution that Premier Alison Redford is pushing to address long-term-care issues isn’t the answer for vulnerable Albertans.” As the executive director of Public Interest of Alberta put it, “this is an example of private, for-profit homes “cherry picking” the low-cost, easy-to-care-for seniors for long-term care and dumping the more complex and expensive cases on the public system” (CBC 2012b).

Similarly, residents in a British Columbia home who were transferred from a not-for-profit to a for-profit facility by the government found they had to pay more and received less in terms of what was included under government subsidized care (Clarke 2008). An Ontario resident of a Revera retirement home that operates facilities in Canada and the US has been told recently that her costs will rise significantly. Suffering from dementia, she needs secure accommodation and some personal services. “Those services have been costing $478 a month on top of the $2774 she pays for accommodation and food. The same care services will rise to $2271 in September for a total monthly charge of $5045. She now pays $3252 in total.”

Of course, the private retirement home operators are interested in profits, not in providing care, even if what they operate have become increasingly close to being “pseudo-nursing homes” (Aminzadeh et al. 2004:282). With an estimated 25,000 on waiting lists for Ontario nursing home beds, a retirement home bed is an option for those who can afford it. Some of course cannot afford it, leaving retirement home occupancy rates at between 85 and 95 % for Chartwell, the largest operator in Canada (Galt 2012). It appears not to be concerned, however. Like its competitors, Chartwell is aiming to serve affluent seniors, those able to pay rents of between $3500 and $6000 a month. With access to cheap CMHC funding, which places them at a competitive advantage over other commercial property owners, these chains are anticipating substantial growth over the next decade. There will be growing numbers of aged 75 and over, and many of them will be relatively healthy, but not healthy enough to remain in their own homes. To attract affluent seniors—a business pages headline trumpets that “Affluent boomers expect cruise ship living on land” (Atchison 2009)—their facilities will include pool rooms, movie theatres and gourmet kitchens with recipe sharing. And governments will continue to build nursing home capacity to serve those with increasingly complex care needs, but more slowly than the overall numbers of seniors will grow.

In sum, security in access to care is declining along with growing for-profit services. There is no guarantee the needed services will be available, except for those in the niche market of the affluent with limited care needs. Especially in the growing number of private-pay facilities, owners have more say over who is admitted and those with heavy needs are the most likely to be refused admission. Fees can go up while in residence—a problem for the majority of older people who are on fixed and low incomes—creating insecurity. The cost of care in the private pay facilities also means many have no access at all. Eviction is mainly up to the owner in private-pay facilities, as are transfers to hospital.

Security in Quality

There is little guarantee of access with for-profit delivery. Equally important, there is no guarantee of quality care either. There is a growing body of research demonstrating that for-profit services offer lower quality than public or non-profit ones (Amirkhanyan et al. 2008: McGregor and Ronald 2011). Moreover, employment and working conditions are less secure with the move to for-profit care. This too threatens the quality of care. A US study found that a shift to for-profit delivery meant an increase in regulatory violations and a decrease in residents’ quality of life (Amirkhanyan 2008), while Australian research found this non-compliance results from cutting corners on quality (Jenkins and Braithwaite 1993).

The data we have available suggest that this is the case in Canada as well. They directly concern rates of verified complaints and wait list preferences. Indirectly, but well supported by the research literature, they concern staffing levels and staffing mixes above all. And the required degree of quality must be established, and enforced.

For-profit facilities are more likely than others to have verified complaints The Ontario Auditor General’s Report (2002) found that the “Ministry did not take into consideration whether or not the facilities were in compliance with ministry standards at the time service agreements were signed”. Furthermore, there was inadequate follow-up on complaints. While the finding applied to all homes regardless of ownership, the literature on the higher number of verified complaints in for-profit homes and the indications of lower quality suggest this failure may be particularly problematic in relation to them.

According to a recent Canadian study “compared to for-profit chain facilities in Ontario, non-profit, charitable and public facilities had a one-and-a-half to two times lower chance of receiving a verified complaint” (McGregor et al. 2011:5). A verified complaint is one which has been followed up by the Ministry to ensure it is verified. The highest number of such complaints were made against for-profit chains, accounting for 47.4 % of all complaints (McGregor et al. 2011:Table 3). The majority of the verified complaints were about resident care (McGregor et al. 2011:Table 2). “In another jurisdiction (Fraser Health, BC) non-profit facilities had a three to four times lower chance of receiving a complaint compared to for-profit facilities for total and substantiated complaints respectively” (McGregor et al. 2011:5) Complaints in BC must be substantiated by the Community Licensing Office in order to be counted. A third of the complaints were about care and staff and half the facilities accounted for all of the substantiated complaints. As was the case in Ontario, chains and larger facilities accounted for relatively more complaints.

Long before Royal Crest declared bankruptcy, it had received a higher volume of complaints and even had one license revoked as a result of failing to comply with safety and care regulations (McKay 2003c). Given that verified complains are more common, it is not surprising that a survey of family and residents by the Health Quality Council of Alberta (2011:2) found that “publicly operated facilities received a higher overall rating that private and voluntary facilities”. Although the report does not distinguish among private facilities, the higher ratings given to small over large facilities suggest that chains received the lowest ratings. It is thus not surprising that when offered an admission choice of ownership type, Ontario residents clearly prefer to avoid for-profit nursing homes. Ministry data from 2010 indicate that 67 % of first choices were to non-profit and municipal homes, although they together account for only 46 % of the homes (Buchanan 2011:slide 7).

A host of US studies have demonstrated that staffing levels are directly related to quality of care (e.g., Collier and Harrington 2008; Kramer and Fish 2001). At the same time, a variety of Canadian research has shown that staffing levels are lowest in for-profit homes (Berta et al. 2005; McGregor et al. 2006, 2010). A study of BC facilities found that, between 1996 and 2006, total nursing hours per day increased from 1.95 to 2.13 in for-profit residences, from 1.99 to 2.48 in not-for-profit ones and from 2.25 to 3.30 in public facilities (McGregor et al. 2010:Table 3). An Ontario study came to the same conclusions. For both nursing hours and direct care hours, the intensity was significantly higher in government-owned facilities and significantly lower in for-profit ones (Berta et al. 2005:79). As the BC Ombudsperson (2012:110) explains, the mix of staff also has an impact on quality. When lower paid staff with less training are substituted for higher paid and more qualified staff, as is a common practice for those seeking profit, quality may also decline.

Governments have responded to the widely publicized exposure of neglect and abuse in facilities by introducing new legislation and regulation. Ontario, for example, has recently developed very detailed standards for homes especially in relation to physical structures, restraints, abuse and nutrition. Standards, however, are only as good as their implementation. Under the new legislation, these homes are to be inspected annually and complaints investigated. With only 74 inspectors for 630 nursing homes, however, it is estimated that it will take up to 5 years to inspect them all. “‘We are leaving it up to the homes to regulate themselves,’ said Jane Meadus, a lawyer with the Advocacy Centre for the Elderly. ‘If there are bad apples out there, they will be allowed to continue unchecked.’” (Welsh 2012).

The B.C Ombudsperson’s report (2009/12:19) found that, while residential care facilities are mandated to treat people with dignity, there is “no measureable standard of dignity for residential facilities”. At the same time, the legislation covering private hospitals “has no mandatory standards for operators who provide residential care” (2009/12:20). Moreover, she found that “legal requirements are not always observed or enforced” (2012:138).

Although governments have moved to introduce detailed standards for physical structures, older buildings are less likely to meet these criteria. Governments have also introduced regulations on abuse and the use of restraints, both chemical and physical. But few have addressed in detail the most critical factors: namely staffing levels, staff mix and training. In those few case where provinces have introduced minimum staffing requirements, the minimums are below what research indicates is required for quality care. Unlike Ontario, which has not legislated minimum staffing hours, BC has required newly constructed facilities to provide 2.8 hours of direct care per resident per day. This is well below the 4.55 hours of total care per resident per day recommended a decade ago by Harrington et al. (2000) on the basis of their systematic review of the literature. The BC Hospital Employees Union (HEU 2009a:13) found, as a result of a Freedom of Information (FOI) request, “that the average hours of nurse and personal care provided in facilities in the Fraser Health Authority is 2.7 hprd—with 3.1 h of direct care provided in facilities run directly by the health authority as compared to 2.5 hprd provided in FHA’s contracted facilities.”

But there are no such detailed standards or inspection for the growing number of retirement homes that house more and more of the population with significant care needs. When businesses are bankrupt or fail to meet standards, government move in. However, they increasingly turn to the corporate sector. In Kingston Ontario, city council turned to Extendicare for reforms. This company, fined $20 million after being found guilty by a jury of negligence in one of their Florida nursing homes, and with various settlements in Texas for similar issues (McKay 2003b), was given the responsibility for managing its nursing home. Although one councilor claimed that Extendicare would face penalties if improvements did not result, the city council was told that “there is no such clause in the agreement” (Hutchins 2011).

Contracting out and centralizing services can also have an impact on food, one of the four areas the BC Ombusdperson (2012:98) identified as critical to quality care. A Calgary reporter spent time eating in Alberta residential care facilities in order to assess the new centralized food services. Although the claims he even likes some airline food and TV dinners, “the food served in the long-term-care centres truly shocked me. Watery mashed potatoes like the worst of the instant potatoes from the early 1960s, glazed in a plastic-tasting gravy that sat shimmering on the plate. Brussels sprouts that disintegrated on contact. Pork loin—at least I think that’s what it was; it was of such poor quality it was un-cuttable, unidentifiable and overcooked beyond edibility. Food that had no aroma, little texture, no eye appeal and no life. Appalling food, much of which went back to the kitchen, untouched by those dining around me” (Gilchrist 2012).

In sum, although the move to for-profit care has been justified as a way to not only save money but also improve quality, the evidence suggests that privatization does not secure quality. Governments have responded to multiple scandals and complaints with multiple investigations, new legislation and standards. But in failing to legislate staffing minimums and mixes, to require appropriate training, to enforce legislation through appropriate inspections and to regulate the sectors that are not directly subsidized, governments have failed to secure quality of care. Indeed, that security is often undermined in the process.

Employment Security

Security for residential care workers is also vital for secure access to quality care. Good working conditions mean good care, and among the indicators of good working conditions are low staff turnover and low staff injury and illness rates. Even when the number and mix of staff are appropriate to respond to resident needs, these other factors can undermine quality. As Spilsbury et al. (2012:746) conclude on the basis of their literature review, staffing factors “such as turnover, staffing levels, workers stability and agency staff use, as well as training or experience of individuals, or the ways in which care is organized and managed may determine the effectiveness of professional and support staff performance and their relationship to quality of care to residents”. All these factors are more likely to be issues in for-profit chain facilities, where cutting expenses is a focus of efficiency.

Take training as an example. In 2009, WorkSafeBC, the BC workers’ compensation agency, issued two orders against a health care cleaning contractor. WorkSafe found that the international corporation Compass failed “to conduct meaningful accident investigations” and “to provide housekeeping staff with the training, information and personal protective equipment needed to safely handle hazardous cleaning chemicals.” “The report also points to systemic flaws in health and safety practices, such as workers who are “over-tasked” and under pressure to “save time”, which leads to shortcuts and errors.” (HEU 2009b)

Quality can be undermined by ownership transfers, by the use of agency staff and by contracting out of services. Continuity of care is critical for those in long-term residences, and this is especially the case for those with dementia. A review of the literature for the BC Nursing Directorate reported that chains with higher administrative turnover had more quality deficiencies as well as higher use of psychotropic drugs and catheters. Higher overall turnover rates in staff meant more restraint and catheterization use, more pressure ulcers and more psychotropic drug administration. (Murphy 2006:25–38).

Turnover often results from a change in ownership. For example, Henderson Hospital in Hamilton Ontario leased 63 nursing home beds to Extendicare. The workers who had previously been caring for patients in these wards were laid off by the for-profit company (Poynter 1999). The BC Ombudsperson (2012) has also noted the high turnovers, turnovers that have taken place in the wake of privatization and contracting out.

Contracting out work in nursing homes has been found to be associated with more deficiency citations (Bourbonniere et al. 2006). This is not surprising given that contracting out work usually involves significant staff turnover. In British Columbia, 14 % of the residential care facilities contract out nursing care while 37 % contract out support services such as laundry, dietary and cleaning work (Cohen et al. 2005:24). “At the Nanaimo Seniors Village on Vancouver Island, for example, RCAs and LPNs were contracted out to Wellbeing in January 2004. Then, later that same year, the contract was cancelled and the RCAs and LPNs were contracted out to Caresource. Most recently, 168 health care workers at Nanaimo Seniors Village were terminated in early May 2007 by CareSource, and their work has been contracted out to Abbey Therapeutic Services Inc” (HEU 2009b:24).

A recent case in Kelowna B.C demonstrates the continuing problem. In May 2012, 130 “Park Place Seniors Living—Spring Valley’s owner/operator—chose to terminate the contract with its existing care provider and contract with another company to provide care. This is the second time Park Place has enabled full contracting out of care services in the past 9 years” (BCGEU 2012). When 130 care aides, most of whom were women who had worked in the facility for years, were laid off, only 90 were rehired and were paid up to $3 less than previously. Although 2002 provincial legislation had allowed contracting out in such government-funded operations, in 2007 the Supreme Court of Canada had struck down key sections of that legislation. Nevertheless, the decision did not fully restore protections against contracting out. As the president of the union representing these workers explained. “We owe B.C. seniors quality care. We also owe workers a decent standard of living. This means retaining trained and knowledgeable care aides in seniors’ care facilities” (BCGEU 2012). To the extent that employment is insecure or precarious, security in quality is undermined.

Conclusion

Privatization is not the only factor contributing to insecurity in old age. In Canada, the federal government has just announced that the age of eligibility for Old Age Security will be raised at the same time as it has announced its intention to have nothing to do with reform initiatives on long-term residential care or homecare. Provincial governments and municipalities have meanwhile been cutting funding in many areas and failing to increase spending on long-term residential care. In 2011, a class-action lawsuit was taken against for government for dramatic fees hikes which raised the daily fee for a semi-private room from $12 to $42 (Kleiss 2012). Cutbacks in hospital allocations have pushed these non-profit and publicly funded organizations to convert beds to long-term facilities where they can charge fees and to discharge people into retirement homes where even higher fees are paid (Boyle 2011; Tam 2012).

In long-term residential care, Canadian governments have directly supported the move to for-profit care and promoted delivery by large corporate chains through competitive bidding processes and physical plant requirements. They have financially supported the development of for-profit facilities and subsidized the care provided in them. The governments, rather than the corporations, take on the risk. Although access to subsidized nursing home spaces is mainly provided on the basis of assessment and relatively fair waiting lists, spaces may be jeopardized when companies go bankrupt, move to more profitable areas, transfer residents to hospitals or raise fees in non-subsidized areas.

Governments have indirectly promoted for-profit delivery by leaving space for their development and by not regulating them appropriately. By failing to provide nursing home services, governments increase demand for for-profit care in retirement homes and other alternatives. To the extent that they fail to regulate appropriately the fees, access, admission and transfer, governments have made access precarious especially for the women who make up the overwhelming majority of the poor in need of care in their older years. The effect of privatization is to threaten residential care security, in all its forms. In failing to legislate appropriate staffing levels and mixes in subsidized spaces, as well as to require appropriate training, governments have failed to secure quality of care. Failing to effectively enforce standards and follow up complaints has similar consequences especially in the for-profit sector where reducing costs and increasing income are the driving forces. Quality can be more uneven outside the nursing home sector, given the limited regulations that apply and the even more limited inspections. To the extent that governments fail to ensure that employment in residential care is secure, they exacerbate the problems with quality.

In sum, the mixture of regulation and non-regulation, enforcement and non-enforcement, subsidy and non-subsidy that supports for-profit long-term care combine to undermine security in old age. Seniors in need of long-term residential care, and those who work with and for them, deserve better.