BCGEU Pans BC Decision to Expand Private Long-Term Care

May 4, 2022

Health Minister Adrian Dix defends Vernon contract and says government is working to increase public health care.

During the last provincial election campaign, held in the first year of the COVID-19 pandemic, the BC NDP signalled a change of direction on long-term care.

With a significant portion of the seniors dying from COVID-19 living in long-term care facilities, the NDP warned against the failures of privatized care and pledged to build new beds in the public sector.

But less than 18 months later, the government has now awarded the first of several contracts for promised new beds to a for-profit company.

“After a competitive bidding process, the contract was awarded to Kaigo Senior Living,” said the April 22 announcement about the 90 new long-term care beds planned for Vernon.

Owned by Kevin and Noriko Svoboda and headquartered in Vancouver, Kaigo operates half-a-dozen facilities in the province that offer varying levels of care. The new beds will be part of an expansion of Kaigo’s Creekside Landing property and are expected to be ready by June 2023 for residents to move in.

“We are thrilled to be under construction on the expansion… adding to our already vibrant services for people living in long-term care,” the release quoted Kevin Svoboda saying. “We are proud to be a part of the Vernon community and look forward to opening more spaces for seniors living in the area.”

The announcement was closely watched by observers hoping the NDP government would make good on its campaign commitment to create new beds in the public sector.

“We don’t feel that profit has a place in health care, and that includes long-term care and services provided for vulnerable citizens and seniors, so we’re disappointed,” said Stephanie Smith, the president of the BC General Employees’ Union.

“When you are a for-profit provider, the bottom line is, what is the money that’s being made for shareholders, what is the profit margin?” she said, noting the highest costs are often for labour, making it a likely place for owners to try to save money.

“Even before the pandemic began, we saw for-profit long-term care providers who were not able to retain staff, attract staff, that were put under the administration of the public health authorities because they were not meeting their mandates in terms of providing care hours and the level of and quality of care that seniors deserve,” Smith said.

“The pandemic highlighted even more how critical it is that these services are provided in the public realm.”

In the early months of the pandemic, about half of all deaths from COVID-19 in B.C. and Canada were of people living in long-term care homes.

According to a 2021 report from the B.C. Office of the Seniors Advocate, residents of long term care were 33 times more likely than others to die from COVID-19.

The government took various steps to reduce the risk, including topping up wages and reorganizing schedules so people working at a single site could get full-time hours, rather than working part time at more than one residence.

Some advocates called for an end to the involvement of private businesses in the sector, while others argued there were more pressing needs than changes to the ownership model.

For a time, the provincial government appeared to agree with the critics. The BC NDP’s platform for the 2020 election said, “BC Liberals doled out hundreds of millions to for-profit corporations to create new care homes — and it failed miserably.”

The NDP’s platform mentioned four private care homes that were put under public administration for failing to provide the required levels of care and highlighted that for-profit care home operators had failed to deliver more than 200,000 hours of care the public paid them to provide.

There was a need, the platform said, for “building better, public long-term care homes.”

The Vernon contract announced in late April was for the first group of 495 beds planned for the Interior Health region. The successful bidders have not yet been announced for beds in Kelowna, Kamloops, Nelson and Penticton.

Health Minister Adrian Dix said the government was clear from the outset that the beds in Nelson would be publicly operated, while the others would be open to bids from for-profit and not-for-profit organizations.

“In different areas, different things are happening,” Dix said. “We’ve added very significant acute care projects, none of which are [public-private partnerships] for example. We’ve in a number of cases now taken over care homes into the public sector.”

There are 30,000 long-term care beds in B.C. and the system has long been mixed, he said, with about two out of three beds contracted out to either for-profit or not-for-profit providers. The remainder are owned and run by the province’s health authorities. The 2021 report from the Office of the Seniors Advocate found that there were more than twice as many COVID-19 cases in contracted homes (both for-profit and not-for-profit) per 1,000 beds as in the ones operated by the health authorities.

“The challenge will be to continue to improve and increase access to the system,” Dix said, noting that the province’s population, on average, is growing and getting older.

“We’re going to be adding beds and some of them, as in the case in Vernon, will be private beds, necessary public beds that are managed by a private corporation to meet the standards we have.”

Contracted long-term care homes are now all required to provide 3.36 hours of care to each resident every day and are funded to do so. They are also governed by a detailed and complex set of laws and regulations, and there are more than 200 conditions operators have to show they meet.

There have been concerns raised in the past about for-profit operators failing to provide the same level of care as other providers. In the February 2020 report “A Billion Reasons to Care,” B.C. Seniors Advocate Isobel Mackenzie found that despite receiving similar funding from the government, for-profit long-term care operators were spending about $10,000 less each year per resident than their non-profit counterparts.

Mackenzie said in an interview that there is a large amount of variation within the sector and between different providers.

“Some care homes were making significant profits, some were incurring losses, some were breaking even,” she said, “and it didn’t leave one with a sense of confidence that the public’s money is uniformly being spent to address the care needs and the quality of life needs of the residents living in long-term care.”

During the pandemic, with the single-site order, there have been funding increases to make sure workers are paid the same, regardless of the ownership of the facility where they work, and nobody is expecting to go back to a situation where workers at some homes are paid $4 less per hour than workers at other homes, Mackenzie said.

Between the changes resulting from the pandemic and the shifting labour market, where workers have more alternatives than they did a couple of decades ago, there are questions about how much sense it now makes to enter into contracts with long-term care providers, she said.

“The model that has created the business opportunities in the provision of long-term care was built on the premise that the government would contract with you to run the care home because you could run it cheaper than the government,” she said.

Most of the savings came from cheaper labour costs since private providers would run with fewer staff, pay them less, or both, she said, a cost-cutting measure that’s no longer available to them.

Mackenzie also questioned whether the public should be paying for care homes that would ultimately be privately owned.

“We are effectively buying those buildings,” she said. “We don’t own them, but we’re going to pay the operator in their per diem.”

While the government might prefer to keep the debt off its books in the short-term, it will ultimately end up paying more in the long-run, she added, noting it is no cheaper for a private operator to buy building supplies and it costs them more to borrow money.

Moreover, when private operators are funded to provide public services, there is an issue with transparency, Mackenzie said.

“I’ve been quite clear that I think we need greater public accountability for the public dollar,” she said. “If we were able to provide that, some of the issues we’ve seen might start to take care of themselves or be prevented, because I think that the public has been pretty clear that it expects its money to be used in providing care for seniors and the seniors in long-term care.”

She said she would like to know when and why the decision was made that Interior Health wouldn’t build and operate the new beds in Vernon and other communities.

Dix, who appears frustrated with questions about the extent of private involvement in long-term care, has argued that across the health-care system, the government has taken substantial steps since 2017 to bring more services and workers into the public sector.

Those steps included repealing BC Liberal legislation that made it easier to contract out services and that stripped protections for workers when contracts changed hands.

The change has led to health-care workers being brought back into the public sector, including some 397 unionized food service and housekeeping workers brought in house last week by the Provincial Health Services Authority and Island Health.

Earlier in the week, the health ministry announced it was spending $11.5 million to buy private surgical centres in View Royal and Nanaimo.

“Our government is committed to delivering surgical care for British Columbians when they need it,” the release quoted Dix saying, “including recovering from the surgical impacts of the pandemic, and bringing these centres on as Island Health facilities will help all of us achieve this goal.”

Overall, Dix told The Tyee, the health-care system is becoming more public under the NDP government.

BCGEU president Smith said the government does deserve credit for the steps it has taken and she understands that the issues with long-term care are complex and the solutions aren’t simple.

“I absolutely want to give credit where credit is due,” she said, “but we’ve had two years of lessons learned, and not just here in British Columbia but right across the country, and I guess I’m disappointed that perhaps the lessons learned aren’t being applied more quickly by this government.”

It has been great to see the government repatriating home support agencies, housekeeping and other services back into public health, she said.

“We believe that health-care services need to be provided in the public realm,” Smith said. “It seems that really long-term care and assisted living are the last frontiers in terms of being able to approach that.”

Smith said she’s hopeful none of the rest of the beds promised for the Interior will be awarded to for-profit providers.

“Being optimistic we’ll see those either being not-for-profit or being publicly delivered,” she said. “That is where this belongs.” 

[Top photo: Health Minister Adrian Dix says government has taken steps to expand the role of the public sector in health care. Photo via BC government.]