In Norway, municipalities take back control of care homes

Overlooking the municipality of Austevoll, Norway. Photo: Anne Jo Lexander

The first company promised ‘sherry and dance’ to potential residents. Boganes advertised itself as a different type of care home — an extraordinary one. Fifteen years and three corporate operators later, a quite ordinary Boganes care home is back under the wings of the City of Stavanger.

Is this home run by the municipality or by a private enterprise? 92-year old Gøsta Arthur Berntson, a resident of the facility, is not sure. But his guess is the municipality. “I can really just answer to what is put in front of me: totally great sandwiches,” he jokes.   

The life-long outdoors enthusiast is so comfortable at the Boganes care home that he says he needs to watch his weight. “I must get out and exercise. I don’t need anyone to hold my hand, but it feels safe to have someone walking next to me,”  he says. 

Outside the Boganes care home in Stavanger. Photo: Ingeborg Eliassen

Berntson moved into the care home after the city took over the operation last year. That marked the end of Stavanger’s 14-years long experiment in for-profit elder care. Like most Norwegian care homes, Boganes is owned by the municipality. But its management has been contracted to three Nordic care companies, one after the other: Norlandia, Aleris and Attendo.

Red-green election wave

2015 was the peak year of publicly funded for-profit elder care in Norway. The above-mentioned three companies — plus a fourth, Unicare — operated 25 of the approximately 900 care homes in the country. 14 of them were in Oslo, the capital.

That year also saw local elections. Red-green coalitions (between the Social Democrats, Socialists and Greens) took over most of the municipalities that had, till then, allowed for-profit companies to run publicly-owned care homes. The newly-elected officials promised to reverse this practice. Today, only five for-profit homes remain, and at least two of them will be back in municipal hands — or operated by non-profit groups — by 2023.

Norway spends 3.4 per cent of its oil-and-gas-greased budget on elder care, twice as much as the EU average. The population over 80 is surging. The business opportunities seem vast.

Companies pulled out

But two multinational care groups have thrown in the towel on care home operations in Norway  — at least for now. One is the Swedish-based Attendo, which runs 700 facilities with over 25,000 employees in Sweden, Finland and Denmark, and is Europe’s eighth biggest in terms of the number of beds.

Attendo operated in Norway between 1997 and 2020, and its care homes in Oslo had top-class satisfaction rates among residents, communications director Andreas Koch writes in an e-mail to Investigate Europe.

At Boganes, however, the company demanded to be released from the contract last year — a wish that suited the red-green political majority. Koch describes the circumstances at Boganes as “challenging”. “The economic terms from the municipality were very weak. The operation ran with a deficit every year, while there were constant high demands on staffing.”

But then, Attendo did not only pull out of Stavanger, it left Norway altogether. The company considered the “conditions for private companies to develop long-term sustainable operations in elderly care in Norway [to be] lacking,” according to its communications director.

One of Attendo’s two remaining competitors, Norlandia Health & Care Group, noted in its annual report last year that “the political climate is still challenging for private operators. We have continued to work closely with politicians and other decision-makers to communicate our role in the market.”

Leftist politicians in Norway are not likely to listen very carefully. Their attitude towards for-profit care is summed up by Magnus Marsdal, director of the left-leaning think-tank Manifest. “It is strange that we have allowed this cancer to grow in the heart of the welfare state,” he says.

Conservative against his party

It is mostly (but not only) the red-green parties that make the political climate challenging for the corporations in Norway’s elder care sector. The people of Austevoll, a wealthy fishing community, have a conservative mayor. It was on his watch that last year, the local care home lowered a turquoise banner with its corporate logo. In return, Austevoll’s own flag — blue with four silver herrings — was hoisted.

The care home had been run for seven years by Aleris. During the contract period, that company technically ceased to exist, as it was bought over by the bigger Sweden-based Ambea corporation. They renamed it Stendi.

Mayor Morten Storebø’s eventual move to transfer back the operation of the home to the municipality turned back the ‘marketisation’ of all elderly care that his predecessor from the liberalist Progress party had started.

Mayor Morten Storebø. Photo: Anne Jo Lexander

“Some services are too important to leave to commercial entities,” mayor Storebø tells Investigate Europe. He thinks the municipal coffers can handle the substantial price tag that comes with taking back the employees of this facility and including them in the municipal pension schemes.

Storebø’s conservative party. though, supports privatised care. But going against that policy does not keep this mayor awake at night. “We must not base decisions on ideology, but rather on measurable knowledge,” he explains. “In the end, this is about services for the residents and working conditions for the staff.”

Pressure on staff

The staff wanted to return to the municipal payroll — and to the working conditions they used to have. The reason is clear. Four years into the Aleris operation, consultants from KPMG stated: wages and pension conditions had deteriorated since the company had taken over.

However, the report said the employees had understood and even agreed to these worsened conditions.

“We resigned. We had no choice,” explains Ann Desirée Brekke, careworker and union representative at the care home. “The shifts became shorter, and the equivalent of ten full-time jobs disappeared. Those who remained had to take over those tasks,” she says, adding that there was a heavy turnover of personnel in part-time positions.

Better staffing and efficient shift plans are an eternal battle in the municipality, too, she says. But pensions, and a whole range of details that define daily working conditions, are better there.

Anne Desirée Brekke. Photo: Anne Jo Lexander

Investigate Europe presented Brekke’s descriptions to Stendi. The company responded in an e-mail: “This largely refers to issues back in time. On an overarching level, the current management of Stendi, formerly Aleris, does not identify with the picture that is presented. We experienced a good and constructive collaboration with the municipality of Austevoll.”

Ann Desirée Brekke, does, however, have one nice thing to say about the company. “Not everyone wants to go to prayer,” she says. “Aleris was good at offering activities that are more contemporary.”

Short-sighted savings

Care homes have one dominant cost: the staff. Internationally, social scientists have documented that wages and pensions are squeezed and shifts and workloads get heavier when corporations seek to maximise profit on their operations. Science shows that commercial elder care overall has a lower staff ratio, lower level of training among staff, and more temporary employment, according to Marta Szebehely, professor emeritus at Stockholm University.

Oslo’s vice mayor Robert Steen, from the Labour party, reviewed the economic effects of the marketisation of one-third of the capital’s care homes back in 2015. He found “no trace that the care homes they ran, were operated more efficiently”. But, he found “creative ways to cut costs”, especially by lowering pensions for staff.

Few people start to think about their pension before they turn 60, he notes.“Therefore it is easy to tweak pensions without the staff noticing. They are not affected until ten, twenty or thirty years later,” Steen tells Investigate Europe. “By then, the company may be gone, but the people may become a burden on society if they cannot cope financially. So what the municipality saves in the short term, comes back in the other end when people pay fewer taxes or may need help to make ends meet,” justifies the vice mayor.

Quality that cannot be quantified

It seems logical that overworked and frustrated employees would impact the lives of care home residents negatively, too. Anecdotal evidence of this is rife in Europe: wounds that are not treated properly, dehydration, malnutrition, wrong medication.

There have been care-related scandals in for-profit homes in Norway, too. A recent report from a large number of care homes — most of them public — shows that such neglect is a much too common factor across the board. “In order to prevent neglect, there must be a sufficient number of staff on duty, a high share of qualified personnel — and plans for sick leave that avoids understaffing,” says the report. 

Contracts between Norwegian municipalities and care companies have detailed quality requirements. Quality surveys among Norwegian care homes sometimes have for-profit homes scoring higher than municipal homes.

Internationally, however, researchers have not been able to systematically document how for-profit eldercare affects the quality of care.

That is because it is difficult to measure quality, according to Mia Vabø, research professor at Oslo Met.

“The phenomenon one tries to measure, cannot be quantified. What is quality for me, may not be quality for you,” she says. “Quality for me today may not be quality for me tomorrow. What you can measure, is that you have plans.”

Inspections are rare across the board

Elder care is complicated, as the mayor of Austevoll puts it. The fact that inspections are rare, adds to the lack of documentation of care quality. Boganes care home had one inspection during the 14 years that it was operated by corporations. Norway has around 900 care homes. The Norwegian board of health supervision inspected between 42 and 56 care homes and other institutions annually between 2015 and 2019. Almost all the inspections were pre-announced.

The authorities have no data to conclude whether for-profit care homes offer better, worse or the same quality of care as public ones, according to Anne Myhr, deputy director-general at the board of health supervision. “We don’t have supervision experience that enables us to answer questions about differences between commercial and public care homes,” she writes in an e-mail to Investigate Europe.

Nordic care corporations are wary about the political winds from the left. But they have not given up on the Norwegian care home market, asserts Riikka Aubert, country manager for care at Norlandia Health & Care Group. “We are proud of what we have contributed to in innovation and systematic quality development,” she writes in an email. “We know the needs will increase in the coming decades, and we want to continue to contribute with our resources.”

Her predictions may come true. For-profit elder care is a cause supported by the right, and there are elections every four years. If the commercial care groups are in it for the long haul, they will be ready at the next political turn.

Versions of this article were published by our media partners in Norway and France.