An exodus of care workers, many on zero-hours contracts, left a private provider unable to look after almost 200 people over a bank holiday weekend.
About 70% of staff at Allied Healthcare on Teesside had "disappeared", taking unplanned leave or resigning without notice, it confirmed.
The company's regional director, Tracey Walshaw, said it was "a one-off event".
A "catalogue of events... escalated into a bank holiday weekend that we've totally lost control of", she said.
The company was unable to cover 190 calls between 24 and 26 August. Redcar and Cleveland Council staff provided the extra care.
'See this coming'
Redcar and Cleveland councillor Ian Jeffrey said it should have been "self-evident" to the company that employing staff on zero-hour contracts meant they could choose when to work.
At a meeting of the council's adult and communities scrutiny and improvement committee he asked Ms Walshaw: "Why on earth didn't you see this coming?"
She said "people do not always want guaranteed hours", although they were offered.
The staffing crisis came to light after an Allied manager informed the council, against the instructions of the company's executive team, the Local Democracy Reporting Service said.
The company had also refused the manager's request to call in agency support to ensure calls were met, councillors were told.
Council staff provided the extra care.
Allied Healthcare's contract with the council has been cut from 950 hours to 140, the meeting heard.
The remaining patients had chosen to stay with Allied.