• Analysis
  • September 26, 2018
  • 10 minutes
  • 1

Elderly care is going private — how can governments keep quality high?

By 2050 the numbers of people aged 60 or older will double

In British Columbia, Canada, seniors are 34% more likely to sent to the hospital emergency room — and over 50% of those admitted will die there — if they are coming from a privately-run nursing home facility.

So found Isobel Mackenzie, who monitors elderly health in the province and makes recommendations to government and policymakers. A majority of the province’s beds — 68% — now reside in facilities contracted by the government to run the health services, leading, Mackenzie says, to a decline in the quality of care.

Canada is far from alone in making more use of the private sector to provide care to a growing elderly population. But a new report, authored by Mackenzie, has resurrected the debate in the country over how to best provide quality health services. She argues there needs to be a balanced mix of public and private companies managing care.

So how can policymakers in Canada and elsewhere best strike that balance?

Rising needs, shrinking budgets

Throughout most of the world, the private sector is now carrying out more and more care work — from childcare to domestic labour — but nowhere is the sector expanding more rapidly than among the elderly.

By 2050 the numbers of people aged 60 or older will double, according to data from the UN, and by 2100 there will 3.1 billion seniors — rapidly outpacing all other age groups.

As a result, governments are experimenting with how to manage their health needs. What was previously provided as public health care has rapidly turned over to the private sector. In the UK, over 90 percent of care homes are run by private operators. Sweden’s 2,710 nursing homes used to be run by the public health services, but have slowly been changing to a mix of private and public.

The debate is how to manage these new private companies so patients receive the quality of care they are used to, and staff enjoy well-paid, satisfying jobs.

University of California professor Charlene Harrington, who has spent decades researching the privatisation of nursing, said that this is a challenge because the impetus to privatise is money-led. Private companies are able to better control costs by paying less for staffing, separating capital and operations costs, and accepting cases with less complex medical needs.

Since strong regulations haven’t been put into place for many of these newly privatised companies, there is very little data collection and nursing homes get away with providing low quality care, Harrington said, pointing to scandals in the United Kingdom, Norway and Sweden.

In 2011, the largest Swedish newspaper published a series of articles on the country’s largest nursing home chain — finding reports of undernourished residents and a large number of unaccounted-for deaths. The United Kingdom saw the collapse of Southern Cross, a corporation managing 750 care homes. In Norway, media found staff of private nursing homes were working up to 84 hours a week of overtime without pay and living in a basement bomb shelter.

“It is not as simple as saying all for-profits are bad”

“If governments are going to privatise there needs to be financial transparency and staffing minimums,” said Harrington. “It is an uphill battle, because most governments don’t realise they need to do this and senior care gets no political attention.”

Private sector, public expectations

In the American system, over 70% of nursing homes have long been privatised. Robyn Stone of Leading Age, a Washington think-tank, said the differences between private and public nursing homes are minuscule, because there are so many federal regulations outlining how they need to provide care.

Incentives have been put in place that to help ensure quality. The money for care arrives with the patient, not from the government, so nursing homes have an interest in maintaining high standards, and there is an online rating system, Nursing Home Compare, where potential patients can read reviews before making a choice.

But there are areas where the private sector needs to continue to improve.

“It is not as simple as saying all for-profits are bad — and that’s not particularly useful. There just has to be nuanced thinking about how we get good quality care at good rates from both types of provider,” said Stone.

Staff turnover can be very high within privately-run homes, with some studies finding over 50% of staff leaving annually — rising to 100% in some facilities.

Stone emphasized that many workers are recruited from overseas, especially in Japan and the United States, where a quarter of the workers are immigrants. To attract and keep workers, homes need to support a living wage and career path to provide stability.

One of the clearest differences, Stone said, is that public homes are seen as more compassionate, and open to a culture change in their system. This means the nursing home ”changes a ‘facility’ into a ‘home,’ a ‘resident’ into a ‘person,’ and a ‘schedule’ into a ‘choice’”, she wrote in a 2009 study on the topic.

Stone says when private homes are incentivised to change their impersonal approach, they can perform as well as a public home, and points to an innovative program in Kansas.

The PEAK system provides financial Medicaid bonus incentives to private care homes, if they perform in two key areas: empowering their workers by providing fair pay, hours and a career path, and person-centred care, which changes the perception of the patient-caregiver status and allows the senior to respond to treatment easier, feel more at home, and flourish with the nursing home setting.

The program started in 2012, and by 2016, 349 Kansas nursing homes joined PEAK receiving pay-for-performance incentives.

Stone said there are ways to monitor the private sector and also appreciate the nimbleness with which business driven organisations can deliver care.

Affecting care, improving delivery

In Quebec, almost 70% of seniors live in privately managed residences. Researcher Gina Bravo, of the Research Centre on Ageing at the University of Sherbrooke in Quebec, decided to study the effects of new regulation on the homes.

The study was conducted in two phases, and investigated the quality of care before the homes became regulated and again afterwards.

Between the first and second tranche, from 2009-2011, all private homes were required to receive a certificate of conformity, which had 26 different criteria to follow ranging from staff needs to training to cleanliness.

“The process improved, but the population changed”

A team of two people approved standards and the certificate is only valid for two or three years. A number of private homes closed as a result, Bravo said, as they weren’t able to afford the time or expense needed to obtain a certificate.

Although this removed a lot of poor quality private homes, it also eliminated a lot of care homes in rural areas, which have yet to be replaced, leaving a gap for the elderly who live far away from metropolitan centres.

After the regulations were in place, Bravo and her team conducted another round of research. “We found that regulation in Quebec made [the] private sector better,” said Bravo.

However, she cautioned that part of the reason why the private sector was able to deliver better health services after regulation was that they weren’t admitting more of the complex care cases. “The process improved, but the population changed,” she said.

As a result a third-subgroup formed, Bravo said: people too healthy to enter the public homes which tended to the most complex cases, and not admitted to private subsidised facilities, creating a gap in healthcare.

“We are not there yet,” said Bravo. “We still need to figure out what works.” — Cara Tabachnick

(Picture credit: Wikimedia Commons)


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