BC Aims to Revamp Senior Care. The First Step Stirs Controversy

B.C. will pay a large international accounting firm up to $1.5 million to tell it how to redesign the province’s funding model for long-term care.

As the contract gets underway, critics worry the process is in danger of getting hijacked by business interests more invested in protecting their profit margins than bolstering public health care.

In December the Ministry of Health signed a 43-page contract with PricewaterhouseCoopers to pay the accounting firm $319 an hour for financial and technical expertise to “support the phased development, implementation and evaluation of a standardized long-term care funding model for all publicly funded long-term care homes in the province.”

The BC Health Coalition, which has more than 800,000 members and significant union involvement, received the contract in response to a freedom of information request.

“The stakeholder engagement is now up to this contracted-out consultant who might not know the primary stakeholders in the communities that are being impacted,” said Ayendri Riddell, campaigner with the coalition.

“The worst-case scenario is that the lobbyist group that represents the private long-term care providers, which is the BC Care Providers, would hijack this process and would be in charge of shaping these mechanisms that were supposed to be implemented to hold them accountable.”

This scenario would represent “the fox guarding the hen house,” Riddell said.

PricewaterhouseCoopers isn’t talking publicly about how it plans to proceed. Venkat Somasundaram, a Calgary-based partner with PwC who signed the contract, referred all questions to B.C.’s Health Ministry.

The BC Care Providers Association confirmed it is participating in the process, but also directed questions to the ministry.

“We are involved but are working under a nondisclosure agreement so any comments would have to come from the Ministry of Health,” spokesperson Jamie Lozano said in an email.

A spokesperson for the ministry did not respond to messages asking for details of who PricewaterhouseCoopers would be consulting on long-term care.

Opportunity to engage, says minister

Health Minister Adrian Dix told The Tyee that hiring PricewaterhouseCoopers offered “an opportunity to engage and get the best possible information available so there was a common base of understanding.”

The contract names seven PwC key personnel. Besides Somasundaram, they include Richard Ainley, a health-care consultant based in Australia, and Corrie Barclay, who was a senior official in the B.C. Health Ministry before joining the accounting firm.

Dix said the BC Health Coalition’s concerns about the review getting hijacked were “incorrect.”

There are 30,000 long-term care beds in B.C. and the system has long comprised a mix of for-profit, not-for-profit and public providers. About two out of three beds are contracted out to either for-profit or not-for-profit providers. The remainder are owned and run by the province’s health authorities.

Contracted long-term care homes are now all required to provide 3.36 daily hours of care to each resident and are funded to do so. They are also governed by a detailed and complex set of laws and regulations, and there are more than 200 conditions operators have to show they meet.

Concerns about for-profit operators failing to provide the same level of care as other providers go back several years. In the February 2020 report “A Billion Reasons to Care," B.C. Seniors Advocate Isobel Mackenzie found that despite receiving similar funding from the government, for-profit long-term care operators were spending about $10,000 less each year per resident than their non-profit counterparts.

Those concerns became amplified in the early days of the COVID-19 pandemic when the government ordered that workers could only work at a single site to limit disease transmission. Responding to fears from private facilities that they would lose their workforce as employees opted to keep the positions that paid more, the government began providing $165 million a year for wage levelling to bring the pay at private facilities up to what workers would make in other facilities.

To the BC Health Coalition, the top-up amounted to the private providers getting paid a second time to provide the care they were already supposed to be providing.

The government gives all the homes enough funding to pay industry standard wages as set out in an agreement between the government and health-care unions, but as private homes aren’t subject to the agreement, this can lead to them underpaying their staff and shortchanging residents on hours of care in order to increase profits, said the BCHC’s Riddell.

A September 2023 update to the “A Billion Reasons to Care” report found issues in the sector persisted. Looking at five years of financial reports, the Office of the Seniors Advocate found that in the 2021-22 fiscal year, not-for-profit facilities delivered 93,000 more hours of direct care than they were funded to provide, while the for-profits fell short by 500,000 hours.

At the same time, the for-profit facilities made seven times as much profit as their not-for-profit counterparts.

“Actually holding them accountable means there’s no profit in long-term care,” said Riddell. “We want public long-term care, ultimately, and not-for-profit, because we know those are the operators that actually operate well and are better for seniors and better for the workers. It’s very clear it’s the for-profits that are really creating the holes in the system and the worst quality of care is in those kind of facilities.”

For example, a 2021 report from the Office of the Seniors Advocate found that there were more than twice as many COVID-19 cases in contracted homes (both for-profit and not-for-profit) per 1,000 beds as in the ones operated by the health authorities.

NDP’s platform promises, review, delayed

During B.C.’s October 2020 election, held in the first year of the pandemic, the BC NDP campaigned on improving long-term care. The party’s platform ahead of that vote said, “BC Liberals doled out hundreds of millions to for-profit corporations to create new care homes — and it failed miserably.”

The platform mentioned four private care homes that were put under public administration for failing to provide the required levels of care and highlighted that for-profit care home operators had failed to deliver more than 200,000 hours of care the public paid them to provide.

There was a need, the platform said, for “building better, public long-term care homes.”

Dix said the work on reviewing the funding model, which would have begun much sooner if not for the COVID-19 pandemic, has started with gathering up-to-date information from providers.

The ministry and health authorities consult with stakeholders like the Hospital Employees' Union and the B.C. Health Coalition in many ways, he said in response to questions about who is being included in the review.

“Obviously the issue around accountability and funding formulas for different care homes is not the only place that we consult on seniors’ services,” Dix said. “I’m sure the health coalition is supportive of the massive investment in public long-term care that’s unprecedented in recent history.”

The health authorities spent $2.87 billion on long-term care in 2021-22, according to the seniors advocate, an amount that had increased 45 per cent over five years.

The goal is to improve the sector broadly, Dix said. “We want to make sure when we make investments that they go to better care for seniors and others in long term care… and we want to make sure when we deliver long-term care that people deliver a high level of care everywhere, regardless of which care home you end up in.”

Among the contract requirements, PricewaterhouseCoopers is to develop and recommend an approach to managing the change and to develop and implement “an evaluation framework to ensure the funding model objectives of equity, transparency, consistency and sustainability are achieved.”

The province’s desired outcome, it says, is “the delivery of quality long-term care services to residents” where funding is aligned with its objectives “across all publicly funded long-term care homes in the province.”

The contract says the parties all agree that PricewaterhouseCoopers “does not warrant that these outcomes will be achieved.”

Focus on needs of residents, say advocates

Observers say the results of PricewaterhouseCoopers’ review will depend on who the accounting firm talks to and whose interests are given priority.

Isobel Mackenzie, who is retiring this month after 10 years as the province’s first advocate for seniors, confirmed she had been consulted as the review got underway.

“I think it’s not moving as quickly as anybody was hoping it would move,” Mackenzie told The Tyee. “Whether it addresses the concerns my office has raised remains to be seen.”

The province needs a funding model, Mackenzie said, that better reflects a focus on the needs of residents by introducing an incentive for the facilities receiving the funding to actually spend the money on delivering the care.

“The funding model we have now doesn’t do that because we give them an amount of money and they keep whatever they can’t spend and I think we need to shift that,” she said. “I think there’s a belief that a new funding model will achieve that, but we’ll see.”

Mackenzie said she expects it will be at least two years until the new funding model is ready to be implemented.

Asked about the prospect of the review process getting hijacked, Mackenzie said she too is concerned that could happen. “Clearly there are a group of people who are benefiting from the current funding model,” she said. “It is not in their interest to change the funding model. I think that has to be explicitly acknowledged.”

One organization that would like to be involved in the review but has not yet been brought in is the Independent Long-Term Care Councils Association of BC, an organization with provincial funding to help set up and support family councils at long-term care facilities.

“We have not yet been contacted,” said the organization’s executive director Marc Tassé. “But we have been asking the ministry to push us forward and get us involved.”

Throughout the review its essential to keep the focus on residents and their families and making long-term care as pleasant and humane as possible, Tassé said, adding that it would be a mistake to think the answer is to spend more on the system.

“Talking to the family councils and looking at the results coming out from the office of the seniors’ advocate, even though we’ve got this almost 50 per cent increase in funding [over the last five years] we haven’t seen a dramatic increase in the quality of care within the long-term facilities,” said Tassé.

“A lot of it is bleeding off into capital projects and other places that are not directly leading to improvements in quality of care,” he said. “We want to see that every dollar that’s spent goes directly to improvements of the quality of care and somehow significantly changes that process and improves it as we go forward and we’re not necessarily seeing or hearing that those improvements are coming through.”

Funding that’s supposed to be spent on direct care should be spent on direct care, he said, and if it’s not spent on that then it should be clawed back.

Tassé said it can make sense to bring in outside consultants that have expertise like PricewaterhouseCoopers to provide advice. “It also creates a sense of transparency and independence, so it’s not the people who are administering the budget that are doing the assessment of how effective the budget is,” he said.

Another benefit, he added, is if the government doesn’t like the advice it ends up getting, it has some distance from it.

The key will be in how much engagement the consultants do, and how far into the community they're willing to go to ask questions, dig and analyze, Tassé said.

It’s reasonable and even important that a group like the BC Care Providers Association be at the table, Tassé said, but the ministry should be pushing PricewaterhouseCoopers to make sure consultants reach out to other key stakeholders, too.