Excerpts
In Norway, the term bendelormøkonomi, coined to describe the profitization of care, has a certain ring to it, but its English translation is downright genius: the tapeworm economy.
A tapeworm economy emerges when governments finance profit-seeking corporations in systems of publicly funded care as they create chains, often backed by private equity. It is just like introducing a parasite that slowly robs the body of nutrients and destroys its organs.
A new report examines trends in Sweden, Norway, the United States, France and Great Britain, where the pursuit of profit by financial capital is systematically devouring public funding, eroding quality of care and degrading working conditions.
Sound familiar? It should: The tapeworm economy has arrived in Ontario, and we need to control it.
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Canadian private equity is dominated by the pension funds of Canadian workers, representing approximately $3 trillion in assets, one of the biggest pools of investment savings in the world. In 2000, about 28 per cent of these funds were invested in Canadian equities. It's now below four per cent.
The federal finance minister has expressed interest in bringing our money home to invest in our future; but we should avoid including our care economy in the mix, based on how some players have produced profit in the care sector of other nations.
Trading in care
Rule one: Private equity loves predictable cash flow. There’s nothing closer to a guaranteed monthly cheque than services that support a population’s welfare: physical infrastructure such as utilities (water and electricity) roads and ports; and social infrastructure like health care, child care and long-term care.
Demographics all but guarantees that the care economy will grow. The backing of the public purse makes it a dream investment.
Since the pandemic, private equity bought out a lot of Canadian veterinarians, dentists and pharmacists, and nursing homes. Now it’s moving into more deeply publicly subsidized territory: primary care clinics, day surgeries, diagnostic facilities, home care and child care.
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In a labour-intensive sector like care, common ways to generate profit is to cut payroll costs or mark up the value of the care you provide.
Luxury and up-market sales exist in every sector of the economy and may be expanding for care as more people, appalled by breakdowns in public systems, are increasingly willing to pay out of pocket. But down-market is the biggest market, and it gets a singular type of makeover — fewer and less qualified workers to serve the people who are too young, too sick or too old to take care of themselves.
Lower pay, fewer benefits and more precarious hours make for higher turnover and worsening care. As Canadian academics Pat and Hugh Armstrong say: “the conditions of work are the conditions of care.”
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More for-profit child-care chains pop up in malls every day. A few months ago the province watered down rules for those who care for children ("greater flexibility in staffing” and “broadening qualified staff requirements”). Weeks ago it demanded “value for money” audits in publicly delivered facilities (where wages and benefits are best) to see if they could be offered by a “third party.” Coincidentally for-profit providers are lobbying for more money.
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Dr. Marta Szebehely, Swedish expert on eldercare and member of that commission, recently addressed a Canadian discussion about the profitization in health care and bluntly said: “A lot of things we take for granted we should be careful not to lose … Never start the journey (of profitization).” She named three ways to limit the tapeworm economy.
First: Keep it publicly funded and publicly managed. Raise the regulatory threshold for corporations to enter and stay in the sector. Ensure strict background checks. (Sweden has seen a rise in fraud and criminal actors in the field.) Don’t sell publicly owned real estate to the private sector. After all, if it’s so good for investors, why isn’t it good for taxpayers? Buy back operations from providers who fall short of regulated requirements and forbid their re-entry.
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Second: The private sector includes non-profits. They need clear rules. Restrict how much management can make. Publicize staffing requirements for both quantity and quality of care. Ensure public subsidies for training, wages and benefits that attract and retain needed workers. Enforce the rules.
Finally, sectors heavily reliant on for-profit providers (as we are in Ontario for long-term care) require more results-based regulations, which depend on staffing levels and qualifications. Corporations accepting public funding must open their books with regard to sources of revenue and where profits go. Public funds should not be used for dividends, stock options/bonuses and other non-care related expenditures. Remove funding from corporations that break the rules.
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Every day, the tapeworm economy grows. The escalating profitization of care gobbles up funds that could improve care. If our appetite for care doesn’t eclipse corporate appetite for profit, we’ll become a very weak society indeed.
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