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Is the bottom line really to blame for nursing home failures?

A new scandal is erupting in the care home sector. A Nordic nursing home has been found to be falling far short of the standard of care its residents have the right to expect, and an angry public wants someone to blame. Yesterday, the CEO of Finland’s largest nursing home group by revenue fell on her sword, stepping down as her company Esperi came under increasing fire.

Private companies in this situation are an easy – and in this case justifiable – target. But the problems in the care home market run far deeper and raise wider questions. At its core, the problem here was staffing.

And it’s not just the public taking note – Finnish politicians are raising questions now about the for-profit sector’s ability to deliver care and the morality of allowing them to do it.

This isn’t the first time the Nordic private sector has been under fire for failing to meet care standards. In 2011, Swedish nursing home group Carema was hit with a similar scanda amid allegations of avoidable deaths and undernourishment. Carema’s CEO left some months later. Today, the company has been rebranded as Vardaga and operates as part of Ambea, one of Sweden’s biggest private operators. The company showed customer satisfaction levels of 84% two years later. But after one too many scandals at Carema, a for-profit company’s bottom line was seen as the problem and the private sector was temporarily disgraced.

If public opinion turns in Finland, could go downhill for private operators? For a decade, the country has been toying with health reform that would substantially increase the private sector’s addressable market. It is about to go to a vote before Finland’s parliamentary election – but will it pass?

The uncomfortable truth for Finnish public opinion is that social care simply can’t do without the private sector. Only for-profit providers will be able to deliver future capacity for the elderly, and are already in the process of doing so. Both Attendo and Ambea have huge pipelines with plans to build thousands of new beds as baby boomers enter the age of dependence. No public establishment has the funds to undertake such activity.

What’s more, the public versus private debate could detract from a serious issue that should be getting more attention: staffing shortages. The entire sector struggles with the recruitment of care staff. In Germany, operators have begun recruiting nurses from the Philippines and even developing training academies abroad. An account of Finnish public elderly care provision in 2014 by journalist Thord Eriksson found there was little difference in the care provided by public and private facilities. Both the public and private sectors are tackling the same problems of staff and funding – in France over the last year, staff from public psychiatric institutions have been striking due to untenable staff shortages, which make the provision of adequate basic care impossible.

And in a newly released survey in Finland, the private sector was found to be reliably delivering better elderly care overall than the public sector.

And so we come full circle. Is the bottom line to blame for nursing home failures? Occasionally. Profits on the Finnish market are slim due to municipalities tendering these services, and competition is keeping them under control – efficiency and cost reduction on this market need to be well managed. But add to that serious staffing problems and you’ve got yourself an issue that needs serious regulatory attention – whether you’re private or public.

We would welcome your thoughts on this story. Email your views to Anaïs Charles or call 0207 183 3779.