What's Holding Up New Long Term Care Beds?
Stop blaming staffing shortages
Hospital emergency department and surgery wait times across Canada are a disaster. One significant reason for that is a backlog of “corridor patients” waiting to be admitted to the hospital itself.1
Admissions are backlogged because there aren’t enough beds available.
Beds are often in short supply because they’re being occupied by Alternate Level of Care (ALC) patients - who no longer need acute hospital care but remain in hospital beds because there’s nowhere appropriate to discharge them.
ALC patients are often stuck where they are because there aren’t enough Long Term Care (LTC) beds available.
And LTC beds are in short supply because…well, just why are they in short supply? A lot of the story revolves around negative incentives that can convince investors to avoid the market altogether.
Rising construction and borrowing costs are certainly a factor. It’s estimated that a modern LTC facility often costs $300k–$400k per bed to build in Canada.
Delays due to the usual licensing, permitting, and plain old government inertia issues play a role. It can take close to a decade from an official announcement of a new public LTC facility before a facility opens.
Regulatory inflexibility can limit the ability of providers to adjust their pricing to account for economic changes.
Finding trained staff to handle the huge growth in demand is, according to some analyses, the most significant problem.
Let’s take a closer look at staffing. According to Statistics Canada, there were 282,818 individuals employed by nursing and residential care facilities in 2003. By 2024, that number had risen 83 percent to 516,898.
Of course, because the patient population could have grown even faster over that time, that number won’t help us. Unfortunately there’s no useful data available representing the number of patients in residential care over time. So we’ll have to look for proxies.
Canada’s population grew by 30 percent through those 21 years. Using the annual population numbers we can calculate that the number of nursing and residential care facilities employees per 1,000 Canadians grew from 8.87 to 12.53. That’s a relative growth rate of 40 percent, which is significantly faster than the overall population change. If that’s the whole story, than there should be no staffing shortages in the industry.
Of course, since we all know that Canada’s elderly make up a rising proportion of the population, we should probably narrow down our focus. In 2003, Canadians aged 85-89 made up 0.94 percent of the total population. That number had grown to 1.35 percent by 2024. The change was just over 44 percent.
As you can see from the chart below, the elderly population (the people most likely to require residential care) is growing faster than the cohort of caregivers they need - but not much faster. The relatively narrow difference isn’t nearly enough to fully explain the depth of the shortage in beds.
Assuming this official data is accurate, claims that workers abandoned the industry in large numbers during and after COVID are simply wrong.
It’s unlikely that the patient-caregiver ratio has increased over the past decades. If anything, the spread of labour-saving tools like patient lift devices and electronic monitoring has probably reduced the proportional staffing needs. And while competition from higher-paying hospital jobs has always been a challenge, hourly wages for the sector have actually more than kept pace with inflation.
To some degree there isn’t any simple solution to the LTC supply problem - and, by extension, to the consequent problems with healthcare access in general. But there are definitely opportunities for partial wins, especially when it comes to government’s traditional role as a provider of artificial constraints.
Or, to put it differently, it would be wonderful if Canadian governments at all levels rediscovered the fine art of getting out of the way of people who want to build stuff.
Other contributing causes include the lack of available emergency clinical staff, the fact that conditions that could be treated in the community by primary providers are missed because millions of Canadians can’t find primary physicians, and recent uncontrolled growth of the general population.