For-profit operators of long-term care homes made 12 times more money than their not-for-profit counterparts but provided less hours of care and paid their employees wages that are much lower than the industry standard, British Columbia's advocate for seniors says.
Isobel Mackenzie said for-profit care homes failed to deliver more than 200,000 hours of care for the funding they received over the two-year period of her review, but not-for-profits gave 80,000 additional hours beyond what they were funded to provide.
She made five recommendations, including the requirement for health authorities to better monitor care hours, tighten financial oversight and create a more transparent system that puts the onus on operators to return money they haven't used to pay their employees.
“The minute you allow the operators to keep any of that money you can have no confidence that the wages they're paying actually reflect the market, versus they're driving them down as low as they can,” Mackenzie said.
Her report released Tuesday is based on a review of industry contracts, annual audited financial statements and reporting on revenue and expenditures for 2016-17 and 2017-18.
Care aides in for-profit homes can earn up to $6.63 less per hour than the standard wage of $23.48 while operators complain of retention and recruitment problems, she said.
It amounts to a salary difference of almost $13,000 a year and sends the wrong message to people who may be deterred from working in the long-term care sector, she said.
“One of the questions we're not asking because we've jumped on this nobody-can-get-staff bandwagon is 'Why?' We say there's a shortage, there's a shortage, there's a shortage. Now just wait a minute here. When we look at these numbers these are significant wage differences within publicly funded care homes within the same funding levels.”
No one from the B.C. Health Ministry, which oversees regional health authorities, was immediately available for comment on the report.
Taxpayers shelling out $1.3 billion in annual costs for the contracted care sector require more transparency from health authorities to answer questions, including why there's such a gap in expenditure for seniors in for-profit homes compared with those that are non-profit, Mackenzie said.
“In for-profit care homes they are spending $37,000 a year on their residents for care and in the not-for-profit sector they're spending $46,000 a year. As the seniors' advocate this is one of the more troubling findings from this review, this disproportionate spending on direct care by care homes that are receiving the same amount of public funding,” she said.
Overall, the for-profit sector generated $50 million in revenue versus $9 million for the non-profits, Mackenzie said.
“There are a lot of questions raised in the report about what is actual profit and loss because I think we need to look at what it is we are funding and whether they are legitimate expenses,” she said.
Taxpayers fund over $200 million a year for building costs to the operators but there's no attempt to determine if those expenditures were paying fair-market rates, she said.
“This is where we say there's a real issue to be sorted out in these building costs,” she said, adding the review found examples of interest rates paid at up to three times above the current commercial borrowing rates.
“We also found that nobody needs to disclose who is issuing the mortgage and many operators report interest being paid to a related third party.”
More than 27,000 seniors in B.C. live in one of 300 publicly funded long-term care homes that are owned and operated by health authorities, private companies and not-for-profit societies.
This report by The Canadian Press was first published Feb. 4, 2020.