The COVID-19 pandemic has been a humanitarian catastrophe for long-term care facilities. A series of policy failures, combined with existing systemic weaknesses, have left Canadians in long-term care extremely vulnerable to COVID-19.
It’s difficult to overstate the scale of this crisis. Almost 4,000 long-term care residents in Ontario have died from COVID-19, a 28 per cent increase in excess deaths in 2020.
With the vaccination of residents and staff now well under way, it’s time to consider how to reform long-term care to ensure this situation never repeats itself. Many are calling for an end to for-profit care. But non-profits, which make up 28 per cent of long-term care homes, have largely been absent from the discussion.
Governments outperform non-profits, too
We set out to understand whether the type of long-term care home — government, for-profit or non-profit — made a difference in COVID-19 outcomes. Our recently published paper, “Does the Profit Motive Matter? COVID-19 Prevention and Management in Ontario Long-term Care Homes,” finds that government long-term care homes did a better job than both for-profits and non-profits at preventing COVID-19 deaths.
Our modelling predicts that if all long-term care homes had been government-run, 1,348 residents would have died during the pandemic — less than half of the 3,790 long-term care deaths actually experienced. That same modelling predicts 4,977 deaths if all long-term care was for-profit, and 2,822 if all homes were non-profit. So even though the predicted deaths are highest in for-profit long-term care facilities, non-profits also fare badly compared to government.
These findings suggest a need to consider replacing all contracted long-term care with direct government provision — going further than the Ontario Long-Term Care Commission’s recommendation to eliminate commercial long-term care operators.
Abolish non-profit and for-profit homes?
The Long-Term Care Commission released its final report in April. Among other things, the commission recommends preserving a role for commercial for-profits in construction, while suggesting that only “mission-driven” non-profit and for-profit organizations should be allowed to operate long-term care facilities.
We have two concerns with this recommendation.
First, we find the distinction between “mission-driven” and “commercial” for-profit organizations a bit perplexing. It’s difficult to see how one would reliably ascertain whether a for-profit is “mission-seeking” and will remain so in the future. By definition, a for-profit organizational model is geared toward profit-seeking.
But more fundamentally, this recommendation fails to address the reality that government-run long-term care homes have done a better job of preserving life than both for-profits and non-profits. Our paper clearly finds that governments were the safest during the pandemic. That means we should consider the possibility that all long-term care should be replaced with government facilities.
Why have non-profits performed so badly?
Whether we should keep non-profit long-term care facilities depends on why non-profits under-perform government homes in infection management and possibly other measures of service quality. This is an important question to which we lack satisfying answers.
The association between for-profit provision and lower care quality is obvious and well-understood: there is also a large body of long-term care research demonstrating that for-profits under-perform government providers on a range of quality indicators.
But there has been very little study of non-profit service quality, in the pandemic or otherwise. We clearly cannot rely on a common bogeyman — the profit motive — to explain non-profits’ poor performance relative to government. So what explains the middling performance of non-profits?
In our paper we introduce two possible explanations.
The structure of non-profits gives them some disadvantages in terms of investing in the future and being financially prepared for crises. For example, it’s difficult for non-profits to borrow money. The poor performance of non-profits may reflect a struggle to react to the pandemic in light of these structural disadvantages.
If that’s why non-profits under-perform governments, reforms should either address these disadvantages or, if this is not possible, end non-profit provision of long-term care.
What’s behind the lacklustre performance?
Another possible explanation we present in the paper is cross-subsidization.
Both non-profits and government-run facilities have access to resources that enable them to provide a better quality of service. Governments can use tax revenue, while non-profits can cross-subsidize with philanthropic donations. But even though non-profits can cross-subsidize, perhaps they can’t do so as effectively as government-run homes, which would explain their lacklustre performance in preventing COVID-19 outbreaks.
If this is why non-profits are under-performing government facilities, that’s a clear indicator that public funding is insufficient to cover the real cost of long-term care.
We need to develop a clear understanding of why non-profit long-term care providers lost so many residents to COVID-19, and whether they under-perform government on other indicators. Maybe all non-profit homes should be taken over by government, or maybe more incremental changes would rectify the gap.
Understanding why non-profits were unable to manage outbreaks as well as government homes is the first step toward deciding what to do about it.
Kristen Pue, Postdoctoral Fellow in Nonprofit and Philanthropy Research, Carleton University; Alix J. Jansen, PhD Candidate, University of Toronto, and Daniel Westlake, Postdoctoral fellow, Queen's University, Ontario