Privatization in Health Care

Private for Profit Surgeries

In September 2020, BC Supreme Court Justice John Steeves ruled against Dr. Brian Day and the Cambie Surgery Centre, culminating a nearly ten year challenge to Canada’s Public Health Care system.

Day argued patients have a constitutional right to pay for private care when wait times in the public system are too long. However, in the 800 page ruling, Justice Steeves stated that duplicate private health care “would not decrease wait times in the public system” and that there was ample evidence to conclude that “wait times would actually increase.” “Further, the evidence suggests that duplicative private health care would increase demand and costs overall while also reducing capacity in the public health care system. There is a genuine risk that both the sustainability of the universal public system and equitable access to health care would be undermined.”

Private for profit clinics receive public money, while at the same time, when extra-billing occurs in a province/territory, the federal government claws back an equivalent amount from the health transfer money sent to that province/territory. This has resulted in Ottawa withholding $16 million in health transfer payments from the BC government because of this extra billing by private clinics.

Although this decision by the supreme Court is a ‘win’ for public healthcare, it is certain that this decision will be appealed and end up in the Supreme Court of Canada. If the plaintiffs win their appeal in the Supreme Court of Canada, it will lead to a two tier system, similar to that in the United States.

Recommendations:

  1. Increase the number of surgeries completed in the public system by making more efficient use of existing operating rooms and pre- and post-surgical services.
  2. Enforce the law related to extra billing and crack down on clinics that continue this practice.

    Long Term Care

    Research shows ownership of residential care facilities affects care quality and staffing levels, and that for-profit residential care is generally inferior to care delivered in public or non-profit facilities.

    A new study has confirmed that COVID-19 cases and deaths are far more prevalent in private, for-profit long term care homes than in non-profits controlled by the government. Other studies confirm that privately run facilities are more likely to have wider and more deadly outbreaks than non-profit or municipal homes.

    The BC Rural Health Network believes that the most effective and efficient way to deliver care is through a publicly funded and controlled system and that long term care should be part of the public health care system in Canada.

    Recommendations:

    1. Make the necessary policy changes to ensure long term care is
    delivered publicly

    2. Make it a policy that staff work at one facility only (“single-site order”)

    3. Make sure all workers are paid the unionized industry standard

    4. Work towards full-time hours for staff

    5. Ban sub-contracting

    6. Public funding for direct care must be spent on direct care only

    7. Reinvest any excess revenue into frontline care

    8. Ensure greater transparency and public reporting


    Public-Private Partnerships (PPP or P3s)

    P3 is the name given to a method of privatizing health services and facilities. It stands for public-private-partnership. In a typical P3 deal, the government allows for-profit private corporations to finance, design, build and operate health facilities. The government commits to lease the facility and use certain services for a period of as much as 30 years or more.

    Past British Columbia governments have entered into P3 arrangements to build needed hospitals, promising that the P3s will save money and be more efficient. The reality is very different. P3s cost more to build and operate, take private profits from the public health budget, hide their costs, and erode the quality of services.

    Why P3s are more expensive and why P3s are not a good idea:

    1. P3 projects expect a profit that is worked into lease payments made
    by government. Public money directly subsidizes private corporate
    profits.

    2. P3 projects are more costly because the private sector always pays
    higher interest rates on borrowing money than the public secto

    3. P3 projects have extra layers of bureaucracy – legal, financial and
    administrative. This diverts funds aways from patient care.

    4. In public facilities, most services – cleaning, hospital records, security
    – are run on a non-profit basis under the control of hospital
    management. While some services may be privatized, contracts are 
    usually cancelable on 6 months notice. However, in P3s, patient
    support services are run for profit by private corporations.

    5. P3s are only accountable to their shareholders. They have no
    obligation to release information to the public – or to elected officials-
    about their finances, operations, service quality or contract costs.

    Recommendations:

    1. Ensure there is a robust communication as well as public
    consultation for P3 projects, including the question of whether the
    project should be publicly or privately delivered.

    2. Calculate the full life-time costs of delivering the project and compare
    these to public alternatives that deliver the same level and quality.
    Monitor and manage government risk exposures and obligations.

    3. Ensure the appropriate benefits to be captured by the public sector.

    Note: Health care is a complex and constantly evolving system. This position paper is a living document that will be reviewed and adapted in response to new information.