Can for-profit care homes be switched to the non-profit model?

Inside the complex capacity issues behind Ontario's LTC homes.

Ottawa Citizen 17 minute read March 18, 2021

Aaron Gruntke displays a photo of himself when he was four years old with his mother Linda. Linda Gruntke died at the age of 59 while in a for-profit long-term care facility. Errol McGihon / Postmedia

Linda Lee Gruntke died at 59 after spending six months in a long-term care home.

“She was a free spirit, outspoken. She loved her family and her grandchildren more than anything else in the world,” her son Aaron Gruntke said.

Linda Lee had been a caregiver to her own parents, which led to back pain and a litany of mobility problems. She was admitted to a Scarborough long-term care on May 24, 2018, Aaron, who lives in Ottawa, said.

The next few months were marked by numerous falls. At one point, Linda Lee spent three days in hospital after cutting her leg open in a fall, requiring at least 30 stitches.


When she returned to the home, her family had numerous complaints about her care. Sometimes she didn’t get her medications because there was no nurse available to administer them, Aaron said. At other items, she was over-medicated. She once wore the same bandage on the leg wound for three days.

By early August 2018, Linda Lee had lost the use of her legs. She had COPD and complained of increasing congestion, eventually requiring oxygen, Aaron said. On Sept. 26, she was found unconscious in her room and was sent to hospital. Three days later, she had a heart attack. Linda Lee died on Oct. 3.

Aaron’s grandmother, 93, is in a not-for-profit home. There’s a difference in the warmth and kindness, and the willingness to find answers to concerns, he said. When his grandmother lost her dentures, a member of the cleaning staff jumped into a dumpster to try to locate them in a garbage bag.

“The difference is like night and day,” said Aaron. “If my mother had the proper treatment, she might still be here.”

A growing chorus of voices, from patient advocates to unions to health coalitions, are calling for the province to convert its for-profit homes into not-for-profit homes. The advocacy group Doctors for Justice in LTC has demanded an end to for-profit and urged harsh penalties for any major infraction that harms residents in a letter signed by over 1,000 people, including many physicians and other medical professionals.

Even Premier Doug Ford has been critical.

“We’ll be holding people accountable. Because it’s not about money. It’s about taking care of people,” Ford told reporters in May. “And if they want to be greedy and make money, then get out of the business. Go find something else to do. Don’t put people’s lives in jeopardy.”

But for-profits represent a big piece of the LTC “capacity” puzzle in Ontario — about 58 per cent of all LTC homes in Ontario are for-profit, the highest proportion in the country. Converting them all to a not-for-profit model would be costly, complex and time-consuming.

There are about 79,000 licensed LTC beds in the province and about 38,000 people on the waitlist for a bed. If the for-profits decide to pick up their marbles and leave, the result would be chaos.

What the data says

Even before the pandemic, there was ample evidence that residents in for-profit homes fare more poorly than those in for-profit homes.

In a study published in 2015, Ottawa Hospital Research Institute researcher Dr. Peter Tanuseputro and his colleagues looked at new admissions to 640 publicly-funded Ontario LTC homes, 384 for-profit and 250 not-for profit.

The researchers looked at how many of the residents were admitted to hospital and how many died between Jan. 1, 2010 and March 1, 2012. They found that residents in for-profit homes had  a 10 per cent higher risk of dying and a 25 per cent higher risk of hospitalization.

On the whole, for-profit homes were twice as likely to be in the lowest-performing 20 per cent of long-term care homes, Tanuseputro said.


The COVID crisis has starkly exposed long-standing problems. Four out of the five of the Ontario homes in the scathing report released by the military last May were for profit.

Researchers have so far found no association between ownership and the odds of a COVID-19 outbreak, but facilities run on a for-profit basis had more extensive outbreaks and more deaths, according to a study led by Mount Sinai Hospital geriatrician Dr. Nathan Stall and his colleagues, published in the Canadian Medical Association Journal in August.

In homes that had outbreaks, for-profit homes had 78 per cent more deaths. About 86 per cent of COVID-19 infections occurred in only 10 per cent of Ontario’s long-term care homes. Homes that had older design standards had larger outbreaks. The majority of those tended to be for-profit homes.

“If you own something, you want a return on investment. There’s no question there’s a profit wedge that detracts from the capacity to provide the best-quality care,” said Michael Wolfson, a professor in the School of Epidemiology and Public Health at the University of Ottawa.

For many, the fundamental question is why taxpayers’ dollars should help businesses make a profit.

It costs $184.96 a day to keep a resident in LTC, although that figure may be a higher if, for example, the resident has a private room and pays extra for it.

The money in the first three envelopes must be spent or the money has to be returned to the province. That includes $102.34 a day for nursing and personal care; $12.06 a day on specialized therapies, recreational programs, and support services and $9.54 a day for raw ingredients used to prepare meals.

The “profit” that can be made depends on the efficiencies that can be found in the fourth envelope: the $56.52 a day allocated for “other accommodations,” which includes housekeeping, buildings and property operations, maintenance, dietary services, laundry and administrative services.

In May, the Toronto Star reported that over the past 10 years, three of the largest for-profit nursing home operators in Ontario paid out more than $1.5 billion combined in dividends to shareholders.

“They end up owning the house after we pay the mortgage,” said Pat Armstrong, a Canadian sociologist and distinguished research professor at York University.

“For-profits must answer to their shareholders. (But) this is primarily public money. They should be reporting to us.”

‘Everyone was so busy’

Jane Coyle’s mother Eileen, 97, died at Almonte Country Haven, a for-profit home, last April. Although Eileen did not test positive for COVID-19, Jane believes her decline may have been propelled by the solitude imposed by an outbreak that took the lives of 29 out of 82 residents during the first four months of the pandemic.

On St. Patrick’s Day last March, Eileen was at her window chatting with family members outside. But as the weeks went on, she became more and more withdrawn.


“Was it because of the for-profit environment? It would be a hard question to answer definitively,” Coyle said. “Everyone was so busy. They were doing the best they could. But they were incredibly short-staffed.”

Coyle doesn’t feel there is a place for profit anywhere in the long-term care system. Ultimately, she would like to see for-profit gone. “It just doesn’t fit in with our Canadian values system.”

For some, the first step to changing the system is not to renew upcoming licenses, and not to award any new beds to for-profit operators.

Almost 30,000 long-term beds will be coming up for renewal in the next five years, said Vivian

Stamatopoulos, an associate teaching professor at Ontario Tech University

whose research has focused on caregiving.


would like to see those beds rolled over into not-for-profits — and that any for-profit license that expires should not be renewed.


In the for-profit facilities that remain, each home should have at least two unscheduled inspections a year.

Stamatopoulos would like to see the development of national standards in long-term care; only homes that meet those regulations should keep their licenses.

“I want to see the kinds of inspections and penalties we see in the U.S., where they are quick to revoke licenses,” said


. Despite Ford’s harsh words, she said no LTC licenses have been revoked during the pandemic.

The province has also committed to building 30,000 additional long-term care beds. York University’s Armstrong said none of these beds should be created in for-profit homes. “If we’re going to build new beds, they shouldn’t be given to for-profits,” he said.

The case for non-profit

Advocates for a not-for-profit long-term care model say the homes are more integrated into their communities and perform better on a number of measures.

For example, not-for-profit homes have lower excessive use of antipsychotic medications, lower restraint use and fewer hospital admissions and ER transfers, according to Lisa Levin, CEO of AdvantAge Ontario, an organization that represents not-for-profit facilities.


They are also able to use their community connection to attract more than $300 million a year in fundraising, to boost provincial operating funding, Levin said. “These groups are accountable to their communities. All of the money stays in the home. It doesn’t go to shareholders.”

Historically, Ontario’s not-for-profits were founded by faith groups and cultural communities looking to support elders. Groups like these are still interested in expanding LTC, said Levin. She knows of a few groups that have put in applications or are considering applications for new homes, including the south Asian, Jamaica, First Nations and Korean communities. Groups with existing LTC homes also want to open new homes, including some in the francophone and Chinese communities.

AdvantAge Ontario has asked the provincial government for $11.7 million in funding for “system transformation support” so community groups interested in opening a LTC can access knowledge in areas such as finance, recruitment and human resources.

“There are more groups out there interested, but we need the government to restructure the long term care capital development program to make it easier for cultural community groups to get into this business,” said Levin.

Homes run by municipalities, which are another part of the non-profit sector, have also performed relatively well during the pandemic. But municipalities also pour an estimated $350 million a year into funding their homes above and beyond provincial funding. They are already feeling stretched.

In a presentation to the province’s commission on LTC, Monika Turner, the director of policy at the Association of Municipalities of Ontario,  said towns and cities can’t continue to fill in the gaps.

“Many municipal governments and their residents wish to see more municipal homes built or expanded, but it’s not currently affordable to do so.”

Regardless of who owns and operates a non-profit home, advocates say it’s a model that places a priority on patients. “The care of our seniors shouldn’t be a commodity that people are profiting from,” Don Davies, the federal NDP health critic, said.

“I think we have to decide if this is the direction we want to go in. We don’t have a consensus on this,” said Davies, who concedes that large-scale conversions could take decades.

“If you want to get out of a hole, you have to stop digging.”

Conversion conundrum

Examples of converting for-profit homes into non-profits have happened only on a small scale. In Kenora, for example, a new not-for-profit organization created by the Kenora Chiefs Advisory is building a 160-bed home that will focus on Indigneous residents. The project aims to redevelop 96 spaces at the for-profit Birchwood Terrace, pending approval of licence transfer.

The Ontario NDP has released a plan for phasing out existing for-profit operators in the province within eight years, proposing to spend $750 million more annually in capital funding to acquire for-profit LTC homes while building 50,000 new long term care beds.

“The pandemic has clearly shown us that the system is broken,” Sara Singh, NDP critic for long-term care, said. “It’s an untenable situation. People want to see a new vision of how to provide care.”


In all, the NDP plan calls for $6 billion over eight years, as well as increasing operational funding by five per cent over six years until Ontario is spending $3 billion more a year in LTC staffing and operations — 30 per cent above the current operational funding levels, Singh said.

The plan factors in both the costs of acquiring for-profit long-term care homes and building 50,000 new long-term care beds by 2030, Singh said.

The NDP would immediately stop issuing new licenses to for-profit care operators.  Contracts with for-profit home-care providers will not be renewed and services will be transferred to public and community health organizations and not-for-profits.

The NDP would enter into discussions with for-profit operators on the “orderly transition” to a not-for-profit system and systematically redirect public funding towards public and non-profit homes, including money for refurbishing and rebuilding.

Through the transition period, there would be a requirement for significantly increased financial reporting, transparency and accountability measures. At the same time, legislation will prohibit for-profit operators from closing beds during the transition period.

“We don’t want to leave people without care. The bottom line is that we want to ensure safety and continuity,” Singh said.

The NDP plan makes a lot of assumptions, including that the party will be elected twice in a row. It assumes that municipalities and community organizations will step up and take on the job of running more than twice as many homes as they do now.

It also assumes that for-profit operators will continue to run their homes while the province dismantles their businesses.

Dr. Samir Sinha, director of geriatrics at the Sinai Health System and the University Health Network in Toronto, said it’s a plan that doesn’t add up.


Each new long-term care bed costs between $212,000 and $268,000 to develop, said Sinha, who is also the director of health policy research at the National Institute on Ageing at Ryerson University.

The NDP plan calls for 20,000 beds above and beyond the 30,000 the Ford government has already promised. Sinha estimates that will cost between $4.25 billion and $5.35 billion. That doesn’t leave a lot of money left over to convert private LTC to non-profit, he said.

Complicating the matter, most of Ontario’s for-profit homes are older structures, built to 1972 standards on prime urban real estate. Even if the province revoked their licenses, operators would still own the homes, the fittings and the land. Buying them out would be not be cheap.

“If you close down a for-profit home, you have to compensate them for however many years they have left on the license. And if you do buy the home, what you’ve bought is something built to 1972 standards,” Sinha said.

The provincial NDP said it is confident that the amount it would take to overhaul long-term care is sufficient, adding it has consulted with experts in developing the plan.

Speaking to Ontario’s Long-Term Care COVID-19 Commission in November, health care researcher Hugh Armstrong said he can’t see the province eliminating for-profit homes in the near future, but he would like to see movement in that direction.

Unfortunately, Ontario is moving in the opposite direction, said Armstrong, a Distinguished Research Professor and professor emeritus of social work and political economy at Carleton University.

The homes being built in the province are largely being built by private equity, with operators getting the money back from government over 20, 25 or 30 years, Armstrong told the commission, which is probing how and why COVID-19 spread in long-term care homes.

Borrowing costs are higher for private equity. There’s no reason why government couldn’t borrow at lower cost than private equity and build themselves, said Armstrong.

“What’s happening now is that here are a lot of new builds being authorized by the province, and they’re overwhelmingly in the for-profit sector, in part because there’s an uneven playing field,” he said.

But Armstrong also suggested that there may be an opportunity for the province. Because for-profits now have a “relatively bad reputation,” the cost of taking them over would likely be lower, he told the commission.


There may be ways to improve long-term care without converting for-profit homes into not-for-profit. Increasing the amount of care residents receive per day is one idea that governments have already embraced. Queen’s Park announced in November that it is expanding the hours of direct care for each long-term care resident to an average of four hours per day, up from two hours and 45 minutes a day.

Targets have been set to reach the new standard by 2024-25. It will likely cost $1.52 billion, in 2020 dollars, to meet the standard across Ontario’s 79,000 long-term care beds.

More transparency in the system could also improve care. In the U.S., for example, every facility is given a score based on factors such as the number of falls and bedsores. When operators know they are being monitored on quality indicators, they are likely to try and perform well, said The Ottawa Hospital Research Institute’s Tanuseputro. It could also have unintended consequences, depending on the what is measured: Some indicators, such as falls, are easy to disguise by restraining residents and putting them in wheelchairs.

“We need to look at those quality indicators, but they are fraught with potential issues,” Tanuseputro said. “You can’t fudge hospitalizations and deaths.”

For example, a “proxy measure” for quality of care is the proportion of residents who get certain medications while they are dying, Tanuseputro, who is a palliative care physician, said. Every dying patient will lose the ability to swallow. The question is whether they are administered subcutaneous pain relief in the last two weeks of life. This is only possible in homes that are adequately staffed, he said.

Accreditation is another measure that could close many loopholes, Sinha said. It’s a way for organizations to demonstrate to the public that they are upholding international-recognized standards on quality, safety and people-centred care. It involves self-assessments by the organization and on-site surveys with peer reviewers.

All hospitals in the province are accredited by Accreditation Canada, but it’s not mandatory for long-term care, Sinha said. In Ontario, 98 homes — about 16 per cent of the province’s total — are not accredited. Only about 30 per cent of not-for-profit homes are accredited, he said.

A long-term-care insurance program, similar to the Canada Pension Plan, may also be worth exploring, said

Stamatopoulos, the caregiving researcher from Ontario Tech University.

Germany, the Netherlands and Japan all have programs using various models. The insurance plan can fund home care or long-term care, depending on the recipient’s needs.

The province could also consider paying families to take care of their ailing relatives at home, rather than admitting them to long-term care facilities.

Perhaps the most audacious solution of all is to eliminate the reliance on long-term care homes and replace them with reliable home care and small group home-like residences, an approach Denmark has taken, Patricia Spindel, one of the co-founders of Social Action Ontario, said.

Canada spends $6 on institutions for every $1 spent on community care, which is one of the most unbalanced approaches in the OECD, Spindel said.

Whether an institution is for-profit or not-for-profit, it’s still an institution and no one wants to be in one, she said. “The whole system is set up in a way that doesn’t make any sense — 85 per cent of families would choose a different situation if there was a different option.”

Whatever the solution, the clock is ticking. As the population continues to age, the costs of long-term care for the elderly is a moving target. If public policy continues on its current track, public sector long-term care costs in Canada will more than triple by 2050, from $22 billion to $71 billion, according to an estimate by the University of Ottawa’s Wolfson and his colleagues.

They are also predicting increased pressure on unpaid caregivers, which will need to increase their efforts by 40 per cent, while the number of Canadians using such care is projected to rise by 120 per cent.

The system has about 15 years to gear up to the increase in demand, said Wolfson. “This is only the tip of the iceberg. The oldest baby boomers are just reaching their 70s.”

Coyle, whose mother died after a stay at the for-profit Almonte Country Haven, believes that COVID-19 will be a catalyst for transformation in long-term care. “I recognize that this is going to be a very long process. There are a lot of things that need to happen to improve,” she said.

Unlike 20 per cent of Ontario’s long-term care homes, Almonte Country Haven now has a family council, where families are working on building more collaborative relationships with the facility.

“If we don’t use this to change a system that has been in need of change for a long, long time, it will be a travesty.”

By the Numbers

623: Number of LTC homes in Ontario

360: Number of for-profit homes

162: Number of not-for-profit homes

101: Number of municipal homes

75,676: Number of LTC residents in Ontario, Mar. 29 to May 20, 2020

79,000: Number of licensed LTC beds in Ontario

38,000: Number of people on the waitlist for a bed

30,000: Number of LTC beds  the current provincial government has pledged to build in the next 10 years

26,531: Beds in Ontario LTC homes whose licenses will expire on June 30, 2025

81 per cent: Proportion of COVID-19 deaths in Canada that were LTC residents, according to a Canadian Institute for Health Information report on June 25, 2020

27 per cent: Proportion in England and Wales

28 per cent: Proportion in Australia

31 per cent: Proportion in the U.S.

34 per cent: Proportion in Denmark and Germany

49 per cent: Proportion in Sweden

66 per cent: Proportion in Spain

53.6 per cent: Proportion of private-sector care homes in Ontario that have older design standards

18.5 per cent: Proportion of not-for-profit homes

11.9 per cent: Proportion of municipal homes

$12.74-$16.1 B: Cost of building 30,000 new LTC beds and redeveloping 30,000 existing beds, according to the National Institute on Ageing

$187,336 to $216,993: Capital infrastructure costs associated with developing or redeveloping a LTC bed

$19,214: New costs, per resident per year, being proposed to support the Ontario government’s plan to provide at least four hours of direct care a day by 2024-25

$4.6B: Amount Ontario budgeted for LTC in 2020

7 per cent: Proportion of the total health budget

The cost of long-term care

$184.96: Minimum cost of LTC, per resident, per day

$102.34: Amount per day spent on nursing and personal care

$12.06: Amount per day spent on specialized therapies, recreational programs, and support services

$9.54: Amount per day spent on raw ingredients used to prepare meals

$56.52: Amount per day spent on “other accommodations” such as housekeeping services, buildings and property operations and maintenance, dietary services, laundry and linen, general and administrative services, and facility costs

$4.50: Amount per day for “additional global per diem,” which may be spent on any of these four envelopes. Up to 32 per cent may be allocated to the “other accommodations” envelope

At least $62.18: How much residents are expected to pay, per day, out of their own pockets for basic accommodations

35 per cent: Proportion of Ontario LTC home residents who receive financial assistance form the province to cover these costs


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