BC FORUM News - from the Office of BC’s Seniors Advocate

February, 2020

A Billion Reasons to Care

A Billion Reasons to Care is the first provincial review of the $1.4 billion-dollar contracted long-term care sector in British Columbia. The review examined industry contracts, annual audited financial statements and detailed reporting on revenue and expenditures for the years 2016/17 and 2017/18.

Report Highlights

The review found:

• financial reporting systems were inconsistent between health authorities and they lacked openness and transparency

• there was insufficient detail for significant expenditures related to management fees, head office allocation and some administrative costs

• the method to report direct care hours was based on self-reported unaudited expense reports prepared by the care home operators with no ability to verify the reported worked hours

• less than half of care home operators are required to make their audited financial statements available to the public and no care homes publicly report their expense statements

Overall the contracted long-term care sector:

• generated $1.4 billion in revenue of which $1.3 billion came from public funding

• Spent 54% of revenue for direct care staff, the single largest expenditure

• Spent 15% of revenue on building costs

• Generated a net profit of $37 million

The review found that expenditures and profits were not evenly distributed between care homes and there was a distinct difference based on type of ownership:

• care homes in the not-for profit sector spent 59% of revenues on direct care versus 49% in the for-profit sector

• not-for-profit care homes spent 9% of revenue on building expenses versus 20% in the for-profit sector

• for-profit care homes generated 12 times the amount of profit generated in the not-for-profit sector, $34.4 million versus $2.8 million

The report found that while receiving, on average, the same level of public funding:

• not-for-profit care homes spend $10,000 or 24% more per year on care for each resident

• for-profit care homes failed to deliver 207,000 funded direct care hours

• not-for-profit care homes exceeded direct care hour targets by delivering an additional 80,000 hours of direct care beyond what they were publicly funded to deliver