As the international money markets respond with a universal thumbs down to the extreme dose of neoliberalism unveiled in the Truss government’s first “mini-budget”, with the pound plunging in value against all currencies from the Albanian lek to the Zambian kwacha, it seems a good time for The Lowdown to take stock of the wider international policy context.

Unhealthy inequalities

The new British government’s determination to discard even the pretence of “levelling up” and embrace a full-throttle widening of the chasm between rich (feted with tax cuts) and poor is certain to increase the tide of ill-health and increased demand for NHS acute and mental health services.

If anyone doubts this, they should look to the situation in the USA, where President Biden has arbitrarily declared the Covid pandemic over while hundreds are still dying with it each day. The US has experienced its biggest decline in life expectancy since the First World War – with the heaviest death toll predictably centred in the poorest states and the most deprived communities.

A new report has shown that “states with the lowest life expectancy at birth were mostly Southern states (Alabama, Arkansas, Kentucky, Louisiana, Mississippi, South Carolina, Tennessee, and West Virginia) but also included D.C., Indiana, Missouri, New Mexico, Ohio, and Oklahoma.”

A recent article on the Salon website notes the for-profit healthcare system, “which limits both access to care as well as public health surveillance,” and the lack of universal health coverage have contributed to the death toll. The US has just 4.25 percent of the world’s population, but its million-plus  COVID deaths are more than 14 percent of the world’s total. 

A recent pandemic study, ‘A Poor People’s Pandemic,’ shows how the burden has fallen on to poor and low-income communities, with poor and low-income counties experiencing death rates that were twice as high as richer counties, and up to 5 times higher at different phases of the pandemic.

But of course there are winners from this brutal system. The Biden administration’s decision to end the free distribution of COVID tests and vaccines, a move predicted by the  Wall Street Journal  on August 19, is expected to lead to a “windfall for drugmakers,” generating “sales for companies — and costs for consumers — for years to come.”

The great social care rip-off

Meanwhile another comparison with the situation in Britain is the emerging pattern of intervention by private equity companies seeking smash and grab raids in pursuit of short-term profits from social care companies.  

Held to Ransom, a recent report sponsored and published by UNISON, has highlighted this problem in the UK: but a series of very useful pamphlets commissioned by Public Services International, the global federation of public sector unions, helps to understand that this phenomenon is increasingly evident in other developed countries.

All three reports were published in May this year, and respond to the Covid crisis as well as the wider issues of Long Term Care (LTC). The overview, Long Term Care: effects of private provision sums up:

“As many traditional industries continue to decline, global investors have increasingly pivoted toward the care sector, with nursing home real estate in particular functioning as a lucrative sink for financial capital. The transformation of LTC into an investment product is widely seen as attractive for investors for offering low-risk and high returns, thanks in large part to government funding, rising unmet demand, and a lack of regulation on the quality of care provision.”

It goes on to note:

“The dominant market-based model for LTC has seen incredibly uneven growth and geographic inequality, both on an international scale, as well as within countries. The developers of nursing home real estate are not guided by concerns of unmet care needs, but rather the promises of highest profitability.

“LTC is highly dependent on government financing as a source of revenue. Profit-making in the sector is understated, and clashes with public perceptions of thin profit margins due to chronic underfunding, especially in light of austerity policies.

“LTC is often seen as under-resourced, yet there is no shortage of private investment flooding into the sector. Nursing homes were a booming industry prior to the pandemic, with extremely high profitability … in some countries, rates of return for investors in private LTC have been reported to be several times higher than the average for other industries.”

And it argues that in both Europe and the USA:

“The COVID-19 pandemic has turbo-charged an investment boom, seeing a new wave of market consolidation in private LTC and the transfer of non-profit nursing homes into private ownership…”

We know of course that in the UK profit margins of the biggest care home chains rocketed during the pandemic, inflating the already sky-high level of chief executive pay. But while it works well for shareholders the model has been repeatedly shown to deliver poor value and poor quality care for patients.

“research has accumulated that shows that ownership of LTC has a significant impact on the quality of care and life expectancies of nursing home residents. A key difference that emerges from many studies comparing for-profit, non-profit and public facilities is the adequacy of staffing. Key indicators of quality – hospitalisations and mortality – have been documented to be significantly worse in for-profit facilities in the US, UK and Canada.”

For PSI the conclusion of their research is the need to fixing the care crisis, through “a shift away from notions of a ‘care economy’ towards that of the social organisation of care.”

Britain started the rot

Care Givers and Care Takers:   How finance extracts wealth from the care sector and harms us all uses the British example, which began under Margaret Thatcher in the 1980s to explain the elements of what has become an international problem:


“… long before Covid hit, another deadly trend has been wreaking havoc in care. …. The first, better- known part, is the privatisation of a sector once largely provided by the state. This has been problematic and widely criticised, for the profit motive does not sit comfortably with the care imperative, but this privatisation juggernaut has pushed steadily forwards for decades. “In 1979, for instance, nearly two out of three residential and nursing home beds in the UK were provided by the State; by 2017 this had fallen to one in twenty. 

“At the same time, austerity in many countries has meant that government spending on the sector has stagnated or fallen.”

However the pamphlet is focused on the less well-known and understood changes that have been taking place:

Academics call it “financialisation”. Some have spoken of it as ‘capitalism on steroids.’  What this means is that financial actors, such as private equity firms, hedge funds or banks, have become increasingly active in this sector as financial investors. They often deploy tools, techniques and tricks – each quite legal, many highly acquisitive, often involving large-scale borrowing – to syphon wealth out of this sector for themselves, instead of investing for better care.”

This invasion of the care sector means that pumping in more funding cannot guarantee any improvement or expansion of services:

“… if more government money is pumped into private care, extractive financial tricks may be deployed to hoover some or even all of it up, before it can reach patients and care staff. 

“For example, a new US study found that some $5.3 billion in pandemic relief went to 113 private equity-owned companies, which had a collective $908 billion in cash reserves or “dry powder” available in 2020. Many used their cash reserves to pursue aggressive new buyouts, and in many cases shed workers.”

The solutions are not necessarily easy.

“One simple and effective way to end financialisation in the social care sector is to make care public. Another approach is to regulate financialisation out of the care sector, and impose much greater levels of accountability and transparency. Even then, though, it is likely that the pressure for financialisation to creep back in will be omnipresent. Ultimately, financialisation is a curse on all sectors and in the long term should be eliminated from the entire economy.”

With special relevance to the situation in Britain under the Truss government, the report goes on to shoot down the notion that it’s necessary to give incentives to billionaires and finance capital to ensure the economy and services expand:

“We’re told that policies such as higher taxes on billionaires or tighter regulation of bank risk-taking will threaten jobs, investment and prosperity, and damage the supposed ‘engine’ of the economy …

“This report shows that the exact opposite is true: allowing an oversized financial sector to grow too big does not only redistribute wealth upwards and damage the economy: it shrinks the pie overall. 

“This ‘finance curse’ – a concept supported by widespread research from some of the world’s top academic institutions, shows how “too much finance makes us poorer.” The core reason for this apparent paradox is that once a financial sector grows beyond its useful roles, it turns increasingly to wealth extraction, as opposed to supporting wealth creation. This report lays out some of the extractive techniques at work in the care sector.”


The third, much shorter (16 page) PSI pamphlet, Ten Tricks: a short handbook of financial engineering, describes ten of the most important Private Equity (PE) tricks in simple and accessible terms. It is intended to provide a more in depth analysis of financialised techniques.

Anyone wanting to get to grips with the contradictions of social care, or understand the truly parasitic and destructive role of private equity capital should get hold of these important studies – and share their conclusions widely.

Kicking long stay patients into care homes

Meanwhile in Ontario the right wing provincial government led by Doug Ford is giving an object lesson in how government can bulldoze through “reforms” to Long Term Care that benefit only the private care home owners, and strip patients and their families of any rights.

The Ontario Health Coalition has strongly opposed the latest moves, and the following is an extract from their Press Release on September 15. 

The Ford government released its regulations under the euphemistically titled ‘More Beds, Better Care Act’ on September 15.  The legislation gives new powers to push elderly patients and people with chronic care needs out of hospitals, overriding their right to consent, backed up by the threat that patients who refuse to move will face charges of $400 per day, or $2,800 per week. 

Hospitals will be “required” to charge the exorbitant fees not only to patients waiting for long-term care, but also those waiting for home and community care. 

The new regulations stipulate that in southern Ontario patients can be sent up to 70 km away from the hospital. In the much less populous North the limit is  theoretically 150 km – but  if there are no beds available within 150 km, patients can be sent even further. Since there are no beds available (there are 38,000 people on the LTC wait list) this will happen.

The new law gives new powers to:

  • Assess a patient without their consent
  • Share that patient’s personal information with an array of health provider companies (for profit and non-profit) without their consent
  • Fill in applications for the patient without their consent
  • Admit a patient into a long-term care home without their consent, including a long-term care home that is far away, has a bad record for care, is not of the patient’s choice, does not meet their language needs, etc.

These changes may result in patients being pushed out of hospital into retirement homes, back home to wait for home care that may not materialize, or to other facilities or places.

Ontario has the fewest hospital beds of any province in Canada – and about the same level of provision as England. 

Patients in these beds who have nowhere appropriate to go are not “taking up” resources, they need care. Hospitals have always provided a range of care including chronic care (complex continuing care), palliative care, rehabilitation beds and more. Those services are of equal importance to acute care and it is not in the public interest to allow them to be cut and routinely discounted.

There is a staffing crisis, commensurate to the hospital staffing crisis, in long-term care and in home care in Ontario,. Despite repeated demands – with concrete recommendations – to get the Ford government to take real action on the staffing crisis the government has taken little real action. 

Only a minority of patients defined as needing ‘Alternate Level of Care’ (ALC) are waiting for long-term care. A significant number of them are waiting for hospital beds – complex continuing care (chronic care), rehab, mental health beds and others. 

The Ford government cynically claims that the forced moves are temporary and patients will find their way to a LTC home of their preference is also cynical. Crisis admissions from hospitals always take precedence. The forced move is very likely the last move of the patient’s life.

We may wonder how long it may be before the British equivalent of the Ford government, Liz Truss’s right wing cabinet, draw similar conclusions on how to shift the average of 12,000-plus patients who on any given day are clinically fit for discharge but cannot leave hospital for lack of social care. 

Perhaps in our case the desperate shortage of social care beds and home care services may even serve as a barrier to more barbaric solutions.

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