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The main question we were given to address is “What are the concerns of Canadians when we talk about two-tier health care?”

I think most Canadians have a very basic concern and that concern is illustrated by the following two accounts:

By 1920 or 1925 Grande Prairie had the luxury of two doctors and some nurses. It was trying to replace its log hospital with a better building. The biggest difficulty with the hospital was that payment for the bill had to be made before the patient was admitted. If you had no money available you had better stay home. One mother died on the hospital steps while her husband was at the desk pleading to have her admitted- Arthur W. Fletcher, Hythe, Alberta1

… Ottawa resident Allison Lavigne rushed with Richard McGrath to the Civic campus emergency room, fearing she was miscarrying three months into her pregnancy. An emergency room doctor examined her and ordered an ultrasound, but another employee would not do the procedure until the couple had made arrangements for payment. Mr. McGrath had to run to the finance department, charge the $100 procedure to his credit card and return with a receipt before the ultrasound was done - while Ms. Lavigne sat, bleeding, in a waiting room.2

The second scenario, occurring 80 years after the first, has an air of “back to the future” about it. Can anyone reasonably say that Canadian values are such that health care should be refused to anyone under any circumstances, never mind the ones depicted above? I know that all the apologies and corrections have been made in the Lavigne case. However, the fact that anyone even thought this should be the practice in 2001 should serve as a “canary in the mineshaft” for public health care. We have entered into dangerous territory.

As other panelists have mentioned, there are some definitional issues that arise when people start to talk about the role of the private sector and privatization. There is “private not-for-profit” and “private for-profit” and then there is “public.” While it is important to make these distinctions analytically, we still must ask the question “Just how important are the definitional issues in the end?” Let’s not confuse ourselves unnecessarily.

The Canadian Union of Public Employees represents approximately 500,000 workers across Canada - that is one in every 60 Canadians. A much higher proportion of families have at least one CUPE member living within that household.

When I talk to CUPE members, they are not confused about what private is. When I say “private sector” or “privatization,” they hear and think “for-profit.” They don’t think “Gee, does that mean the Sisters of Charity or does it mean Humana Corporation?”

Let’s face it, the concerns that Canadians have when we talk about two-tier health care are not that the Grey Nuns, the Sisters of Charity, the Victorian Order of Nurses, the Red Cross, or a so-called “private not-for-profit” community hospital is going increase its role in the health care system.

No, the concern is that for-profit corporations are going to increase their role - American corporations such as Humana, or Canadian corporations such as HRC, Cambie, Extendicare, CPL-REIT, ComCare, We Care, MDS, etc.

A. Ownership Matters

Don’t let anyone tell that it doesn’t matter if health care is delivered on a not-for-profit or for-profit basis. It matters greatly. Today’s Canadian Medical Association Journal has an article detailing the international literature on mortality rates in for-profit hospitals and for-profit does not fare well.3

Just a month ago, a Special Article in the New England Journal of Medicine detailed how enrollees in nonprofit Health Maintenance Organizations in the U.S. were more likely to be satisfied that their health care needs were met than those enrolled in for-profit HMOs.4

In a few days the Ontario Health Coalition will release a paper that details how ownership differences in long term care facilities are related to inferior levels of care in for-profit facilities.5

There are other similar meta-analyses of for-profit and not-for-profit health care and all show that not-for-profit ownership and delivery are superior on many dimensions.6

B. Privatization of Financing

There are several areas within the health care economy where the two-tier threats are the greatest.

When we talk about the proportion of health care spending that is private, we are really talking about the proportion of health care spending by non-government funders e.g., individuals, employers, and third party insurers.

Both the Kirby Senate Committee and the Mazankowski Council in Alberta recommend mechanisms that support this shift e.g., medical savings accounts, premiums for provincial health coverage, user fees, or increased reliance on third party insurance. These proposals all have the effect of contributing to the drive for two-tier health care. Some people will be priced out of the market and will not be able to afford health care when they want it and where they need it.

Privatization of funding means shifting costs to individuals and employers. Unions will be left with no choice but to bring health care to the bargaining table. The Chemical, Communications, Electrical and Paperworkers’ Union (CEP) have already sent a strong signal that private sector employers can expect them to do just that. A significant Canadian competitive advantage will be lost.

This is not just a problem for private sector employers. Public sector employers can expect the same. There will be additional costs to health care institutions as Medicare is dismantled. Conceivably, the costs of negotiated health care benefits could partially offset the so-called savings from de-listing or modifying the core set of medically necessary services.

Labour relations will inevitably deteriorate as health care benefits are placed on the bargaining table and health care employers learn that unions will not be prepared to trade wages and other monetary benefits for health care benefits.

Ironically, this situation will lead to two-tier health care as unionized workers negotiate employer-paid health benefits that the non-unionized population will not have. Moreover, non-union workplaces will find that they will more than ever have to provide some of the health benefits if they are to recruit and retain skilled healthcare workers. Workers and their families will live with the fear that they will not have health care benefits as they do now in the United States. Surveys show that health benefits are the number one issue for U.S. workers.7

Unions are not looking forward to this development but we are preparing ourselves for it if necessary. We would prefer instead a new expanded public health care system - one that includes home and continuing care as well as pharmacare - publicly funded and publicly delivered.

C. Privatization of Services and Service Delivery

More and more services in the health care sector are being privatized. De-listing services from provincial health plans turns the service directly over to the for-profit sector.

Contracting of Canada Health Act insured services (joint surgeries and cataract surgeries for example) brings us ever closer to two-tier.

Even not-for-profit hospitals are getting in on the act and being encouraged to act as if they are for-profit (driven there by under funding) and are creating ‘entrepreneurial’ parallel vehicles under their purview e.g., Vancouver Hospital Enterprises as the business arm of the Vancouver General Hospital.

The goal of these enterprises is to make “profit” by offering after hours services using idle diagnostic equipment for third party payers and foreign patients. They also plan to offer a broader range of enhanced services (upgraded rooms, internet access, Nintendo games) for a fee.

The end result is that different health services will be available and ability to pay will be the key to access those services. As this becomes commonplace within the not-for-profit sector, the defense against for-profit two-tier health care is weakened.

The contracting out of ancillary services is often ignored as being inconsequential to the whole process i.e., it doesn’t matter if so-called “hotel services” are contracted out. However, we know that the disposal of medical waste is an essential function and that housekeeping is critical to a systematic approach to hygiene in all health facilities.

For-profit corporations treat these duties as nothing more than “hotel services” similar to the services provided in the tourism industry. They are wrong. In order for health facilities to be free from superbugs and from other viral threats such as influenza, the housekeeping function must be performed to the highest standards and in-house provision of those services is the best way to ensure that is the case.

Similarly, proper dietary operations are part of the treatment process and an essential component of the maintenance regime of residents in continuing and long-term care situations.

D. Privatization Through Public Private Partnerships

The current fascination with public private partnerships (PPPs or P3s) is contributing directly to the creation of a two-tier health system.

The financing of infrastructure through P3s and the for-profit sector represents a fundamental shift in ownership patterns for health care. They are no longer owned as not-for-profit institutions. Rather, they are owned as for-profit institutions with contracts to provide specific services - usually management functions and non-clinical services. This is not because the for-profit sector does not want to provide clinical services but because they have not yet convinced governments in Canada that they should be allowed to do so.

I have not yet heard one for-profit corporation say that they are not prepared to contract clinical services in a P3 arrangement. Once this is permitted the two-tier cycle will be virtually complete. We will be well on our way - back to the future.

CUPE has conducted extensive analyses of P3 arrangements across the public sector - health and non-health. These analyses conducted by Prof. John Loxley and his students in the Department of Economics at the University of Manitoba uniformly show that there are no cost-savings, there is no service improvement and communities do not benefit.

Allyson Pollock and her colleagues at University College London have published extensive critiques of the Private Finance Initiative (PFI) in the UK including many articles in the British Medical Journal.8 Their analyses show that the UK experience with PFI hospitals is that the number of beds available to a community decreases and staffing levels are cut in order to facilitate profitability. The result: quality health care services suffer.

E. Conclusion

Canadians have many concerns about two-tier health care and they have every reason to be concerned. Unless, we take action to protect and expand not-for-profit health care, the many canaries in the mineshaft will have perished and the Canadian public will have witnessed the death of universal and accessible heath care. Two-tier will be the reality.

1. Helen Heeney ed. Life Before Medicare: Canadian Experiences, The Stories Project, Ontario Coalition of Senior Citizens Organizations, 1995, p.39.
2. Ottawa Citizen, October 12, 2001
3. P.J. Devereaux et al., “A Systematic review and meta-analysis of studies comparing mortality rates of private for-profit and private not-for-profit hospitals”, CMAJ, 166(11) May 28, 2002; 1399-1406.
4. Ha T. tu and James D. Reschovsky, “Assessments of medical care by Enrollees in For-Profit and Nonprofit Health Maintenance Organizations,” New England Journal of Medicine, Vol. 346, No. 17, April 25, 2002: 1288 - 1293.
5. Ontario health Coalition, Ownership Matters: Lessons from Ontario’s Long-Term Care Facilities, prepared for the Hospital Employees’ Union (B.C.), May 2002
6. See Rrachlis, Michael, “The Hidden Costs of Privatization: An International Comparison of Community and Continuing Care” Without Foundation, CCPA, November 2000.
7. Diane Stafford, “Medical Coverage’s Top-Rated Benefit Among U.S. Workers, Study Finds”, Knight-Ridder Tribune, May 23, 2002.
8. For a summary of the position of Pollock, Loxley and a presentation on the trade implications of PPPs see CUPE The Facts, “Experts Tell Romanow Commission that Public Private Partnerships are not the Answer”, May 2002. See also Pollock et al., “Private finance and ‘value for money’ in NHS hospitals: a policy in search of a rationale?”, British Medical Journal, May 18, 2002

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