March 2002 standing committee on finance and economic affairs

Mr. Chairman and Committee members, thank you for the opportunity to appear before you today. At OANHSS we welcome every opportunity to talk about the long term care facility sector and the challenges that face us.

Those of us in the long term care facility sector are obviously very familiar with its structure, operations and funding arrangements and we assume that others are equally familiar. Sometimes, however, we find that isn't the case and, therefore, with the Committee's indulgence, I'd like to give a brief overview of the sector in order to establish the context in which I will then talk about the challenges that face us.

There are three generic types of facilities in the long term care sector: Nursing homes, of which there are approximately 326; municipally owned and operated homes for the aged or rest homes of which there are 101; and charitable homes for the aged of which there are 70. For the most part, nursing homes are operated on a for-profit basis by private operators. Those operators must obtain a license from the Ministry of Health and Long-Term Care for each facility they operate that specifies the number of beds for each facility.

Homes for the aged and rest homes are operated on a not -for-profit basis under the Homes for the Aged and Rest Homes Act are operated by Ontario municipalities, as one of their legislated obligations.

Charitable homes are operated on a not-for-profit basis under the Charitable Institutions Act by a range of religious, ethnic, community and other charitable organizations.

OANHSS -- Ontario Association of Non-Profit Homes and Services for Seniors -- represents not-for-profit facilities; the municipally-owned and operated facilities and those owned and operated by charities. The not-for-profit sector operates a total of 25,515 beds compared to 31,475 beds operated by nursing homes.

Prior to 1993, nursing homes came under the jurisdiction of the Ministry of Health, while municipal and charitable homes for the aged came under the jurisdiction of the Ministry of Community and Social Services. In 1993, with passage of the Long-Term Care Act, all three groups were brought together under the Ministry of Health. As required by that legislation, operators of all three types of facilities must enter into an annual Service Agreement with the Ministry of Health and Long-Term Care that includes a budget package and the programs and services that may be provided in each facility.

The Ministry provides per diem funding for each resident at each nursing home, municipal and charitable home for the aged. The per diem rate is identical across the three types of facilities.

The per diem is divided into what we call three "envelopes”: One is Nursing and Personal Care; the second is Programming and Support Services; and the third is Accommodation.

Currently, the average per diem rate per resident is $102.62. The government portion of the per diem is on average $62.60 and the resident contributes on average $40 towards the per diem. The fee structure for residents of long term care facilities is regulated by the Ministry of Health and Long-Term Care and is the same throughout the province.

I mentioned that the current per diem provided by the Ministry is $102.62. This includes the one-time $30 million increase provided last October, ($30 million spread over the six-month period from October 1, 2001 to the end of the fiscal year) and an additional $30 million this fiscal year. Although $60 million sounds like a large number, and we are grateful for whatever we get, this amounts to a per diem increase of $2.60, based on a CMI of 100. When broken down among the three "envelopes", it amounts to an increase of $1.33 for nursing and personal care, 13 cents for programming and $1.03 for accommodation. In human terms, it means three more minutes of nursing and personal care per resident per day.

At the risk of complicating things and confusing everybody, I might also mention that supplemental funding is provided by the Ministry of Health and Long-Term Care.

With that as background I would like to speak to the funding challenges that face the long term care facility sector.

I trust that it goes without saying that the residents of our facilities deserve the highest level and quality of care that can be reasonably provided and I can assure you that this is the objective of every single member of OANHSS. Residents of long term care facilities have been productive members of society who have paid their taxes and have otherwise contributed substantially to society. Many are vulnerable because of their physical or mental conditions. We believe that society owes it to our seniors to provide the best possible care, in the same way that we will expect the generation behind us to provide us with the best possible care when our time comes.

I know that this Committee, and indeed this government, must get tired of endless requests for additional funding and claims that this or that sector, or this or that activity is in a crisis state because of inadequate funding. Our members acknowledge that the current economic and fiscal situation makes it difficult for the government to contemplate substantial new funding for anything, no matter how urgent or meritorious. We sympathize. Our members live in that economic environment too.

Nevertheless, it is incumbent upon me to tell you that the long term care facility sector is in a crisis state and does have an immediate and compelling need for substantial, net, new funding.

According to a study by PricewaterhouseCoopers that examined ten jurisdictions, the level of service in Ontario now lags behind every country, Canadian province and U.S. state examined, namely Mississippi, South Dakota, Michigan, Maine, Manitoba, Saskatchewan, Sweden, Finland and the Netherlands.

Our members are increasingly frustrated and concerned that they are significantly limited in their ability to provide innovative, responsive, quality care, services and programming for their residents. Residents have an increasing need for more assistance with the activities of daily living. Dementia and mental health problems affect a majority and are on the rise; and almost all are at risk of injury and cannot cope day-to-day.

Currently in Ontario, our mothers and fathers, our family members who are residents of Ontario long term care facilities have access to less than 15 minutes of care a day from a registered nurse, are provided with about two hours of total nursing and personal care a day and are fed on a budget of $4.49 per day!

We are failing our obligation to our seniors to provide them with adequate care.

Resistance to providing the funding required only postpones the inevitable. Because of the demographic "graying of Ontario", the situation can only get worse. In Ontario, the 85 plus age group is forecast to increase four-fold by 2028.

The number of persons with Alzheimer's disease is expected to triple over the next 30 years. According to Ministry of Health and Long-Term Care statistics, the number of people with dementia will increase 85 percent by 2020. We can inject substantial net new funding now, or pay considerably more in the future--and that future isn't all that far away.

In addition to pressures caused by demographics, our facilities are experiencing pressures because of things that are happening elsewhere in the health-care system. Because they too are dealing with funding constraints, hospitals are releasing patients with unprecedented levels of acuity. Many of those patients come to our facilities and we have to have the equipment and professional health-care services necessary to provide the enhanced levels of care that are required.

Total government funding to the long term care facility sector now amounts to $1.6 billion. We believe that funding has to be increased to $558 million in order to provide the levels of care that our residents deserve and reasonably require. This is based on the current bed base of 57,000. The total amount would have to be increased to $683.8 million to accommodate 77,000 beds. This would increase the per diem rate to $126.65 per resident.

Again, I acknowledge that $ 558 million is a large number. For that reason we are asking for multi-year funding that would allow an immediate infusion of 50 percent up front, or a per diem increase of $12, with a 25 percent increase to follow in years two and three.

However, I respectfully suggest that if the long term care facility sector were adequately funded it would take pressure off other health-care sectors and thereby reduce costs in those sectors. One of the failures of our health-care system is that we rarely approach health-care in a systematic way. For example, long waiting lists for long term care facilities amount to "bed blockers" for public hospitals. The lowest per diem operating cost for a bed in a public hospital is $400. As you can see, our proposed per diem rate for long term care facilities pales in comparison and would represent a considerable saving over the cost of a hospital bed.

If I can also put in a plug for the not-for-profit sector, we believe that we are particularly efficient at the delivery of care. Any surpluses that happen to occur in our accommodation pot are reinvested in care. We also have the support of a range of unpaid, but deeply committed, volunteers. Accordingly, the government can receive considerable bang for its buck by investing in the not-for-profit sector.

Mr. Chairman, I thank you and the Committee for its attention and welcome your questions and comments.

C	ontact OANHSS

OANHSS members include not-for-profit providers of long term care, services and housing for seniors in Ontario.
Members include municipal and charitable long term care homes, non-profit nursing homes,
seniors' housing projects and community service agencies.