There is nothing wrong with private companies making money. In fact there would not be any private companies if they did not make a reasonable return for their owners. Making money is not easy if you want to have an honest and sustainable business. It is always risky because you do not know what will happen tomorrow, the cost of financing can be high, bad workers and poor management can drive it in the ground, and customers tastes change in unpredictable ways. Competition is also a good and powerful influence of profitability – it keeps management on their toes for both shareholders and customers.
Not all businesses are good for customers and for society as a whole. Monopolies and small groups of big companies can keep prices higher by price cartels. We have seen how Caruna, Kesko, S-Group, Finnair, Op Group and Nordea can keep prices higher than they should be. Thank goodness we have LIDL, Tockmann, Norwegian, and smaller Finnish and foreign banks competing for our business with lower prices and comparable quality.
However, recent experiences seen with a friend and his mother at a private care home tells another story. The company in question is Esperi Oy, and for reasons of confidentiality the location and the person involved are not disclosed.
Esperi Oy is owned by a British private equity investment company called ICG Plc. that seeks profits by demanding high profits from their investments and leveraging up on their equity investments with debt. They have been very successful – here is a price history graph of their shares for the last 5 years. It represents an excellent investment for shareholders:
My friend’s mother lives in a small town a few hours north of Helsinki. She is 85 years old and suffers from dementia. Her husband cares for her in their terrace house and life is still reasonable with a jovial but rather forgetful wife! She forgets what she was doing yesterday and has little idea about today. But she recognises people and has an excellent recall of long-term events and memories.
Her husband still needs a day off sometimes to rest and to do monthly chores. He is not getting any younger either. He asked us to visit the local Esperi Oy care home which was promising activity-filled days especially designed for dementia patients. The cost was around €50 to €100 a day depending on the activity.
We thought this sounded like a good deal and we then, on a Friday afternoon at around 13:00 hours, travelled to the centre to meet the staff there.
What we saw and heard was not much to our liking. We arrived at the centre and were welcomed by the boss. She did not even welcome my friend’s mother, but talked to her husband just as if the dementia patient was invisible! The same situation lasted for the whole two hours we were there.
The centre had dozens of rooms for the paying patients on two floors, but none of the inmates were in the garden or in the activity room. It was as if the whole place was in lockdown. We did see one lady tottering along with two walking sticks but she walked away as if she was intruding.
The boss explained at length about all the activities singing, piano playing, cooking, sewing, etc… all useful and important activities for such patients, but there were no patients there and the boss appeared to be more concerned about selling their services rather than explaining carefully about benefits of these activities for these patients. The activity centre it appeared to have been empty for days, even though we were there during normal working hours on a weekday…
We walked around the grounds and received the impression was that this service was just something that could be sold for extra cash for Espiri to pocket… We both had the same doubts about the rest of the place. The buildings and garden were not cared for, weeds and bushes thrived! Paint on doors and windows were peeling, windows were not cleaned, paths were untidy, seating outside was improvised with delivery pallets! You had the feeling that staff was under-resourced and maintenance was cut to the bone. There was no cheerfulness or pleasant feeling about this – we were reminded of poorly maintained rather empty school buildings, built without colour and a soul.
Private care homes can be lovely warm places if you are able to pay the price, but it appeared that this place that was for ordinary elderly patients are being offered the lowest possible level of service at a price that gives the service provider the best possible profit.
Since we will all be elderly and in need of care, tax based public services can offer the best possible option for the great majority. Efficient and caring public services can and should be provided to all of us when we reach such a ripe age, but there is no room for private service providers that are seeking to maximise profits. Let’s be clear, you can fool yourself about how well the private sector does a great job, but you will discover at your peril that such a service fails miserably when you are too frail to complain. Profit maximisation has no place for the great majority of the us. The wealthy can afford super care but they are in the small minority of 1% of the population, the rest of us, 99%, can get more than adequate to excellent services from our smoothly functioning public sector.
Watch out for those politicians flogging private services for the masses…