Privatisation and Care homes

Any attempt to improve care of the elderly in private care homes will be utterly futile if such care remains in the hands of debt-ridden private equity funds. The Swedish experiment with privatisation mirrors that in the UK, which does not see a week without a report of serious abuse and neglect of the elderly.

‘Certainly one of the most extreme examples of market-optimism and anti-statism comes from the Stockholm County Council. Between 1998 and 2002, when a centre-right alliance controlled the county, public property for SEK 30bn has been sold off in the region of Stockholm and 25% of the social services have been outsourced to private providers. Deregulation and privatisation have particularly touched the health system including care for the elderlyBy 2008 all of Stockholm’s major hospitals had become public limited companies (plc) and 100% of Stockholm county’s wards were in private hands. The outcome of this situation provides an impressive and depressing summary of everything that critics of neoliberalism think is wrong with private provision of public services.

Rather than decreasing, the costs of health services rose by as much as 12% in one year, leaving the council with a deficit of SEK 2.4bn by 2004, while the now private wards made handsome profits. Even more disturbingly: the shareholders of the now incorporated wards – in many cases the formerly council-employed GPs – paid themselves dividends amounting to as much as a million SEK per year (Dagens Nyheter, March 3, 2007).

The Council was accused of selling off the wards basically at the inventory price – not including any goodwill as would be the case in a takeover of one business by another. The Council justified this sellout of state property as a subsidy to start-up companies, which was what the new private wards were considered to be.

The rising costs were explained not by the increasing profits that went into private pockets, but by a lack of competition. (The same lie spun about the UK energy market). There were simply not enough private providers on the ‘market’ and competition was not fierce enough. Stockholm County Council next elaborated  a new programme called “Ward Choice Stockholm” in an effort to bring down costs. Ward Choice Stockholm – which entered into force on January 1, 2008 – aimed at stimulating competition between health care providers, by cutting subsidies and making payment of services dependent on some simple metrics. The new metric that would determine how much the Council paid health care providers was the number of patients that they treated in a given period of time.

Yet, over the past months it has become increasingly apparent that the reason for Carema Care’s competitive pricing may derive not from economies of scale but from a wholly different source. Since early October 2011, Dagens Nyheter has run a series of articles about alleged shortcomings in the caring standards at two of Carema Care’s nursing homes in Stockholm. DN had been granted access to reports from nurses in different elderly care homes run by Carema Care, complaining about working conditions and the standard of the facilities. The complaints concerned mainly cost cutting in terms of not replacing staff, cutting the budget to buy such basic necessities as toilet paper, soap and incontinence pads. The company had also ‘made redundant’ cleaning staff at one home, asking caring staff to do the cleaning themselves – with the only exception being the day before announced inspections when a professional cleaning service provider would be brought in.

Why should the British public care about this tale from the North? Beyond, the obvious lessons to be drawn from the Swedish horror stories in the context of the current debates about the Health and Social Care Bill, the UK played a direct role in the changes in Swedish welfare services. Indeed, Ambea – the holding company that owns Carema Care – was owned between 2005 and 2010 by the London-based private equity and venture capital fund 3i. The fund bought the holding in 2005 for SEK 1.85bn and resold it in 2010 for approximately SEK 8bn to Triton – an investment fund owned by several Swedish citizens – and KKR – the famous US private equity firm.  When the company was taken over, KKR and Triton also extended large loans to the company and loaded it with external debt.Overall, Carema Care has debt to service amounting to SEK 8bn, approximately half of which stems from the two private equity firms that own Ambea. What is more, the loans from KKR and Triton were made at an interest rate of 12% – well above the current market rates for such a loan‘. (

‘An assistant nurse has been reported after forcing a roll of tape into the mouth of a patient with dementia at a Carema-run nursing home in southern Sweden. We’re taking this very seriously and have filed a Lex-Sarah report,” said the head of the home to the local Smålandsposten newspaper. The incident occurred at an elderly care home in Växjö,  southern Sweden, and was reported by one of the nurse’s colleagues last week. According to the paper, the nurse forced the tape roll into the mouth of the dementia-sufferer when attempts to subdue the patient’s aggressiveness failed’ (, Sept. 19, 2012).

‘Two nurses at a senior citizen’s home in Norrköping, Sweden are back on the job after they were suspended for a few weeks for verbally and physically abusing patients, according to the Folkbladet newspaper. When a patient protested against the nurse’s painfully hard grip, the nurse responded “don’t touch me with your disgusting fingers,” and “you’re lying where you are, and I’d like to see you try to catch up with me,” reports Folkbladet. On another occasion, the same nurse chose not to clean up a patient’s vomit, instead deciding to press the vomit back into the patient’s mouth, using a bib. The other nurse slapped a patient hard on the behind, pinched her stomach and shook her breasts, and pressed another patient’s fist into her mouth. This gruesome maltreatment, taking place over two days in March, was discovered by another employee, who then reported it. The behaviour of the two nurses was deemed so serious that it resulted in no fewer than five Lex Sarah reports, a law obliging staff in the care industry to report instances of mistreatment to social services. Despite this, the two nurses are now back at work after a suspension of two months for one nurse, and three weeks for the other. “The personnel department didn’t think there was sufficient cause to fire them,” said Teresa Påhlsson, district manager of another area in Norrköping municipality, to newspaper Svenska Dagbladet ( , 7/7/2011).

Carema Care was hit by a series of scandals last year, when a slew of incidents ranging from unchanged diapers to poor working environments saw patients suffering due to cost-cutting. The scandals led to raised concerns at the time for tightened quality control of elderly homes as well as an ongoing debate about the role and responsibilities of private companies operating in the care sector. The nurse has since been fired. “The person in question has engaged in conduct which should never occur and the other workers have been informed of the dismissal,” wrote Carema Care in a statement on Wednesday, according to the TT news agency. Kommune´s like Carema as they are the cheapest and what could be more important ? There are 92 old age pensioners residing at the Tallbohov nursing home, run by care company Carema, in the Stockholm suburb of Järfälla. Staff and ex-employees have told DN that there often wasn’t enough toilet paper, paper towels, alco gel, or soap to keep the place or the patients clean. Sometimes, staff told the paper, the toilets would be so filthy that staff wouldn’t sit down on them. According to the staff, the management want them to do all cleaning, as well as repairing medical equipment, by themselves. “But we haven’t the time nor the expertise to do that,” an ex-employee said to the paper. The day before health inspectors were due this year, an army of cleaners arrived at the home. All areas were thoroughly vacuumed and scoured, and all dispensers of soap, alco gel, toilet paper and rubber gloves in the pensioners’ rooms were filled up. “Carema ought to be ashamed of themselves. They should keep the place clean both for the elderly and for the staff. Not to scam the inspectors,” said one of the nurses to DN. The cleaning used to be done by two cleaners but in a bid to save money, the company chose to add it to the staff responsibilities (, Sept. 19, 2012).

The need to make economies have also had another, more dire, consequence according to the staff who claim that the management question every prescription that would cost them money. Another area where savings have been made are the residents’ beds. Earlier this spring one resident’s bed broke, which was solved by requisitioning that of another patient, making him sleep on the floor for several months. A third patient was too tall for his bed, but it took six months before he was given a new one, despite pleas from staff who were forced to tie his bed together, according tot he DN report’. “And when something ran out, it was out. Whether it was a question of diapers, food or toilet paper.” According to the employees, management solved staff shortages by making personnel from other departments fill in 20 minutes here and there over the course of the day. When staff tried to complain they were not met with understanding. Eventually they went straight to the municipality’s medical officer. This was not appreciated by Carema’s management, which told them that anything that happened at the home should stay within the walls of the facility.

‘Workers in old people’s homes should be allowed to report poor conditions and mistreatment of the residents anonymously, according to Social Welfare Minister Maria Larsson.She says too few reports of bad practices are being sent in, and worries that it is because nurses and other staff are afraid of reprisals from management if they raise the alarm. A law in Sweden, called ”Lex Sarah”, means that carers are obliged to tell the authorities if they suspect malpractice, and the minister says she wants to amend the law to guarantee anonymity, and hopes more would then dare to come forward (, April 19, 2009).

‘The reason why alarming reports never stop coming is that politicians are shirking their responsibilities and referring to employees, authorities, municipalities and care companies,’ wrote Håkan Juholt in daily newspaper Dagens Nyheter. Venture capital firms, existing first and foremost to maximize profits, have no place in tax-financed elderly care, he opines’.

Blog Responses:

‘Did the state hire the company with the best history, care, expertise, etc., or did the state seek to employee the company that was least expensive or a company based on good-old-boy connections’? ‘I don’t know, and nothing excuses the abuses of Carema, but these abuses seem to have been known for some time. Why did no one within the state, which hired the company, immediately seek legal action to address these abuses or seek social welfare representatives to immediately correct the inhumane conditions? Carema should have been fired long ago’. ‘If a parent hires a babysitter and the sitter abuses the children, it’s expected the parent would take immediate action, not look the other way and continue to subject the children to abuse’. ‘If a private industry can’t turn a profit from a given field and provide services effectively, maybe those services should be undertaken by the government which doesn’t have the requirement to turn a profit and is accountable to the public at large rather than a group of wealthy shareholders who have no vested interest in the quality of the service provided but rather the monetary bottom line’.

‘Attempts at privatizing elder care have historically been failures. These are human beings, not machines being turned off a production line. This debacle simply emphasizes the importance of recognizing the limitations of privatization. Perhaps the powers that be would be more attentive if older people and their families voted with this in mind’.

(, Nov. 12, 2011).

The Swedish experience is mirrored in the UK, which encourages private equity firms to trade in the  market of people for profit. This system cannot be made to work through various complaints procedures, which merely detract from the fact that the whole rotten system of elderly care in the UK needs scrapping, and replaced by a fully funded nationalised alternative, in which workers’ committees oversee best practice, and set their own staffing levels, and in which all serious neglect and abuse and not reporting it automatically leads to criminal prosecution and barring from  future employment in any area of care.

All care workers within this industry should attend a 16 week course in aspects of elderly care, as Californian provisions dictate, prior to taking a job in care.

Foreign nurses should only be deployed in elderly care when UK nurses are not available.

First published on Nurse Blog International