The forthcoming European Care Strategy must seek to return long-term care to public control.
When private investors can regard senior citizens as a steady, stable flow of public funding, rather than human beings to whom society is indebted, social care is devalued. Basic human rights are at stake and residents and care workers deserve dignity and respect.
Covid-19 tragically highlighted the systemic problems of for-profit eldercare: understaffing, low pay and an exploited, largely female workforce with insufficient rights and protections. We have passed the second anniversary of the beginning of the global pandemic, yet underlying issues in long term care have still not been addressed.
Long before, and in part to avoid their own responsibilities, governments facilitated the entry of private corporations into social care. Public policy stimulated the care industry—and now public pension funds are feasting at the table, while the elderly are left with crumbs.
Aggressive behaviour
Two government-controlled Canadian pension funds, behaving like aggressive private-equity firms, have become among the world’s largest owners of for-profit care companies. Canadian and European trade unions are coming together to expose this travesty, which—using workers’ deferred income—prioritises profit over care.
The Canadian fund for federal workers, the Public Sector Pension Investment Board (PSP), is a major shareholder in Korian, the largest care-home company in France and a major player across Europe. A former Korian executive recently alleged that, to boost profits in France, the company aimed to spend under €4.50 per resident per day on food.
Another Crown corporation and Canada’s largest pension fund, the Canada Pension Plan Investment Board (CPPIB), holds over 22 per cent of the voting rights in Orpea, Korian’s top competitor and the largest care-home company in Europe. The French government’s recently published review of Orpea was scathing and may lead to the company being forced to repay misused public funds.
In Canada, PSP owns 100 per cent of Revera, the second largest care-home company in the country. Revera owns other operators in the United States and the United Kingdom, including Sunrise Senior Living, which it acquired from KKR, a private-equity giant itself once labelled the ‘Barbarians at the Gate’.
Highest death rates
The chronic understaffing and low pay at Revera and across other large care companies in Canada resulted in one of the highest death rates in long-term care in the world. Canadian unions are calling for the government to take control of the company, which in effect it already owns, and run it and the wider care sector for the public good. The #MakeReveraPublic campaign is broadly supported by community allies who have a clear understanding that there is no room for the profit motive in Canada’s distressed and failing long-term care.
Canadian unions teamed up with the Centre for International Corporate Tax Accountability and Research (CICTAR) to analyse Revera’s finances. The lack of transparency in Canada led CICTAR to examine the care homes—owned through a labyrinth of shell companies in the tax havens of Jersey, Guernsey and Luxembourg—operated by Revera in the UK.
The UK operating companies declare losses there, and so pay no taxes, while profits are siphoned offshore. These are clearly not responsible business practices with which a Canadian government-controlled entity should be associated.
In co-operation with the two largest union federations in France, CICTAR recently exposed the hidden structures and finances of Orpea, which uses at least 40 Luxembourg shell companies to accommodate its growing property empire. Once again, money is shifted from front-line care and staffing to finance debt and property purchases, to grow the business.
Canadian workers do not want their deferred wages used for such abuse. While care-home residents suffer from neglect and workers endure low pay and unbearable workloads in Europe, Canadian workers have lost millions in retirement savings, because the stock prices of scandal-plagued companies like Orpea have fallen by over half since mid-January.
There is no ‘responsible investment’ in a care industry designed to maximise returns, rather than provide care and support the dignity of residents. Private investment in care needs to come to an end and direct public investment—to provide the best care possible—needs to replace it.
Brutally exposed
Covid-19 brutally exposed the structural problems in for-profit care which workers had called out for years. The World Health Organization described the death toll in care homes as an ‘unimaginable human tragedy’ and estimated in its early days that residents represented up to half of all related deaths in some European countries.
The European Parliament’s special Covid-19 committee needs to address the role in this of private operators and ensure public funding to deal with the pandemic did not find its way to tax havens such as Luxembourg. The European Commission’s promised European Care Strategy must learn the lessons from the failed experiments across the world with for-profit care and begin to phase it out.
It is not a few bad actors who are undermining eldercare: it is a systemic problem driven by prioritising profit over people. Front-line care workers must have full protection of union membership to report problems, without retribution when they do so. Any surplus generated should be recycled into improved pay and staffing.
Change is not likely until workers have a voice, governments listen and they take back direct responsibility for safeguarding the wellbeing and human rights of often-vulnerable senior citizens.
Mark Hancock is national president of the Canadian Union of Public Employees.
Jan Willem Goudriaan has been general secretary of the European Federation of Public Service Unions (EPSU) since 2014.