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The Founding College of the University of Toronto
Long Term Care

The True Cost of Efficiency in the Long-Term Care System

By Kaitlyn Lem, fourth-year student, Psychology & Health Studies
Amna Majeed, fourth-year student, Human Biology & Immunology
Paul Hamel, Professor, Department of Laboratory Medicine & Pathobiology
Health Studies, University College

As of May 11, 2020 there have been more than 68,000 confirmed cases of the SARS-Cov-2 (COVID-19) virus, resulting in more than 4,900 deaths within Canada. Tragically, 82% of all the recorded deaths in Canada due to COVID-19 have occured in long-term care facilities (LTCFs). Evidently, this pandemic has disproportionately affected LTCFs, where the virus encountered fertile conditions for propagation, leading to an unrelenting increase in mortality. Proximal risks include close living conditions of the residents in LTCFs, many of whom have co-morbidities and compromised immune function. It is clear, however, that the structural aspects of LTCFs themselves, including conditions of employment and the lack of resiliency within institutional operating models, combined with the failure to anticipate such a pandemic, have given rise to these grim outcomes. Herein, we discuss limitations of LTC residences for the elderly within the current Canadian healthcare system that have been revealed and exacerbated by the deadly progress of this pandemic.

Long-term care facilities are residential institutions wherein individuals who have lost some capacity for self-care receive ongoing assistance with a range of physical and/or cognitive impairments. Terminology surrounding LTCFs is ambiguous and varies by country, province, and level of assistance. In existing literature, LTCFs may be referred to as nursing homes, homes for the aged, or residential care, among others. Furthermore, while the “universal healthcare” model in Canada would presume that long-term care (LTC) is included within government-funded care to meet elderly individuals’ physical, psychological, and social needs, this is not the case. Long-term care, including LTCFs, are considered “extended health services” under the Canada Health Act. Thus, it is at the discretion of the provinces and territories to determine whether individuals in need of care receive some level of publicly-funded support.

From the Poorhouse to Long-Term Care Facilities

The origin of LTCFs, and their evolution from poorhouses, highlights the marginalization of the elderly within Canada, which arguably persists to date. In the mid-19th century, widespread structural poverty that accompanied the emergence of capitalist social reforms led to the creation of poorhouses. Poorhouses lodged the elderly, disabled, and sick, and worked to segregate the poor from the rest of society. Many elderly individuals who were too frail, sick, or senile to work for wages or unable take care of themselves were left with little choice but to enter poorhouses due the paucity of public support.

The expansion of medical knowledge in the late 19th century gave rise to the transfer of frail and sick elderly individuals from poorhouses to hospitals. However, as hospitals accumulated patients needing continuous care who had little hope of leaving in the short term, hospitals became overburdened. This, combined with indifference to the medical and social needs of geriatric populations and an emphasis on the treatment of acute conditions, led many provinces to create separate custodial units for patients who needed extended recovery periods (e.g., British Columbia’s Hospital Clearance Program). Following World War II, improvements in public health led to a higher proportion of the population living to old age, and subsequently a considerable expansion of these custodial units ensued. These institutions are what we understand today to be the modern-day LTCF.

The development of LTCFs illustrates how these institutions were not principally developed to promote better lives for the elderly, but rather to remove the chronically ill from hospital settings. Indeed, Katz notes that LTCFs, “paid the price for their origin as poorhouses,” as they never lost the stigma attached to welfare. The evolution of LTCFs further illustrates how a specific population, in this case the elderly, emerged as passive receivers of care, as opposed to policy being created at the direction of this population. Thus, LTCFs originated in a system of marginalization. Despite significant progress in many LTCFs, systemic deficiencies still exist in some LTCFs, which continue to marginalize and medicalize the elderly population.

Current Limitations in Long-Term Care

A 2019 report by the Ontario Health Coalition identified key systemic issues within LTCFs, including concerns with safety, funding, and access to care. Overall, access to care has decreased across Canada. Ontario in particular ranks second-last in the number of LTC beds per capita. This deficiency has led to extensive waitlists, ranging from 18,000 to 33,000 since the 1990s. For individuals in racialized and marginalized groups that seek ethno-culturally specific care, the waitlist is six months longer than the average wait time, due to barriers in accessing culturally appropriate, safe, and responsive services.

Rather than meeting the increasing needs of the Canadian elderly population through public LTCFs, rationed care levels and limited access have given rise to the proliferation of privatized, for-profit LTCFs. This arrangement leaves seniors to finance their care in for-profit facilities that aim to maximize the return-on-investment for their funders. For the elderly, who typically have fixed incomes, the drive for increased profits can mean increased and unaffordable prices for accommodations. Further barriers to access exist through “means-testing,” wherein individuals may receive government subsidies only if deemed eligible through LTC home rate reduction programs.

Moreover, healthcare staffing within LTCFs has decreased. Current levels of regulated staffing have dropped from a recommended 4 hours per day per resident, according to the 2008 Sharkey Report, to a mere 2.71 hours. The 2015 Report of the Ontario Auditor General noted that inadequate staffing was the primary reason that LTCF administrators reported inability to achieve compliance with government requirements in inspections.

Health Outcomes in For-Profit Long-Term Care Facilities

These foregoing issues are further exacerbated by the increase in for-profit corporations among the institutions that provide LTC. While small, locally-owned LTC homes have always existed within Canada, large, franchised corporations now dominate ownership of “LTC markets.” Private, for-profit LTCFs employ market-oriented approaches to maximize profit margins while trying to deliver some level of care and security for the elderly and entrench these practices in the system of LTC delivery. In recent years, the proportion of LTCFs owned by for-profit institutions has grown. Prior to premier Mike Harris’ Progressive Conserative Ontario government in the late 1990s, there were relatively few for-profit LTCFs. By 2019, for-profit corporations owned the majority of LTCFs in Ontario. More than 59% of Ontario’s LTC homes are currently owned and operated by the private sector; the largest five LTCF companies control 23.8% of beds within the province.

Organizational structure has implications for how resources are distributed in LTCFs. That is, while both for-profit and not-for-profit LTCFs are required to deliver the same minimum level of LTC, for-profit organizations must provide these services while also simultaneously generating some level of profit for their owners or investors. Apart from the funds that they receive, these profits can be increased by introducing “efficiencies” that generally reduce operating costs. In the case of LTCFs, the largest expense is the labour cost for nurses, personal support workers, cooks, caretakers, administrators, and other workers. Consistent with the current economic fashion, the costs of labour can be reduced by hiring more part-time and casual staff, and by utilizing volunteers. These downward pressures have the effect of reducing salaries and contributions to employee benefits, including health insurance, pension contributions, holidays, and sick leave.

Two important consequences of the implementation of these “efficiencies” are: i) many workers are forced to take employment at multiple LTCFs in order to meet their financial needs; and ii) LTCF residents receive inadequate attention as a result of staff turnover and inconsistency in care. It is well documented that, with inconsistent care, residents receive less direct care and fewer social interactions. Inadequate care is further exacerbated by incomplete reports on the ongoing health and wellbeing of residents, which is often a result of the relatively short shifts for which healthcare workers are employed.

Healthcare staffing is a proxy for the quality of care in LTCFs. Staffing has a profound role in protecting residents from infections, including the seasonal flu and, particularly relevant this year, the COVID-19 pandemic. A 2015 study found that three months after admission, residents in for-profit LTCFs had a 20% higher risk of mortality and 36% higher risk of hospitalization than those in not-for-profit facilities. After a one-year follow-up post-admission, the mortality and hospitalization rates were 10% and 25% respectively. For-profit facilities also receive a higher number of resident complaints. These data illustrate the profound limitations of the for-profit model for LTC.

Long-Term Care Conditions are Exacerbated by COVID-19

COVID-19 highlights the deleterious impacts of the current system. In Ontario, more than one-third of the province’s LTCFs are dealing with outbreaks. In Pickering, the 233-bed Orchard Villa, a privately-run, for-profit institution, has one of the highest rates of infection in Ontario. To date, 190 residents have been infected and 66 residents have died due to COVID-19. On April 28, The Globe and Mail reported that LTCFs have been connected to 79% of the COVID-19 deaths in Canada, according to statistics released by Canada’s Chief Public Health Officer, Dr. Theresa Tam. The Toronto Star reported further that, as of May 7, 82% of all COVID-19 deaths in Canada had occurred in LTCFs.

Recently, the Ontario Health Coalition reported that for-profit LTCFs exhibit higher rates of death than not-for-profits and municipal homes (9% vs. 5.25% vs. 3.62%, respectively). The Toronto Star reported that while all LTCFs are experiencing similar levels of outbreaks, for-profit homes have four times as many COVID-19 deaths as municipal homes and twice that of not-for-profit LTCFs. Moreover, the death rate in for-profit facilities continues to increase at a faster rate than in non-profit and municipal homes.

Deadly “Efficiency” in Long-Term Care

“Efficiency” refers to a spectrum of market-based processes used to organize institutions to maximize profits. These processes may include reducing waste and increasing labour productivity, among other measures. For LTCFs, efficiency has been achieved through minimizing labour costs, excess inventory, and empty beds. As previously discussed, efficiency often results in part-time labour to reduce salaries and employee benefit payouts. Efficiency in LTCFs also recognizes that minimizing unused space in facilities maximizes profits. For this reason, many LTCFs have residents living in close quarters.

 A less obvious ”efficiency” employed by LTCFs comes from the idea of avoiding waste or excess. Long-term care facilities achieve minimal waste through an economic model termed the “Just-in-Time” (JIT) system. The JIT system is a means of producing and supplying inventory as it is needed. It seeks to increase efficiency by allowing for more precise determination of the needed supplies, minimizing excess costs and inventory, and not spending capital until absolutely needed. The JIT system is used by large retail corporations such as Amazon and Wal-Mart. Now applied to LTCFs, the JIT system has significant consequences for inventory, including essential goods such as personal protective equipment, food, and diapers. This approach means that many LTCFs keep little inventory beyond what is needed for a short period.

While this model may be successful in maximizing profits, employing an efficiency ideal in healthcare institutions leaves them vulnerable to challenges. This model of efficiency is not conducive to contingency planning, as it does not consider possible future challenges of the sort we are now experiencing. Indeed, amidst a global pandemic, the deadly limitations of efficiency have been revealed, and the safety and quality of care of the elderly population within LTCFs have been severely jeopardized.

The ongoing marginalization and subsequent medicalization of care for the elderly is contrary to the notion that LTC and home care needs to be expanded, given that a quarter of Canadians will be aged 65 or older by 2035. In 2002, the Romanow Report on the Future of Health Care in Canada stated,“... there is growing evidence that investing in LTC can save money while improving care and the quality of life for people who would otherwise be hospitalized or institutionalized in long-term care facilities.” Due to pro-privatization and market forces, however, LTCFs have been pushed out of consideration for inclusion as essential healthcare services. This currently held ideological position that greater efficiencies can accrue through private, for-profit institutions, is revealed to run counter to the needs of society and marginalized elderly people, specifically amidst the current pandemic.

This article is the third in a three-part series on COVID-19 by Health Studies researchers at University College.

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