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

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

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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 unionized 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. 



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