A Business Point of View

The MacLeod Group Story - The Business of Long-Term Care

A recent Insights Podcast with Ramsay Duff, the CEO of the MacLeod Group served to underscore the challenges and opportunities associated with long-term care across Atlantic Canada. The MacLeod Group was founded in 1981 by husband-and-wife team Brian and Irene MacLeod, now both deceased. The MacLeod Group has quietly become one of the largest nursing home operators in Atlantic Canada, with 14 long-term care facilities and retirement communities in its portfolio across the three Maritime Provinces and more in the works. The company currently cares for 850 residents.

Growing Demand for Long-Term Beds

The aging of the baby boom generation has created growing demand for long-term care across Canada. The lack of planning and preparation by governments over a long period of time of the known increase in demand caused by aging demographics had led to the current situation where there are shortages across the region and stress on hospital beds for those needing long-term care. According to Duff, the increasing demand will last until at least 2042 , when the last of the baby boom generation begin to age out and demand is expected to peak. In the three Maritime Provinces there is currently a gap in supply of 6,000 beds and by 2032 that gap is expected to increase to 12,000 beds. Most provinces have a strategy in place to narrow the gap, but fixing the problem will be very expensive.

The Role of the Private Sector

There are a few significant private sector long-care companies in the region. Shannex is the biggest with an estimated 20 percent share of the market. Another significant company in this market is GEM. Most of the private operators like MacLeod offer a continuum of care from unassisted retirement living, to nursing care and finally end of life palliative care. There are both licensed and unlicensed facilities across the region. Whether someone ends up in a public facility like Northwood or a private facility, like Shannex or MacLeod, there is a single-entry system, and everyone is income tested to determine the level of government support each individual is entitled to receive.

The Cost of Long-Term Care Facilities

In our recent conversation with Duff, he indicated that the cost per bed of building a long-term facility is currently $650,000 as the result of rapidly increasing material and labour costs. This does not include the costs to operate the facility. As an example, he cited the company’s new facility in Mahone Bay which has 96 beds and cost $60 million dollars to construct. Using that metric, to build the 6,000 beds currently needed will cost nearly $4 billion based on today’s costs. The question is, how will that investment be funded?

The MacLeod Strategy

The MacLeod Group has taken a somewhat different approach to the long-term care market, by focussing on smaller markets where the company intentionally plays a more prominent role in the community’s where it locates. As Duff describes, MacLeod is often the largest employer in the community and becomes a central health hub for that community. Operating in smaller more rural communities has a number of advantages, especially in terms of employee attraction and retention. Currently, about 30 percent of the company’s workforce are newcomers, which help smaller communities maintain or even increase their population base. The company currently employs 1,400 mainly professional staff including LPNs, Nurses and dietarians.

The Future for MacLeod

The MacLeod Group has ambitious growth plans and hopes to double in size by 2032. The company has two new facilities scheduled to open in 2028 - a 112-bed facility in Shelburne and a 64-bed facility in Glace Bay. By 2032 , the company expects to have to more new facilities, one in Port Hawkesbury and one in Annapolis Royal. Other projects are in various stages of approval for Kensington, Moncton and Fredericton.

The company expects to expand its locational strategy to include more urban communities and will continue to operate with a small head office staff at its head office in Antigonish, supported by its decentralized management processes.

The future for the company is indeed bright.