Sweden: Scandals in privatised old people’s homes

Protest storm against venture capitalists and politicians

The last two weeks have seen a full storm of protest against scandals in nursing homes for the elderly in Sweden. Politicians and capitalists are shaken by the protests, and are attempting to save their model of privatisation.

The whole mess started at an old people’s home run by the private company Carema, when management tried to cover up the death of a resident. New, similar stories then came from everywhere. Elderly people have been found forgotten and left in toilets for as much as 12 hours, sleeping on floors, not having their diaper changed for hours when it is “not full”, not having a shower in two weeks, and the examples go on! In several cases, the consequences were dire. In one Carema nursing home, a pensioner, Ruth Jonsson, died of blood poisoning from an infected wound. Another resident has recently died of starvation.

The media also understood the situation and tapped into people’s frustration about the ongoing decline in the standards of the health system and care for the aged. "Do you dare to get old?" was the name of the newspaper Aftonbladet’s new blog. "We gave them our father" was the title of a TV documentary about neglect and venture capitalists in the elderly care sector. It is now widely known that there are 150 serious complaints against Carema, who, along with Attendo Care, account for half of private nursing homes. One third of the complaints are made by staff.

Privatisation kills

For many people, it has quickly become clear that this is all the result of the privatisation of Swedish public services. Private companies compete in offering to run former public services such as elderly care, schools and health clinics. The lowest bid wins and the private companies are paid by the local council to run the service. "Health care companies are digging gold in Sweden," the daily newspaper Dagens Industri reported earlier this autumn. For the elderly, lowering the cost means having less staff and a worse service.

This system was introduced by right-wing governments in the early 1990s and again since 2006, but has not been challenged or changed by the Social Democrats. In fact, there is little difference between Right-wing and Social Democrat-run councils. The Social Democratic Party congress in 2009 actually made a point of saying that it was not opposed to profits in care or education.

Big profits

These businesses are growing rapidly and are extremely profitable. In Stockholm today, 73% of elderly care services are run by private companies compared with 38% percent in 2006. The biggest private company in education, Academia, has grown by 150% in two years. In 2009, 62 billion SEK (€6.45 billion) of Sweden’s tax income went to private companies. Yet, they only stand for between 10 and 13 percent of education, health care and other care. So, they are still aiming for a much bigger share.

The profit share is extreme. Return on investment is 8% on average in the economy as a whole, but 15% in health care, education and elderly care. For Carema, it was 33.4% last year, reported the paper Dagens Nyheter on 12 November.

Most of these companies are owned by venture capitalist firms, based in the Cayman Islands, Jersey, or other tax havens. The notorious Carema, for example, is owned by two venture capital firms, KKR from the US and the Swedish (although Jersey- “based”) Triton. Their billions in profits come from detailed tax evasion schemes including the manipulation of interest rates.

However, this is about more than Carema. A complete change of course in the care of the elderly and in the entire public sector is needed. Elderly care has been under attack since the 1980s.

The Council Workers’ Union writes in a new report: "The proportion of those aged 80 and older who receive publicly funded care has declined from 62% in 1980 to 35% in 2009. During the 2000s, state funding for the elderly continued to decline, both in the actual amount and as a share of GDP. The number of employees in the service has also been reduced." Fewer than one in ten pensioners have home care. The report also says that 100,000 workers, mostly women, have been forced to work part time or have completely stopped working in order to care for a relative.

Politicians on all sides pretend to wonder “What has happened?”. But a state report last year said, "The number of beds, institutions and retirement homes of all kinds fell sharply during the 1990s and continued to decrease during the first half of the 2000s. Nearly half of all hospital beds were eliminated. During the same period, almost all institutional care in nursing and aged care and people with disabilities was ended".

Political decisions

This is the result of conscious political decisions. Responsibility has been ‘de-centralised’ or outsourced so that politicians no longer can be accused of having responsibility.

The Employers’ Federation campaigned over a long period for privatisation of the public sector. They had three objectives. The first was to open new markets for private companies. The second was to weaken the unions and the employees’ position, and the third was to simply reduce the politics-driven public sector.

The scandals and reports about venture capitalists have shaken the politicians. An initiative to fight back against privatisation and its consequences made by the unions, pensioners’ organisations and relatives of those in care could gather thousands of families, elderly people and others on demonstrations against cuts and privatisations.

There is massive opposition against profiteering in health care. Two years ago, a poll showed 50% wanted a ban on the distribution of profits from within the school, health and social care sectors. The recent revelations and scandals have opened the floodgates wide.

Minimum response

With no such initiative, however, apologetic politicians and even venture capitalists have dominated the media, saying the scandals for which they are responsible are “unacceptable”. The government has promised new laws against tax evasion and Stockholm council has replaced Carema with council care in the care home where the scandal started.

Social Democratic party leader Håkan Juholt says that "having private equity firms with profit maximisation as the main driver is wrong". But his concrete proposal was a "broad agreement” with the right-wing government.

Håkan Juholt

Jonas Sjöstedt, candidate for the leadership of the Left Party, crititicised Juholt, saying that the Social Democrats should, "as the Left, demand a ban on reaping profits from public services".

Neither the Social Democrats nor the Left Party dares to challenge the private ownership per se. How can Juholt stop venture capital in cooperation with the Conservative government? Do his demands include schools and health care, in addition to care of the aged? What does Jonas Sjöstedt’s demand for prohibition of "reaping the profits" mean? Will there still be profits? Who should control them?

What is certain is that any new rules will be met by new tax and profit manoeuvres from companies. And right-wing politicians will re-introduce new privatisation under the guise of "increasing choice".

Movement from below

What is needed is not ‘politician-speak’, but a movement from below. Elderly care must be planned, based on social need. In the 2010 election campaign in Haninge (south Stockholm), Rättvisepartiet Socialisterna (RS – CWI Sweden) noted that the number of elderly in the council area had increased by 2,998 people since 2002, while the number of places in special housing only increased by 29 – 1 %. RS demanded 275 new employees in aged care in Haninge, more accommodation and housing, and improved working conditions.

In Luleå, where RS also has council seats, care of the elderly has often been the focus for politicians’ cuts – where the Social Democrats control the council – and a struggle by the workers. The council lowered wages by eliminating weekend bonus rates for workers in elderly care, and have recently failed an election promise from 2010 on work schemes.

The capitalists’ stranglehold on elderly care is the cause of the current crisis. The elderly and their relatives have no influence. The same applies to the employees who are struggling to do a good job but are squeezed by ever-tighter deadlines, job insecurity and a voluntary part-timers’ scheme with low pay and status.

The protests against the scandals have shaken the government. Their only hope is the passivity and weakness of the so-called opposition and the trade unions. Why isn’t the Council Workers’ Union in the forefront in the fight against privatisation? The weakness of the so-called ‘opposition’ of the Social Democrats is indicated in opinion polls which show the party on historically low levels. Its party leader, Juholt, was recently found claiming double expenses for housing from the parliamentary budget. But the crisis of Social Democracy is fundamentally political – they have no alternative to the right-wing coalition.

Impossible to ‘tame’

Rättvisepartiet Socialisterna supports any steps to reduce private corporate power and profits. But basically, it is impossible to try to "control" private companies’ profits or to tame them with regulations. You can’t really control what you don’t own. To fight against neglect is to battle against private capital in what is perhaps their most profitable industry.

There must be a thorough review of needs, conducted by those in care, their relatives and the workers in the sector. The conditions for the workers must be improved substantially, wages increased sharply, and many more must be employed.

This requires a further development of health and social protests, with a clear demand that all private companies should be removed from the elderly care sector, education and health care. Any requirement for more resources in health care also means a challenge against capital, and about the whole way in which society’s resources are deployed.

Rättvisepartiet Socialisterna stands for:

  • Re-municipalisation of all private elderly care.
  • 200,000 new welfare jobs. Shorter hours, higher wages.
  • Care for the elderly according to social need and under the control of those in care, their relatives and workers in the sector.
  • Trade unions and pensioners’ organisations should mobilise demonstrations in support of elderly care.
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