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What’s wrong with Ralph Klein’s private hospital scheme?

By contracting out surgeries to private hospitals, Klein is diverting precious health care dollars to private profits. Costs for administration and billing are much higher in private hospitals. Overhead increases as you duplicate facilities and equipment.

The cost of marketing and attracting investors – and paying stock options to senior staff and dividends to investors – spiral upwards. Meanwhile, the public health care system is undermined and patient care is threatened.

Won’t contracting surgeries to private hospitals reduce waiting lists and alleviate suffering?

No. There is no evidence to suggest that waiting lists will be shorter if surgeries are done in private hospitals. In fact, patients must wait longer in Calgary for surgery done in private clinics than in Edmonton where the same surgery is performed in public hospitals.

In Calgary where all cataract surgery is done in private clinics, the average wait is 16 to 24 weeks. In Edmonton, with fewer eye surgeons and 80 per cent of surgeries performed at public hospitals, wait times averaged five to seven weeks. In Lethbridge, where all eye surgery is public, wait times averaged four to seven weeks.

In Manitoba, waiting lists for doctors performing cataract surgery in both the public and private systems were longer than for those who were operating only in the public system.

Health Canada has also studied the whole issue of waiting lists and concluded that private health facilities are not the answer to the waiting list problem.

What is the answer to the waiting list problem then?

Waiting lists would be alleviated if adequate funding were provided to re-build the acute care system, opening up available beds and increasing the number of staff. As well, additional funds for long-term care and proper home care would free up acute care beds and ensure patients were receiving the care that was best suited to their needs.

Adequate resources should also be directed to proper management of the waiting lists. Studies indicate that there is now no systematic approach to managing waiting lists. Creating a second waiting list for the private system is not a way to resolve this problem.

Won’t private health facilities simply complement and strengthen the existing public health system?

No. Private health facilities are profit driven and will be seeking to expand their markets. The more services the private facilities provide, the more the public system is eroded.

And the more the public system is eroded the more people will look to private health providers to provide the services. It is a downward spiral towards private health care, draining the public system of both cash and skilled staff.

Aren’t private health facilities more cost effective?

Absolutely not. There is evidence from both the United States and Britain that private health facilities have extremely high administrative costs – much higher than the administrative costs of a public system like Canada’s.

In 1995, overall administrative costs in the U.S. were $995 per person. In Canada, administrative costs were $248 per person. In 1997 Canadian per person total health care costs were only $2,095 while per person costs in the United States were twice as high at $4,090. And in spite of this, 43 million Americans have absolutely no health insurance.

Even within the United Sates, a study in the prestigious New England Journal of Medicine reports that increases in health spending were greater in areas served by for-profit hospitals than those areas served by not-for-profit hospitals.

If I can afford to purchase private heath services, why shouldn’t I?

When people who can afford it purchase health services privately, it establishes a two-tier health care system – one for those who can afford care and one for those who can’t. The well off can then access health services more quickly – in effect jumping the queue. Even being able to privately purchase diagnostic services such as an MRI enables those individuals to jump the queue for therapeutic services such as an operation.

As well, private hospitals are likely to focus on procedures with little risk and a high return. As a result, the public health care system loses the funding from these procedures. As the mix of patients and services shifts, costs to the public system rise.

Medicare provides equal access to services for all Canadians regardless of financial circumstance. The fundamental principles of Medicare are threatened when some can access services more quickly than others simply because they can afford to pay for it.

But wouldn’t I be less of a burden to the public system if I purchased my health services privately?

No. In fact, the opposite happens. Individuals who purchase health services increase the burden on the public system. The private health system siphons off resources that otherwise would have been available in the public health system. For example, some physicians, nurses and other health professionals will opt to provide services only in the private system thus depriving the public system of much needed skilled personnel. Other physicians will seek to see private patients in public hospitals, effectively using the public system to subsidize private profits. Either way, the burden on the public system is increased.

Won’t I get better service in a private health facility?

No. Health procedures performed within the public system are every bit as good or better than those performed in the private sector. Canada’s public system has a core of dedicated health professionals and support personnel who take great pride in providing those services. However, they all recognize that they could do a better job if the federal and provincial governments hadn’t cut funding so deeply.

In a system with publicly delivered health services, funding goes to the provision of health services. In a private system, profits are a primary goal of health corporations. Often the desire for profits gets in the way of providing services. A New England Journal of Medicine article reports that death rates are higher in for-profit dialysis clinics than in not-for-profit clinics. The authors suggest it may be because for-profit clinics are reluctant to place patients on the waiting list for a kidney transplant. Why? Because they will lose revenue from those patients after they have the transplants.

What’s wrong with paying for “extras’ in a private facility if you can afford them?

The “extras” simply boost the profits of private hospitals without adding to the quality of health care. For example, Calgary private eye clinics charge extra for “higher quality” lens that are offered free or at much lower cost in public hospitals in Edmonton and Lethbridge. Similarly, in hip replacements a titanium hip may be an “extra” in a private hospital but it is already being providing under public insurance in many places.

Saskatchewan has passed specific legislation to ensure that private facilities cannot charge extra fees for any service or device that is part of public health insurance.

For-profit hospitals have a vested interest in lobbying the provincial government to ensure that the “extras” don’t become part of the public plan. “Extras” aren’t always “extras” – but they will cost more in a private facility and that cost will come out of you own pocket rather being paid for out of the public health insurance plan.

Should I believe Ralph Klein when he says that he is not going to create a two-tier system?

No. It doesn’t matter whether the legislation intentionally creates a two-tier system or not. The end result will be the same. The legislation will provide a foundation for the private for profit providers to gain a toehold in an extremely lucrative business -p; the provision of hip and knee replacement surgeries requiring overnight stays. There will be pressure to de-list services covered under the provincial health insurance act when the private hospitals have the capacity to provide them.

What can Ottawa do to stop Ralph Klein?

The federal government can withhold funding from Alberta to protect the intent of the Canada Health Act, amending the Act if necessary to ensure that private hospitals are explicitly prohibited.

Don’t we need to modernize our Medicare system?

Absolutely. Medicare must be extended beyond the walls of hospitals and doctors’ offices to cover home and community care. And it’s important to contain rising drug costs and put in place a national pharmacare plan. It’s in these areas that Canadian families are facing increasing costs.

But these innovative programs are doomed to fail without a significant, ongoing investment of funds by Ottawa in new and existing health infrastructure.

What about the $2.5 billion put into health care in the last budget. Isn’t that enough?

Finance Minister Paul Martin put $ 2.5 billion over four years to be added on a one-time basis to the Canada Health and Social Transfer (CHST) to be split between health care and post-secondary education. $1 billion will be allocated in 2000-01 and $500 million in each of the next three years.

The $2.5 billion is really one shot funding that the provinces could take at any time over the next four years. And because the $2.5 billion is earmarked for both post-secondary education and health, we have no way of knowing how much will be spent on health care.

Long-term, stable funding is needed to restore the cuts and expand publicly funded and delivered health services to much needed home and community care for seniors, the disabled and those released from hospitals who still need acute care. Martin failed to deliver.

Reforms such as to primary care cannot be implemented without a long-term financial commitment from the federal government. Such a low level of funding does nothing to address drug care costs, the fastest rising cost in the health care system.

The federal government made deep cuts to transfer payments in 1995 when they brought in the Canada Health and Social Transfer. And the federal government’s commitment to health care and other social programs won’t reach 1995 levels again until about 2003. Once the costs of inflation, new medical technologies and population growth are taken into account, Ottawa will still be billions short of their pre-CHST commitment to Canada’s Medicare system.