Privatized P3s: "transferring the risk" to the elderly and most vulnerable

As noted earlier, Britain's largest nursing home chain, Southern Cross is going kaput, and despite all the chatter from government proponents and business about how such public private partnerships (P3s) transfer risk from the public to the private, it is the most vulnerable members of the public who are taking it on the chin.    


Some useful comments from Max Pemberton of Britain's leading (and normally conservative) newspaper The Telegraph on how this privatization deal transferred the risk to the elderly and most vulnerable: 

While the Government insists that no residents will end up homeless as a result of Southern Cross’s collapse, ministers have been unable to give assurances that residents will not have to be placed elsewhere.

There is a wealth of research to show that moving individuals who are settled in nursing homes has a severe impact on their well-being. There is a clear correlation between such upheaval and an increase in morbidity and mortality. There is also research to show that elderly patients with dementia are more likely to experience a deterioration in their symptoms, becoming more confused, disruptive and requiring higher levels of personal care when moved to a new care home.

Those with learning disabilities exhibit signs of emotional distress and depression, often resorting to self-harming behaviours such as headbanging or hand-biting. These institutions have become ''home’’ to the residents, and being forced to move home is a disorientating, scary and bewildering experience for a group of people who need stability and routine. Yet, because a private company provides their care, there is nothing that can be done to ensure they are protected from this.

This situation has arisen because Southern Cross was bought by private equity firms which effectively asset stripped it using the controversial “sale and leaseback” strategy. This meant that the homes owned by Southern Cross were sold off to more than 80 private landlords, thus releasing their equity, and then leased back to the company. When rents rose and income dropped, the company ran into problems and folded.

It is a horrifying and timely warning to those in the Government seeking to increase the role that private providers have in health care. Under the current NHS reforms, situations such as this will only increase as more responsibility for care provision is handed over to private companies.
This must not be allowed to happen. We must protect those who have no voice from losing their homes, and ensure the debacle of Southern Cross, with its tragic consequences, is never repeated. In the pursuit of profits, it is the vulnerable and infirm that suffer while shareholders get rich.

Dot Gibson, general secretary of the National Pensioners Convention, said: “There is little doubt that forcing residents to move will in some cases have fatal consequences.  Serious questions should be asked as to whether having 80 different landlords in charge of 752 care homes is a proper way of running our social care system. How can the interests of some of our most vulnerable older people be protected when profit is the driving motive?”

Asked whether the likes of  Southern Cross chief executive Jamie Buchan will be paid for a full year's work even after Southern Cross ceases to exist, the company has no answer.  Company big wigs may be paid to do nothing. 

Meanwhile, local governments are stuck with the responsibility to make sure the elderly get care.  


And this may not be the end: Laing&Buisson report that "more operators of residential care homes for the elderly could be forced into administration thanks to ever tightening margins".