“People Love Working at Bupa” - An alternative view by Gregg Sheehan
“We have committed to Bupa being a place where people love to work and where they are healthier because they work with us. We are proud of the affinity our people have with Bupa’s purpose and the customer care they provide every day.”
The company only “cares” about people when there is a profit to be made, and it seems that it has to be a substantial one at that. If it perceives any lowering of profitability from (as far as I can tell), a 23% return on investment, it is quick to “disinvest its operations” as evidenced by its “forced” closure at Gisborne. (As it happens it is simply repurposing its facility into one focussing on disabled care.)
“In order to continue to operate in New Zealand , we are required to make a reasonable return on our investment by our parent company. Where this is not the case, the company will seek to disinvest its operations and this has indeed been the case in Gisborne, where we have been forced to close our Care Home as it was no longer financially viable.” (from the Bupa document handed to staff telling them to choose to do the 4 on 4 off shift regime or risk having their jobs "disestablished)
“Mr Brown said declining occupancy rates due to an oversupply of rest home beds in the Gisborne district, as well as a need for a rehabilitation service in the region were reasons for this new direction.”
“The Thornton report quotes EBITDAR (earnings before interest, taxes, depreciation, amortisation and rent) per rest home resident of $5,068 from a care cost of $16,859 and in hospital level care a return of $9,647 against a care cost of $31,829. Returns of 30% - which even before tax, are extraordinary. And, when Thornton compared “not for profit” rest home operators against the “for profits”, EBITDAR were 68% higher in “for profit” operators.”
Bupa claim that current levels of direct care provided by registered nurses, enrolled nurses and caregivers are 356, 130 and 1120 hours per week respectively. They further claim that these levels are higher than those recommended in the “Indicators for Safe Aged Care for Consumers”. In the table (from the publication referred to) below it can be seen just what the recommended hours are:
In any case the levels calculated for all types of care staff still fall short of the numbers claimed as being the “existing hours per week” by the Bupa management.
Getting around to the profitability or otherwise of the establishment, I find that even using the current staffing hours claimed by Bupa and multiplying by the guesstimated rates for staff of $26/hour for RNs, $18/hour for ENs and $16/hour for Caregivers, the wage component for care costs (when apportioned appropriately over each care group), amount to $30,140, $21,202 and $16,204 for hospital, dementia and rest home residents respectively. If these are adjusted to the levels proposed by Bupa they reduce to $23,405, $16, 886 and $13,040.
Assuming that the reduced levels represent a degree of profitability that Bupa Head Office are happy with we can extrapolate the component of direct care that is not wages based on the extensive work carried out by Grant Thornton in his report, Aged Residential Care Service Review September 2010. I have estimated these at $10,870, $9,778 and $5115.
After adjusting for inflation for the 3 years since 2010 at a rate of 2.5% per annum (leaving the less significant categories of operating costs as modelled by Thornton), I can estimate the following figures:
Profits made by Bupa do not have to be paid out to shareholders, so they are ploughed back into assets - which make even more profits which are turned into yet more assets. The taxpayer helps fund this expanding juggernaut, twice - first as the taxpayer and then as the resident. Bupa claims to have a history and policy of helping to create more affordable and better health care, yet, if their performance in the aged-care sector in New Zealand is anything to go by, they are charging no less nor providing more care than any other organisation.
At the same time they are happy to take advantage of vulnerable staff and see them try to live at a subsistence level. While a person supporting a spouse on an hourly rate of $16 would earn $448 per week on a 4 on 4 off roster. They could get $384 plus an accommodation supplement up to $160 if applying for unemployment benefit.
If Bupa is truly interested in providing affordable and improved health outcomes they could hardly do better than use some of their profits in bringing the sector workers up to parity with their counterparts in the DHB while increasing direct care hours in order to provide a safer environment.
Is this current crisis the result of greedy staff or poor management on the part of Bupa. While the staff have all contracted in good faith to work the hours they currently have, Bupa have known all along that they were growing capacity while occupancy was unable to keep up.
“In New Zealand, revenues and profits increased year-on-year with resident numbers rising. However as capacity grew at a faster rate, occupancy figures slipped to 90.9% from 94.0% in care homes and to 87.5% from 91.1% in care villages. Government spending caps in New Zealand continue to present some financial challenges.” Bupa Half year statement for the six months ended 30 June 2013
“Scenario A projects that the downward trend in rest home bed days will continue until 2012 before it begins to rise with the growth of the aged population. Scenario B projects a much faster rate of reduction that also persists for longer, until 2015.” Aged Residential Care Service Review September 2010 - Grant Thornton
Bupa was originally set up as a provident society to make things more affordable for the people it served. Somewhere it has lost its direction, as can be seen by this current fiasco, which is putting profit margin before the welfare of its most vulnerable and undervalued asset - its staff.
NB: It would be possible to save 28 hours/week of RN time if the management staff opted to work 4 on 4 off.