ESSA

ESSA

Old folks, new monopolists: the age of the nursing home


Olivia Robins

By

June 9th, 2014


Olivia Robins discusses the dangers of market power in nursing homes.


A few years ago, my mum and my aunty decided that is was time to put my grandmother in a nursing home. After searching for many months, they found a place which would take good care of her. The staff were nice and attentive, the place was warm and cosy and it seemed like my grandmother could really fit in.

For more than two years, my mum and my aunty were content.

Until: one day, they came to visit at lunch time, and the place was bedlam. The residents were distraught, some of them were crying, their children were complaining to the staff and causing a ruckus. Quickly, my mum and my aunty discovered what happened. There was a new catering service; and it was bad.

Very bad.

My grandma was distraught: she refused to eat the horrible food. My mum quickly complained. She talked to the staff, she emailed the company that ran the nursing home, and she emailed the new catering company. In no time at all, she had arranged a meeting with representatives from the nursing home and the catering company.

They were very understanding of my mum’s and my aunty’s complaints. They discussed their budget cuts, but that there would be measures taken to ensure tasty and nutritious food in the future. My mum and aunty came out of the meeting quite pleased with themselves.

But, things went back to normal just a few weeks later. Mushy vegetables, over-cooked meat, powdery potato mash; just as before. So they had another meeting, and another, and another. The staff said all the right things, but did not put their words into practice.

In this situation, the nursing home is a monopolist within this microcosm of an economy. Not many of the residents ever leave the nursing home, so inside it walls, there are many ‘buyers’ (the residents) and one ‘seller’ (the nursing home).

Once you are in a nursing home, it is very difficult to leave. The residents there are set in their ways; they do not like change or upheaval. In many cases, it would not be viable for them to move. So, it is more likely that nursing homes are concerned with bringing new people in, rather than giving the current residents the best quality food possible.

There are two things that stop nursing homes from producing very poor services. The first: health and safety regulations. The second is reputation. But, many of the residents do not have a capacity to complain, and many do not have their children visit them often, and not around meal times, as my mum has noted.

Sixty per cent of residents in nursing homes have dementia. I know from seeing my grandma, if you have dementia, you often cannot control your actions. You can’t make judgements, because you get confused easily and you can’t remember past actions and events. Therefore, most residents cannot make informed, sensible decisions. So, the traditional economic models starring the ‘rational consumer’ are not applicable. Nursing homes can take advantage of this. My grandmother’s one certainly did. There is less of a capacity for the ‘consumers’ in this microcosm economy to complain. And even if they did complain, many of them are cut off from the outside world. Generally, they neither know what the internet is, nor use it to their advantage to spread the word. In many cases, it falls naturally on the children to exercise power to initiate change.

For those in nursing homes, there are two potential sources of food. The first and primary source is the meals provided by the nursing homes. The second source is either their children bring them or when they eat out with family. But, for most, this is not a stable source of food: my mum notices that the majority of the residents do not get half as many visit or outings as my grandma.

What is to stop nursing homes from running a near dictatorship? Well, for nearly 6 months, there hasn’t been anything stopping the catering from doing so at my grandma’s home. Except my mum and my aunty, that is.

There are not proper online forums established for aged care homes. The website agedcarereviews.com.au does not have information on my grandma’s nursing home. It is listed, but with zero reviews. I searched for nursing homes in the Melbourne CBD area: there were many pages, but very, very, very few reviews at all. In order for the market to be more competitive, in order for consumers to have close to perfect information, websites like this should be more accessible, with more community support and publicity. What someone sees on a tour of a nursing home, and what someone knows from having their parent stay there for three years is extremely different.

And nursing homes can easily take advantage of this: they know, once you are in, it is very difficult to get out. And, there is no guarantee that another nursing home would provide better care.

Nursing homes, though, cannot cut corners on everything. They provide a few things for residents: safety/basic needs and a good quality of life. Most nursing homes satisfy the first criterion; if they didn’t, they would likely be found out, and shut down. Or it would be all over the news. But the second criterion is more subtle, and can be more easily over looked.

Yes, my grandma’s home provides her sustenance (albeit not particularly nutritious), but it does not provide that which can be enjoyed. This risk of not supplying this ‘quality of life’ is much lower; some people think: “oh well, at least my mum/dad/uncle/aunt etc is safer here than at home” and put them into care regardless. Or, they simply cannot afford any luxury. Demand for nursing homes is quite inelastic: if you need one, you need one. Therefore, some nursing homes may think they can afford to maltreat or disregard their consumers – especially once they have paid for the service – in order to cut costs. It is difficult for many residents to relay this mistreatment to loved ones, as many cannot remember.

With the percentage of the elderly rising within the next half-century, the issue of nursing homes’ power will become more and more relevant. In 2007, thirteen per cent of people were aged over 65. In 2056, it will be 23-24%. So, as more and more people go into care, children and other family members will have to become more aware of the living conditions of their loved ones in order to prevent the nursing home from going towards monopolistic tendencies.

And that is just what my mum and aunty did. After a year of fighting against disgusting food, finally there was justice. After a particularly bad meal, residents and children realised they had enough. For once, it was not just my mother speaking out. With a united voice, the whole nursing home spoke out. In order to combat the ‘monopoly’, they complained in unison. Residents, who are usually quiet and subdued, protested against the sub-par food. Perhaps they are not quite as compliant as was thought. The chef quit soon after. In this situation, with many ‘irrational consumers’ and a natural market monopoly, it is not possible to take economic action. Instead, political action had to take place.

To some, it may seem unimportant whether my grandma gets good food. But, we must take note of the effects of markets embedded in institutions. These can create excessive power, and the desire to exploit it.

But, with a united front, hopefully we can keep the monopolist at bay.

Image: ‘Last station nursing home’ by Ulrich Joho, https://flic.kr/p/7dQsWK. Licence at https://creativecommons.org/licenses/by-sa/2.0/. by-sa

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

  • Owen Wakely

    This is a terrific article Olivia about an issue that doesn’t get discussed enough. Aged care is arguably the biggest social and financial issue faced by developed economies in the 21st century. The nursing home model is broken, as your article highlights out so poignantly. Why not have Nursing homes run by members (i.e. families that purchase units of accommodation and care)? It could be run like strata title apartments with decisions being made by the residents or those representing the interests of the residents, like a body corporate, on matters like food and catering cleaning etc. This issue is far too important to be ignored. Well done Olivia

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