This article originally appeared in Caixin.
Businesswoman Chen Lude says she feels like she dodged a bullet when she decided not to send her mother to a nursing home that was later hit by a deadly fire. In early May, Chen and her siblings decided to send their 80-year-old mother to the privately owned Kangleyuan Elderly Rehabilitation Center, one of the best-known homes for the elderly in Lushan County, in the central province of Henan.
However, Chen, 50, changed her mind after she visited Kangleyuan and found the condition of the section designated for the bed-ridden unsatisfactory. Chen said the section, off in a corner of the building, had only one emergency exit: “I thought at that time if there was a fire, there would be no way to escape.”
Chen’s worries were not misplaced. Late on the night of May 25, a blaze broke out in the section she visited and soon spread. Thirty-eight people were killed, and six others were injured. Authorities blamed the disaster on poor construction and a lack of safety measures. The State Administration of Work Safety said an investigation found flammable materials were used as insulation in the walls of the 8,000-square-meter nursing home.
Most of the building materials had low resistance to fire, and safety checks and electricity management were inadequate, the safety watchdog said. Investigators found that the blaze was triggered by an outdated electrical system.
The Kangleyuan nursing home took care of more than 100 seniors from the county and nearby villages, some of them disabled. It was a top choice for area seniors because it was cheaper than government-backed nursing homes.
In the face of growing demands from a graying population, China’s elderly care services are having difficulty catching up. This is especially true in poor rural areas, where a growing number of seniors live alone because their children have gone to cities to live.
Chen said she is preparing to open a new nursing home for her mother and other elderly people who need care. But the tragedy at the Kangleyuan facility has created a host of uncertainties for the operations of private nursing homes.
According to its company profile, Kangleyuan was licensed by the local civil affairs authority in November 2010. The owner of the facility, a 50-year-old woman named Fan Huazhi, was named one of Lushan County’s 10 role models in 2013.
The main part of the Kangleyuan facility is several two-story brick buildings, and more buildings were added in following years as the nursing home grew. The company profile said it has four units catering to elderly people in various degrees of health.
A villager said that as Kangleyuan expanded, many of the buildings were made of pieces of sheet metal with an insulation material stuffed between them. “Officials from both the village committee and county government had toured the facility and did not raise any questions,” she said.
An official from the county’s civil affairs department said nursing homes are barred from using flammable materials in construction. Chen said sheet metal is much cheaper than ordinary building materials, and fire-resistant sheet metal has only been available in the last two years, but not in small counties like Lushan.
The villager said Kangleyuan has been popular with seniors because it is cheap. Public nursing homes in the area cost about 2,000 yuan ($322) per month, but residents of Kangleyuan pay as little as 500 yuan ($80) per month.
Chen said Kangleyuan had a hard time breaking even. She estimated the nursing home could profit as much as 200 yuan ($32) per month from taking care of one senior. “It can earn about 20,000 yuan per month at most, but electricity and labor costs are high,” she said.
About 10 kilometers from the Lushan County center is Jiangcai village, which in the past had a population of 170 residents. But only a dozen elderly people remain now because the young have moved to cities. A 70-year-old woman said all three of her children work far away, and she has to care for her 94-year-old mother on her own.
The Communist Party head of another nearby village, Malou, said most of the young members of the previous population of 400 have left to seek jobs in the coastal provinces of Guangdong and Zhejiang. “Only some children and elderly are left,” the official said.
The sixth national census, conducted in 2010, found that 12.7 percent of the population of Henan was at least 60 years old. And a growing number of elderly people in rural areas live alone.
A total of 28 public nursing homes operate in Lushan County’s 22 towns, and combined they have a maximum capacity of 1,400 people. Access to these facilities is mainly available to people with no relatives or those living in extreme poverty.
A Malou villager said the condition of public nursing homes in the area is poor. “Every nursing home has tons of garbage nearby,” and bed-ridden seniors live alone in dirty rooms, the villager said.
Limited access and the high prices of public nursing homes created room for private players in Lushan. Chen has spent 1 million yuan ($161,000) to lease a plot of land for her nursing home, and building has started. But now the fire has brought uncertainty to her business. “I think the Lushan government will not approve any new nursing home for at least two years,” she said.
The party head of Malou village also predicted that after the fire, private nursing homes will face more difficulties in their operations. At the same time, experts are calling for more private involvement in elderly care. Data from the Ministry of Civil Affairs show China has an average of 2.1 beds in nursing homes for every 1,000 seniors. This is much less than in developed countries, where 5 to 10 beds are available for every 100 seniors.
Liu Mingxing, a professor of finance at Peking University, said that government funding is far from enough to support all the necessary elderly care facilities and that the support of private players is badly needed. But the prospects for privately owned elderly care services are up in the air. In 2013, the ministry said access to land is a major obstacle to new elderly care facilities.
Zhang Chewei, director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences, a government think tank, said the development of the country’s elderly care services is being hindered by seniors’ lack of funds and thin profit margins.
The government has worked to expand the coverage of the pension system in rural areas since 2009, but the results have been limited. Official data show that the average net income of rural residents was 9,892 yuan ($1,594) in 2014, and the average pension payment was only 972 yuan ($157).
Hu Xiaoyi, a deputy minister of human resources and social security, said most farmers still rely on income from rural business and land sales to pay their elderly care and medical costs. Liu, the professor, said the government should seek to partner with private players to operate rural nursing homes to meet the demands of the poor.
