The dangers of financialized long-term care

The question during a quarterly conference call was jarring: “How is the product being received by the market?”

To many, financial jargon seems out of place in the context of long-term care and retirement homes but it is the norm when it comes to publicly traded companies in the business of care. In this case, the “product” was a retirement residence and the “market” aging seniors in need of supportive housing.

COVID-19 has brought the failings of our long-term care system to the forefront of public attention. Long-term care homes have been hit disproportionately hard by the pandemic globally, suffering major outbreaks and thousands of resident deaths. In Canada, much of the criticism has been directed at for-profit homes that have fared significantly worse than those under municipal or non-profit ownership.

But not all for-profits are created equal. While some are independently owned and operated, others are “financialized,” meaning they are treated more like stock market commodities than care homes.

An analysis of COVID-19 mortality rates in Ontario’s long-term care homes from Jan. 15–July 14, 2020, conducted as part of my master’s thesis, showed that financialized homes had a death toll of 6.2 out of every 100 residents while other for-profit homes had an average mortality rate of 4 per cent. In contrast, non-profit homes had a mortality rate of 3.1 per cent while municipal homes did best at 1.1 per cent.

Activists and researchers have been sounding the alarm about the financial sector’s expansion into the housing market for years. Today, many of Canada’s largest rental landlords are private equity firms and publicly traded companies with a mandate to generate returns for investors. This has become cause for concern over potential predatory tactics like excessive rent hikes and renovictions to squeeze out profits.

In long-term care homes, these corporations are balancing two seemingly incompatible objectives: maximizing shareholder value and providing quality care to elderly residents.

Three of them – Chartwell, Extendicare and Sienna Senior Living – are publicly traded on the stock market. Investors, many of which are financial institutions managing money on behalf of clients, evaluate these companies according to factors like growth, profit and risk. This facilitates comparisons across asset types, enabling a long-term care provider to be evaluated according to the same standards as a chain of hotels or office buildings, for example. Because shares are easily bought and sold, the timescale for profit is accelerated.

While listening in on the quarterly conference calls for Chartwell, Extendicare and Sienna Senior Living investors during the pandemic, it became clear that management is driven by shareholder demand for optimal returns. Even as their existing homes struggled to cope with virus spread, investors inquired as to opportunities for expansion to achieve annual growth.

As the months wore on, the questions became increasingly centered on obtaining government funding and support. One probed the likelihood of securing protection from legal action related to COVID-19 outbreaks and deaths; another asked whether the company was allocating more staff to residents “than is required.”

Revera, one of the biggest long-term care providers in the country, was publicly traded until it was purchased by the Public Sector Pension Investment Board (PSPIB) in 2006. Pension funds are some of the world’s most powerful institutional investors and Canada’s are particularly massive (PSPIB has $169.8 billion in assets under management). Prior to COVID-19, Revera was already facing approximately 85 lawsuits across the country alleging that inadequate care and outright negligence contributed to premature deaths. According to an analysis by the CBC, Revera had some of the poorest outcomes in Ontario as of Dec. 13, with 6.3 deaths out of every 100 residents.

While Revera’s profit-generating capacity may be in the financial interest of pension fundholders, it poses significant ethical concerns. It is entirely likely, for example, that the retirement savings of federal civil servants are grown in part by extracting money from the company that houses and cares for their parents. As a result, there are now calls for the pension fund to divest its Revera stock and transfer ownership to the public sector.

Historically, most long-term care homes in Ontario were independently owned, often by a single individual or family. The explosion of big chains over the past several decades was aided by the competitive bidding process implemented by Premier Mike Harris’ government in the 1990s. This saw two-thirds of the 20,000 new long-term care beds awarded to for-profit chains, three of which evolved into the financialized corporations that now dominate the market (Sienna Senior Living, Revera and Extendicare). Harris is currently chair of the board at Chartwell, a part-time position that nets him $237,000 per year.

In Ontario, residents pay for room and board while the province covers care-related expenses at all homes, regardless of ownership type. Financialized long-term care companies rely on this funding, as well as construction subsidies for new development. They receive additional public support in the form of mortgage insurance from Canada Mortgage and Housing Corporation, which adds to the socialization of risk and privatization of rewards embedded in the sector.

Fees for room and board are set by the province, so long-term care companies cannot make money by increasing their rates. As a result, they have to generate profits by cutting costs. For-profit chains, many of which are financialized, provide fewer hours of direct care per resident than other ownership types. They also benefit from economies of scale, through centralizing operations and standardizing services across a large number of homes. In contrast, municipal and non-profit homes strive to offer customized programs to their residents.

These companies are also engaged in ancillary businesses, including retirement residences, home care services and management and consulting, allowing them to earn more money for shareholders while expanding their influence in the sector. Scarborough’s Tendercare Living Centre, for example, which experienced the highest number of COVID-19 deaths in the province, had contracted out its management to Extendicare. Operations have since been assumed by North York General Hospital.

Based on hours of care, pandemic deaths and much research indicating that for-profit long-term care homes have worse outcomes, it has become increasingly evident that the profit incentive compromises quality of care. So where do we go from here?

Some proposed changes seek to guarantee a baseline standard of care across all ownership types, for example, by enacting legislation requiring homes to provide a minimum number of direct hours per resident.

Others are aimed at curbing the power of financialized companies by pressuring the province to increase funding and licenses to municipalities and non-profits as opposed to concentrating public resources in a small number of for-profit chains. Municipal homes have fared particularly well during the pandemic; their relative success has been attributed to greater accountability and higher staffing levels, among other factors. Many non-profit providers are in high demand as evidenced by the disproportionately long wait for beds at homes with cultural and linguistic services tailored to the needs of their local communities. They do not have the property development expertise of financialized companies, however, so improving their capacity and access to capital should be a priority.

Long-term care homes are the dominant paradigm in terms of elder care in Canada. This does not have to be the case, however, and many seniors would thrive if given opportunities for “aging in place” through day programs, home care services and cohousing. More support for alternative models such as these allows for greater autonomy and sustained community life.

Long-term care has devolved into an investment class, subsidized by the government and backed by real estate assets. Our elders deserve to be cared for in a system that is devoted to their best interests, but for this to occur, we need to remove shareholder returns from the equation.

The comments section is closed.

  • Mike Chouinard says:

    Since the majority of long term care residents’ fees are at least heavily subsidized if not completely paid for through government funding of one sort or another; for-profit-homes have essentially become a very lucrative government funded investment scheme that creates as an unfortunate byproduct, deteriorating and neglectful care for our seniors.
    A second question that might need to be addressed is the provision of a clear definition of the boundaries of what should be considered “political corruption”. When conditions are either upheld or created by politicians or parties for the purpose of enriching either themselves or their backers, something is very wrong. It is immoral for tax dollars to ever flow into the coffers of the politically connected wealthy.

  • Rita Bondi says:

    I am in total agreement with the author. We need to remove shareholder returns from the equation!

  • Michael Fraumeni says:

    Excellent analysis of the dire situation in LTC homes in Ontario and I couldn’t agree more with your assessment based on the facts available. Our society should value all who require long-term care on an equal basis rather than the situation now which doesn’t appear to do so.
    Thank you for writing this very needed piece and hopefully the Government of Ontario will listen.

  • Connie Edlund says:

    I would like to know the % of long term care cases & deaths that occurred in “memory care” wards – ie) seniors suffering from dementia. These are areas most difficult to control as patients do not understand the need to wash, distance and require more one in one care.
    Perhaps these are the specific areas of long term care we need to most focus on. If so perhaps it is these areas of LTC that need to be incorporated into the public system

    • Marion Maye says:

      The Canadian Institute for Health Information has said that 90% of residents in LTCHs have some form of cognitive impairment. I’m not sure then focusing on specific areas would be useful.

  • Doreen Rocque says:

    Well presented Jackie. We also need the political will to make this change. We need to value our seniors more than money. Let’s take the profit our of care.

  • John A. Segriff says:

    Thank you for this great article that is much more than your opinion.
    It’s all about the money. That’s what the shareholders want.

  • Sanchia Aranda says:

    This is very reminiscent of the situation in Australia where long term elder care has been substantially operated by the private sector for many years. I wonder if we will see the same outcomes in disability care as this sector is also seeing an increase in private care providers under our new disability insurance scheme.

  • Jessica Turner says:

    100% and it needs to change NOW!

  • Sparky Johnson says:

    Jackie: As we know Power Politics Money $$$ Greed is what has now for decade after decade driven all Government/Other motives and intent to be OVER the health safety well being care compassion dignity respect morals values ethics and integrity of the most vulnerable. Solutions at their finger tips that they have consciously chosen to dismiss ignore sweep under the carpet while lining their own pockets. Fact truth & reality proven in these facilities they call LTCH. LONGTERM: When in fact they are often short lived, CARE so compromised in majority where intentional actions have been deliberately taken by higher ups! Leaving staff to be set up to fail, pay for many questionable & mission and tasks impossible with shortage of staff, not by people not willing to work. These places again choosing NOT to hire or pay up pay out resulting in burn out, quit, commit suicide/other. HOME: What person with any kind of morals values ethic integrity would be allowing and or supporting majority of these ware housing facilities including hospitals to be allowing and or giving licence to kill and creating bills to protect them. Corruption at its worst beyond the comprehension of most peoples concept belief or imagination even when it is in peoples face. GREAT RESEARCH KEEP IT COMING
    Warrior Advocacy Crusade ASLM All Senior Lives Matter Seniors B4 Profit (STJ) /SSAO http://www.seniorsactionontario.com/Hands of Hope/Voices of LTC

  • John Lord says:

    Terrific analysis and very important.
    Anyone can take action – join Seniors for Social Action Ontario
    John Lord

  • Marg Wood says:

    I have been aware of this for a long time. Doug Ford is in favour of privatization. I wonder how much stock he owns in some of these homes? I am totally in favour of not-for-profit seniors homes. I am an 82-year-old low income senior and thankful that I can still look after myself in my own home.

  • Nancy Furness says:

    Thank you for this article. I brought my 99 year old mother home in October 2020. I can attest to the fact that more home care support services are needed. Caring for our elders at home may be the best for them, but it can also be emotionally exhausting and isolating for care-givers especially during COVID. We desperately need to invest in increased and reliable home support for high needs seniors in order to avoid a tsunami of seniors entering long-term care.

  • Kelli Stajduhar says:

    Fantastic work Jackie!

  • Malcolm Buchanan says:

    Excellent article based on research. Great.

    I would suggest looking at the Danish model for serving the needs of aging and frail seniors.

    We also need better designed long-term care facilities. Rather than the current “warehouse” model we need small long-term care facilities: One resident to a room with toilet and bathing facilities; more privacy in receiving medical and mental health services. Each facility should have full time well trained and paid professional staff. More has to be done to treat seniors will dignity and respect.

  • Sandra Conley says:

    Jackie – Great research and article. A couple years ago, I was looking into long-term care homes for my 91-year-old mom and was terrified. Word of mouth at the time was that municipal homes had more resources and provided better care. But it was hard to know for sure. It is really helpful to be able to access this type of evidence. Thank you!

    We were fortunate. My mom was able to benefit from Ontario’s Assisted Living Program (SE LHIN), that allowed her to receive excellent resources and care in her own home – “aging in place.”

  • Elizabeth Rankin says:

    When profit is the motive in a sector like health care, residents/patients suffer as this article reports.
    We pay taxes in support of the services we receive and expect, whether locally or provincially and federally.
    A vote for which service residents of Canada would prefer regarding this issue (fee for private-public service vs. a publicly-funded service) will likely be determined by a resident or a family’s own experience.
    It seems pretty clear, based on this article, all levels of government need to address this issue and consider putting more money into the regulation of care for seniors.

  • Denyse Lynch says:

    Thank you, Jackie, for your well-researched, comprehensive and easily understood article. Constituents can take this into consideration, along with the Military’s recent findings uncovered in LTC homes during Covid-19, phase 1.
    Appreciate you keeping us informed.

  • Jean MArmoreo says:

    Excellent article, informative and compelling reasons for Canadians to assume more responsibility and accountability for our eldercare. It is a salute to municipality managements that they have ‘shone’ in the Pandemic crisis for the reasons that you have outlined. Delivering more personal care to each and every senior will never be enough if the inherent financial supports necessary to provide excellent services are profit driven as your research underscores. The lessons are there for us all. Now we need to match that with action.
    I applaud the PSAC in their campaign to move the PSP’s investment in their LTC facilities to the public sector.

  • Karen Henderson says:

    Excellent article – solid research to prove this critical point that for profit homes do not belong in the long term care system.

  • Linda says:

    I agree that financialization of the long term care places financial gains above patient care. It is also evident with pharmaceutical companies, that have placed their profits above the safety of the patients that doctors prescribe for. We need to have a complete overhaul of the long term care and medical models we have allowed to invade our lives, at our financial expense and health expense, and start insisting that the patient must come first.

  • James Infantino says:

    Hello Jackie,
    I read, with interest, your commentary on the financialization of the long-term care industry in Canada. As you are probably aware, the Public Service Alliance of Canada (PSAC) is spearheading a “Make Revera Public” campaign to have PSP Investments transition the ownership and control of Revera Long-Term Care facilities to public sector in jurisdictions where Revera operates (i.e. Ontario, B.C. Manitoba and Alberta). You can obtain more information on the campaign at http://psacunion.ca/PSAC-long-term-care-revera.
    Should you wish to discuss further, please do not hesitate to contact me at the e-mail address provided.
    In Solidarity,
    James Infantino (PSAC)

  • JP Surette says:

    God bless you. We need more opinions like this out there, and it needs to be a priority.


Jackie Brown


Jackie Brown has a master’s in urban planning. She is a researcher and writer whose work focuses on affordability, economic justice and the relationships between people and their environments.

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