"Nursing homes are high risk. Investors should treat them that way"

Even before reading this shocking article in "Responsible Investor" I had asked Newham Council Pension officers to assess what exposure the fund has to investments in residential and home care companies.

"Investors have been doing the groundwork on ESG in the mining industry. Covid has highlighted the need to do the same in long-term care, writes Christy Hoffman"

The coronavirus’s toll in long-term care facilities has been harrowing.

Hundreds-of-thousands of residents have died, and if current trends hold, nursing homes will join fishing boats and logging sites among the deadliest workplaces on earth.

The vaccine against the virus offers a ray of hope. However, when it comes to fixing long-term care’s systemic problems – including understaffing, precarious work, over financialization – a shot in the arm is not enough. That is because Covid-19 did not create the problems plaguing long-term care; it only exacerbated them.

Coronavirus also further exposed the human rights, legal and operational risks of investments in the private care sector. Shareholders, particularly those who consider themselves ESG leaders, must begin treating long-term care like other high-risk industries.

The right to union representation and collective bargaining is fundamentally protected in the Universal Declaration of Human Rights, but not in care facilities around the world. There, workers regularly face aggressive – even unlawful – union avoidance campaigns.

These attacks on workers’ rights ripple throughout the sector and contribute to other problems.

Last year, a coalition of investors visited Brazil to understand failures that released toxic mining chemicals into communities. This year, a similar undertaking is needed, but on a global scale in long-term care.

Union representation and collective bargaining are counterweights against the worst cuts affecting care quality. Unions demand better access to protective equipment, paid sick leave for exposed workers, and stronger infection prevention protocols. Long-term care centres with staff covered by collective bargaining tend to have more workers who are better trained with higher pay, resulting in better quality of care for residents.

A recent study found that unionised care centres had a 30% lower mortality compared to facilities without health care worker unions. A resistance in long-term care to unions, to adequate staffing and other necessary, long-term care reforms has put lives in danger, but it also creates a high-risk environment for investors.

Private nursing home chains face significant legal risks from poor care quality, especially during the pandemic. Chains are facing legal actions including lawsuits in Canada and the US. Spain has opened 200 criminal probes into care home failings during coronavirus, and more could come in Italy. There is also potentially an action on behalf of victims’ families in the UK.

In addition to human rights and legal risks, there is also a clear-cut business case that investors need to re-think an operating model that squeezes maximum profit out of the sick and elderly. After months of indelible images of disease and death permeating international media, confidence – and occupancy – in long-term care is dwindling.

But despite these growing risks, investment in care seems to be robust, and so should investors’ role in reforming how the industry operates on a global level.

Last year, a coalition of investors visited Brazil to understand failures that released toxic mining chemicals into communities. This year, a similar undertaking is needed, but on a global scale in long-term care.

Years of over-financialization, understaffing and union busting in the industry created the conditions for Covid to spread like wildfire in long-term care facilities. However, we do not have years to fix its structural flaws. It will take more than a vaccine to prevent more deaths from Covid and the pandemics on the horizon. And UNI Global Union is asking investors to work with advocates, unions, and other stakeholders to raise standards now.

It will take us all.




Christy Hoffman is the General Secretary of UNI Global Union, formerly Union Network International.

Life as a Home Carer in Modern Britain

On the 10 July I went to a well attended seminar on "Precarious work and zero hours contracts" which was organised by the TUC and "Trade Union Share Owners" (TUSO).

It was an unusual seminar since such a topic was aimed at investors and financial advisers. It was held under "Chatham House" rules but one of the speakers, Emma Clifford, has given me permission to name her and post on her presentation. 

Emma is currently a NHS student nurse but last year she worked for a private company as a home carer for elderly clients suffering from dementia. 

Her account was raw, blunt and honest and must have been particularly difficult to hear if you have elderly relatives who receive care in their homes. 

She was employed by a well known (or rather notorious) British Care company which is owned by a hedge fund which is funded in part by thousands of Local Government workers via thier pension scheme The hedge fund managers are super rich, multi-millionaires.  

Emma described how the experience of working for this company would stick in her memory for ever.  Memories of exhaustion, exploitation and even intimidation. It still makes her feel angry and emotional. Both for her fellow workers but most of all her elderly and vulnerable clients. 

It goes without saying of course that in modern Britain she was employed on a zero hour contract. With little or no employment rights, poor pay and no company benefits. 

The first thing that struck her was how disorganised they were.  Due to the dreadful working conditions there was such a high turnover in staff that no one knew when carers would turn up to support clients and their families. Many of whom were bed bound and dependent on carers coming to dress, feed, clean and care for them. Often she would do a lunchtime visit to discover that there had been no morning visit. The smell of unchanged overnight incontinent pads being the tell tale sign as she opened the front door.

She would go and lone visit a new client with no warning that the client was known to be potentially aggressive or that family members had mental health or addiction problems.

Often there was no time to properly care for her clients since she had to rush from appointment to  appointment. Due to the lack of staff she had to work 16 hour days and even once, 21 days on the trot. When she had days off planned her managers would ring her up and ask her to go in since someone had let them down. First they would sweet talk her to go in, then they would threaten if she didn't she would get no more further work and finally they would blackmail her into going to work. They would say if she didn't go into work then that nice old lady she saw last week would get no care. 

When Emma left to go and train as a nurse she whistleblowed to the Care Regulator, CQC,  who did little but at least confirmed that the staff turnover during the time she was there was a staggering 40%.

I hope the investors and advisers presents will look think long and hard about the human cost to staff and vulnerable clients from running care services on the cheap. While there is an obvious financial and reputational risk to any pension fund from being the owner or funder of an incompetent service that could eventually kill its clients or its workers.

It is also as Emma pointed out a complete waste of money in recruitment and training to churn so many staff and then let down clients.

I am convinced that the Council workers who fund such hedge funds will be outraged if they knew what was being done in their name and with their pension money.

Pension funds must be democratised and properly take account of the views of its beneficiaries who are the true owners of their money.

Pension funds are are long term investors will make money if they invest in companies that are well run, with good governance and do not exploit or harm its workers or clients.

Many thanks to Emma for her powerful and moving reminder about what is the true cost of the exploitation of those trying to care for the vulnerable.  This is not only a cost  in human terms to those giving and receiving care but also a real risk to those investors who aim to make money out of human misery.

Nationalise Southern Cross?

"We cannot just sit back and allow frail, vulnerable people to suffer, we want to see the Government taking emergency action to safeguard these residents who are all at risk - even if that means taking over the assets of these homes and running them as a going concern".  This statement is by Judy Downey, chair of the Relatives & Residents Association (R&RA)  on the BBC website here.

This is in the wake of today's 3000 job losses of staff employed by care home provider Southern Cross and the continued threat to its 31,000 elderly and vulnerable residents.

The care of the old and the infirm in our society should not be motivated by profit. British people (obviously not this current Tory led government) fully accepts this principle when it comes to the NHS but most don't "get it" with regard to other forms of caring for the elderly, the sick, the infirm and the disabled.

We forget or ignore that private sector companies only owe a duty of care to their shareholders. This duty is to maximise returns for them. So on the one hand, if you allow a massive social care organisation to be run by hedge funds and speculators ( or spivs and gamblers according to St Vince) then it is in the nature of the beast, that these companies will go bust from time to time. Regardless of the stress and trauma suffered by residents and staff from the threats of evictions and redundancy.  

Still, the government probably thinks that if Blue Cross folds due to financial mismanagement then there are still plenty of other privately run for profit schemes that residents can move into (e.g. see picture caption of home above NOT run by Southern Cross).