Important to recognize 2 distinct components of LTC: capital & care. Evidence says private sector is good (efficient) at former and not so good (too efficient?) at latter. Idea: two licenses—capital (ie 25 yr lease) and care (5 yrs based on quality). https://twitter.com/drbobbell/status/1354536866071126023

Many LTC owners are just developers / financial vehicles and care isn’t something they specialize in. That’s why many outsource operations and spend a lot of effort lobbying govt to redevelop the C/D beds they acquire. Care just seems like a side biz until they can tear it down.

Wouldn’t be hard to move to a 2-license system. Capital & care already two distinct funding streams. If you built a 260-bed LTC today, you’d be guaranteed $2M/yr “construction subsidy” over 25 yrs plus $13M dev grant = LT lease with upfront incentive.

It might cost you $50M to build the home (minus $13M in dev grant) so NPV+ especially after adding in per diem accommodation $ over the lease period. Nice return on capital if you’re into that kind of thing.

Importantly, care would be licensed on basis of quality w/ shorter duration (& leash). Or, could be a public LTC agency that operates homes, at scale. Crazy to me that we have 78,000 beds in ON and no single operator has >7% share, not even big chains. Care variation is huge.

The outsourcing of LTC operations (by FP/NFP/municipal) which I wrote about previously might in fact just be the quest for scale. Like, if you owned a single home, why would you want to reinvent all the wheels, have no purchasing power, have your own IPAC etc. It’s nonsensical.

The for-profit debate needs more nuance I think. Separating out capital from care allows you to see the options more clearly no matter your stance. You might say that govt is more efficient at accessing capital on bond market and should build/own but that’s not a care issue.

You might even say that govt should take on debt and buy out all the existing homes, but again that’s not a care issue. It’s only a care issue under the current paradigm where we link care to access to capital in one license, but it doesn’t have to be that way.