Banerjee A, McGregor M, Ponder S, & Longhurst A. (2021). Long-Term Care Facility Workers’ Perceptions of the Impact of Subcontracting on their Conditions of Work and the Quality of Care: A Qualitative Study in British Columbia. Canadian Journal on Aging / La Revue canadienne du vieillissement

In the public imagination, LTCFs [Long Term Care Facilities] have long been considered to be places of last resort and are associated with warehousing, waiting to die, and, during the COVID-19 pandemic, death itself. Cost has also been of concern, particularly in the context of an aging population wherein the need for long-term care (LTC) is expected to increase. These concerns have also come at a time of governmental fiscal restraint and greater reliance on market mechanisms to deliver seniors’ care.

One significant consequence of cost concerns has been a turn to the for-profit sector for innovation and investment. In the early 2000s, the province of British Columbia passed several “business-friendly” policies to prepare for increasing for-profit participation in LTCFs. Chief among these were policies permitting the subcontracting of LTCF staff. Subcontracting was a process whereby for-profit companies and non-profit organizations, which had been contracted by the regional public health authority to provide LTCF services, could decide to contract with third-party companies for their staffing needs. In British Columbia, this second layer of contracting was called “subcontracting”. Facility management were able to end these subcontracts with short notice, allowing management to bust unions and reduce labour costs, a process termed “contract flipping”. The governments’ policy decisions to allow subcontracting were legitimated by claims that such arrangements would ensure financial sustainability, while supporting greater flexibility, responsiveness and quality.

Privatization in the LTCF Sector
“Privatization” refers to the transfer of public resources to for-profit providers. In neoliberal discourse, the turn to for-profit provision, in general and for the delivery of health care in particular, has been justified by the claim that market-based approaches are more responsive to public needs. In other words, for-profit providers are believed to adapt to changes in customer demand faster than governments, because they are motivated by the potential for increased profit (and equally by the possibility of financial losses). Such profit maximizing behavior is also thought to contribute to a more cost-efficient delivery of services. Neoliberal discourse also maintains that these gains will not be at the expense of quality. Indeed, quality is expected to improve through the mechanisms of provider competition and consumer choice, with poor providers being forced to improve or fail.

LTC has been particularly susceptible to privatization because the sector is excluded from the Canada Health Act. This exclusion has contributed to the considerable variability in facility ownership across the country and within provinces (e.g., differing public, non-profit, and for-profit ownership mixes). Despite this variability, general trends point towards an increasing reliance on for-profit providers for the construction of new facilities as well as a concentration of for-profit ownership through large corporate chains.

Effects of Privatization
The weight of available evidence indicates that for-profit LTCFs deliver poorer quality care than either non-profit or public facilities. The main reason for this difference is that for-profit facilities make their profits by keeping staffing levels and wages low and opting for staffing mixes with less- experienced staff (e.g., replacing registered nurses [RNs] with licensed practical nurses [LPNs], and LPNs with care aides).

 A large meta-analysis of studies comparing quality in non- and for-profit facilities found that non-profit facilities provided more and higher quality staffing than for-profit facilities, leading the authors to conclude that residents would have received more care in non-profit homes. Similarly, a study by McGregor et al. (2005) found that the number of hours per resident-day provided by direct care staff was significantly higher in non-profit facilities than in for-profit facilities. And a more recent study by Hsu, Berta, Coyte, and Laporte (2016) found that for-profit homes, especially those owned by corporate chains, provided significantly fewer hours of care than non-profit or publicly owned homes. These lower staffing levels are significant, as staffing levels are strongly associated with quality in LTCFs. 

Additionally, lower staffing levels and lower wages have been associated with higher turnover, which fractures care workers’ relationships with residents and their colleagues.

Privatization in British Columbia
Over the last three decades, the LTCF sector in British Columbia has been steadily privatized as a result of a number of provincial government policies.
The entry of private investment into the LTCF sector in British Columbia was further aided by two policy reforms in the early 2000s designed to reduce the power of unions and increase labour flexibility (Longhurst et al., 2020). 

Prior to this time, publicly funded LTCFs in the province were governed by a master collective agreement negotiated by an employer group (Health Employers Association of British Columbia) and a bargaining association representing unions. This agreement standardized working conditions and workers’ rights across the province’s LTCF sector. It generated a high degree of stability for the workforce where employment in the sector was seen as providing family-supporting wages.

Since these changes in the early 2000s, numerous studies have raised concerns about the effects of privatization for the people working and living in LTCFs (Longhurst, 2017; Office of Seniors Advocate, 2020; Stinson et al., 2005). Motivated by public complaints about the quality of care that residents were receiving, the British Columbia Ombudsperson undertook a province-wide review of the long-term facility and community care system. Among the significant problems identified was the harm done by the mass firing of staff. As the British Columbia Ombudsperson observed:
Such turnovers can disrupt the lives of seniors in residential care, especially those residents
whose care needs are complex. Over time, long-term staff acquire specialized knowledge of
these needs so the simultaneous replacement of many employees can make it difficult for
the seniors because continuity of care is disrupted. This is particularly the case for residents
with dementia. It can also be stressful to families since they often need to provide extra
support to their relatives during such transitions.

Although the provincial government at the time did not heed concerns about the effects of subcontracting, an important response to the British Columbia Ombudspersons’ inquiry was the creation of the Office of Seniors Advocate (OSA). 

The Office of Seniors Advocate (2020) recently completed an investigation raising serious concerns about privatization in the LTCF sector and its consequences for care. Echoing research on privatization in other jurisdictions, the OSA’s investigation found that the for-profit operators provided less direct care and lower wages. Specifically, the OSA found that for-profit sector did not deliver the 207,000 hours of care that they were funded to deliver, even though they took more than $34,000,000 in profits. By contrast, the non-profit sector provided 80,000 additional hours of direct care on top of the hours that they were funded to deliver. Further, the OSA found that for-profit operators paid less than non-profit operators, spending an average of 17 per cent less per worked hour, with wages paid to care aide staff being as much as 28 per cent below the union standard rate.

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