Going once, going twice... Health care giants bid for home care

 Cashing in on need

 Ontario: Primed for costly privatization

 The cost of competition

 Staffing problems

 Out of pocket expenses on rise

 Funding and access cutbacks

 Home care is about women

 The need for federal action

 For-profit home care provision: expanding the market

 Olsten’s shoddy track record

 What is your province doing?

 Corporate classrooms costly...

"The [Olsten] nurses were basically doing what they were told to do as best they could — with the exception of one nurse who wouldn’t listen when it came to changing bandages. He just wouldn’t listen. He’d taken the packing on my leg ulcer and ripped it off dry, instead of soaking it and taking it off gently. The original ulcer was just about healed at the time. What he did made a tear that caused the ulcer to spread, creating a second ulcer of the same size. My original ulcer has not healed, and the new one still needs treatment. Everyone’s talking about cutting costs. Well why do they then have people who create more costs through rushing and carelessness?

"If Olsten was investigated and asked for a resumé of their previous work — like anyone who applies for a new job has to — they would not have been hired in Ontario. So how did they get let in here? Olsten made a huge profit last year. Well where did that come from? From taxpayers like me."

B.P. Lorenzi, 65, homecare user, Sault Ste. Marie, ON

Olsten’s shoddy track record

Olsten is a US-based home care contractor with headquarters in Long Island, New York. Until recently, it dealt in temporary office staff, information technology and home care. But in August of 1999, Olsten sold its interests in office staffing and information technology. Now focused on supplying home care management, nurses and home support workers, Olsten is gearing up to take over home care in Canada. Olsten’s track record makes this a very dangerous proposition.

Olsten thrives on temporary workers. Currently, Olsten employs approximately 5,200 full-time administrative staff, 800 full-time home caregivers and 18,000 temporary home caregivers. Olsten’s home care employees receive lower wages and benefits than public and non-profit home care employees. An estimated 95 per cent of Olsten employees receive no benefits.

Olsten may not pay its home care workers and nurses much, but it does pay its executives well. In 1998, Edward A. Blechschmidt, CEO and director of Olsten, took home more than US$300,000 in salary and bonuses, and received stock options valued at US$746,807. His predecessor, Frank Liguori, received more than US$2.3 million in salary and long term incentive payouts as well as US$923,680 in stock options.

On July 19, 1999, Olsten admitted it was forced to pay a US$61 million settlement as a result of Medicare fraud charges made by the US Justice Department and the Department of Health and Human Resources. The US government and authorities in New York, Georgia and Florida had issued civil, administrative and criminal charges against Olsten and several of its subsidiaries.

Olsten was also investigated by the New Mexico Health Care Anti-Fraud Task Force for "providing inducements and gifts to hemophilia patients, relatives and their physicians to accept delivery of more Blood Factor than required".

As part of their fraud settlement, some Olsten operations, such as Kimberly Home Health Care are banned from ever taking public money from US Medicare or Medicaid. Also, Kimberly must implement a "Corporation Integrity Agreement" that requires them to train staff properly and prevent fraud.

Olsten in Canada

In Manitoba, proposals to contract out home care work to Olsten met with mass opposition. Home care workers went on strike in 1996 to oppose the 40 – 60 per cent lower wage rate private home care companies would pay. Workers and patients knew care would suffer because private companies could not attract and retain trained staff at such low rates. Patients, families and workers rallied together to force the government to back down. Olsten was awarded a contract for only 10 per cent of the home care work in Winnipeg, and less than a year later the government admitted the public sector could do the work better and cheaper. Olsten subsequently left the province and set its sights on Ontario, where it holds several home care contracts.

Olsten is not traded publicly in Canada and has no obligation under law to disclose financial information such as profit levels. According to the US Securities and Exchange Commission, Olsten had 1998 revenues of $4.6 billion and system-wide sales of $5.1 billion.