Who pays the price for the commodification of care?

The ‘silver economy’ is the term coined for the market developing around the needs of the ageing population. For many policy makers, it promises economic growth and the creation of new jobs. But more and more evidence is coming to light which challenges the compatibility of market ideology with quality elderly care. The limits of profit-making in the care sector are becoming increasingly clear.

Who pays the price for the commodification of care?

Following a series of care sector scandals that emerged throughout the pandemic – including the disproportionately high death rate in residential facilities and reports of human rights abuses – the latest was caused earlier this year by a French investigative journalist, Victor Castanet. After three years of investigations, over 200 interviews and help from a few key whistle-blowers, Castanet’s book ‘Les fossoyeurs’ (The Gravediggers) delivers a damning exposé of the multi-national care provider Orpea, from elder abuse to workers’ rights violations.

The Orpea Group is Europe’s largest for-profit care provider. Originally French, the company has rapidly expanded and today has over 1000 facilities across 13 European countries, from Spain to Belgium, to Germany and Poland. In the "Les Bords de Seine" residency in France, rooms start at nearly 6,500 EUR per month, and go up to 12,000 EUR a month. In 2021, the company reported over 100 million EUR profit.

But despite reporting high profits and charging elderly people and their relatives six times more than the average nursing home, according to Les fossoyeurs, many Orpea facilities in France have substandard conditions. The book details untreated bed sores, rationing of food and sanitary pads, and a lack of basic hygiene, with some elderly residents "being left in their own excrement because diapers are rationed".

These failings can hardly be blamed on the care workers. Les fossoyeurs reveals how low levels of staffing make it impossible for the workers to deliver quality care for all. Another report from Investigate Europe shows that Orpea cuts further costs by excessive use of short term, irregular contracts and other ways of exploiting workers. According that report, “recruits have to sign fixed-term contracts that indicate that they are replacing employees with permanent contracts. In many cases, however, these permanent employees do not seem to exist.”

These revelations raise serious questions as to Orpea’s use of the money paid by residents, as well as large the sums of public funds it has received. Because while the group has been cutting costs on residents and workers, it has been building a property empire.

A new report from CICTAR states that the income from Orpea’s facilities, including public funds, is redirected to finance property investments rather than care. The report claims that the group’s property portfolio, valuing now at around 7.4 billion EUR, has been “purchased and sold through a complex maze of corporate structures from Luxembourg to the British Virgin Islands, largely hidden from the company’s own shareholders and the public." In fact, thirty-seven of the forty Orpea companies identified in Luxembourg have never been disclosed in Orpea’s public reporting, despite the fact that they hold tens of millions of euros in assets.

Whilst these reports have embroiled Orpea in scandal in several countries, they do not come as a surprise to public service trade unions. Care workers have tried to speak out about these issues in the past, but the group has a long history of intimidation and violation of trade union rights. In 2019, Orpea in Poland dismissed the leader of the local union. In another example, the chair of the Orpea German subsidiary Residenz-Gruppe’s Works Council and chair of the European Works Council (EWC) was dismissed. This led to a court case over workers’ rights and trade union rights. Despite repeated failures in court, Orpea is still pushing to prosecute the chairperson. In their attack on trade unionists and workers, Orpea's subsidiary has even gone as far as to hire a private detective agency to intimidate unionists in Germany.

The issues that arise from profiting from care are not limited to Orpea. Similar concerns regarding the treatment of workers and residents have been raised about other multinational for-profit care companies. A 2019 Investigate Europe report suggests that deficiencies stem from increasing privatisation and a lack of government quality checks and controls. The report looks at the issue of for-profit care provision in 15 countries, from Portugal to Sweden, and the results are largely consistent with concerns repeatedly raised by the European Federation of Public Service Unions. It is shown that some corporations actively hinder their workers from unionising, that several financial investors in the care market are involved in tax avoidance, and that privatisation is often accompanied by cuts in staffing levels and deficiencies in the quality of care.

This gloomy view of multinational care companies shows some of the risks associated with the booming silver economy. Far from creating growth and quality jobs, the commodification of care often redirects public funds into shareholders pockets and off-shore tax havens, and is propped up by low-staffing levels and precarious contracts. The COVID 19 pandemic made clear that health is not a commodity, and the same must be said about care. It is time to reverse the growing trend towards the commercialisation of care services.

It is hoped that the upcoming European Care Strategy will propose measures for public investment in care. But this should be connected with measures to place checks and balances on commodification. Profit should be directly reinvested into the sector to improve the accessibility and quality of care and to ensure good working conditions. A human rights approach, not an economic approach, is needed to address the dependencies of Europe’s ageing population.

Tuscany Bell and Adam Rogalewski, EPSU

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