Privatization of Healthcare

Question 1

Privatization of HC in Canada

• prevalence & current situation

Answer 1

since **1970s → Medicare **(no private HC)

Since then, creeping privatization of HC

gradually taking up more of HC → today: 1/3 of HC is privatized (1 in 3 dollars goes to private sector)

more politicians/businessmen & hospital admins are saying it is inevitable, unstoppable & the **way of the future **

Question 2

Privatization of HC - all over the world

Answer 2

HC systems all over the world are becoming increasingly privatized

• as part of larger project of **Globalization ***(introducing market into every area of society all over the world) *

Since the **80s **→ about pushing out state & bringing in market

Question 3

As Sociologists, How is this issue of Private vs. Public HC become settled?

Answer 3

by looking at **historical records of both **& make comparisons

Question 4

How can Sociologists examine Canada in terms of private vs. public HC?

Answer 4

**Public HC: **state-run HC history goes back over half a century

Private HC: doesnt have national private HC system but there is one next door (USA) that since the **80s **has developed the largest private HC system

Question 5

How is the example of the USA & its private HC system important to consider when examining Canada’s HC system?

Answer 5

potentially important because it shows us **Canada’s future **if we privatize HC

• same US corporations will come into Canada & we will end up with the same HC system as USA

Question 6

Private vs. Public Healthcare

• Conclusions
  
  • impact on health of Americans
  • rich vs. poor
  • results of private HC

Answer 6

facts & figures demonstrate conclusively that privatization of HC has been **absolute disaster **for the health of most Americans

• the rich end up with best HC in world, rest of society ends up with poorer HC & as a result, **poorer health ***(works better for rich by taking away resources from everyone else) *
• WHEREVER private HC is introduced:
• higher prices (for HC)
• higher inequality of **access **
• less **HC coverage **for more **people **

- basically: ***pricesgo up,services** go down *

Question 7

Healthcare & Private Sector

Answer 7

private sector’s job is to **maximize profits **by **raising prices **as high as possible & **reducing services **to **minimum **

• when you care for profit, *all you care for is profit *

Every single place where HC has privatized – *prices go up, services go down *

Question 8

Roy Romanow - Royal Commission (2003)

Answer 8

• Former SK Premier
• in charge of RC to investigate ways to improve HC
• him & fellow members travelled around Canada & spoke to whoever wanted to talk to them (private or public advocators)
• told those in favor of **private HC **that if they could provide ANY evidence to show it works better than public HC, they will support **privatization **
• unable to provide ANY evidence

Question 9

**Healthcare Systems: **

USA vs. Canada

Answer 9

USA - never had comprehensive state-run medical care like **Canada **

**- **always more decentralized & more room for private HC

Question 10

Brief History of Healthcare in USA

• After WW2 & Prior to the 1980s

Answer 10

After WW2: Biggest expansion in HC as part of building of welfare state

**Federal Government **set up state-run insurance only for the most needy

→ Medicare (for the poor) & Medicaid (for elderly & disabled)

• rise in companies like **Blue Cross **& **Blue Shield **→ policy to provide insurance to non-profit health organization, which meant that most hospitals/clinics ran on non-profit basis

**Early 1970s: **GPs organized into group practices **→ Health Maintenance Organizations (HMO’s) - **non-profit practices where doctors worked for salary

(only specialists remained independent)

Question 11

History of Healthcare in the USA

• 1980s onwards

Answer 11

• Privatization began in corporate sector → at this time,** workers compensation **was largest area of HC that was still privately insured by for-profit insurance companies
• division emerged in HC → government dealt w/ non-profit health organizations but corporations got health insurance from private insurance companies
• Chrysler proved private HC insurance was 3x more expensive
• corporations demanded lower rates → led to Managed Care Arrangement in **1988 **

**- **caused small businesses to go bankrupt or bought by bigger companies

• HMO’s, Blue Cross & Blue Shield bought by private insurance companies & converted to for-profit basis

Question 12

What problem did private healthcare insurance present for corporations? What study corroborates this?

Answer 12

too expensive

Chrysler Corporation conducted the 1st study comparing private (USA) & public health insurance (Canada)

• per car manufactured: private HI cost 700$ vs. state-run HI costs **223$ **

**- **private HC costs **3x more **

Question 13

Corporations & high costs of private health insurance

• results

Answer 13

demanded private insurance companies to lower rates →

in 1988, private insurance companies came up with an alternative - Managed Care Arrangement

• 3 year contract with industrial corporation where private insurance company provided health coverage at lower guaranteed/stable price

Question 14

What was the result of the Managed Care Arrangment in 1988

Answer 14

→ caused fall in profits which triggered wave of mergers/consolidations (small companies went bankrupt or bought by larger companies)

by **1994 **→ top 100 insurance companies controlled nearly 90% of insurance **industry’s profits & assets **

(profits: 12 billion US $$, assets: 2 trillion US $$) → Health insurance premiums alone made over 300 Billion

**- **by **1994 → **10 largest HMO’s had combined **10.5 billion **US in liquid assets

→ Blue Cross & Blue Shield &** HMO’s ** bought by private insurance companies & converted into for-profit organizations

• HMO’s consolidated together (in **1984: **18% of HMO’s were for-profit vs. **1997: **75% of HMO’s)

Question 15

How did the USA’s Healthcare System get privatized so quickly?

Answer 15

**Ronald Reagan → **leading figure in new right movement

• when he became president, introduced **laws to favor corporations → **particularly policy of Deregulation

**→ **eliminated most regulations governing conduct of corporations & regulation saying HC should be non-profit

-basically allowed corporations to do whatever they wanted & allowed in private insurance companies

Question 16

Managed Care Arrangements

In order to lower & stabilize corporates health insurance rates, what was the tradeoff?

Answer 16

private insurance companies raised insurance rates for individuals/small companies

→ late 80s: some rates rose by up to 400% in a few years

Question 17

At the same time that Insurance Companies increased rates (late 80s → rose by up to 400%), what did the Federal Government do?

Answer 17

Introduced cutbacks to Medicare & Medicare

Question 18

What was the result of Federal cutbacks in tandem with an increase in private insurance rates?

• Statistics (4)
• Result?

Answer 18

** large increase in # of people without health insurance

by 1991 → 33 million Americans without health insurance

**1997 → ** 44 million without health insurance (1/3 children) - still this today

→ 70 million Americans under-insured

• # of businesses providing health coverage to workers steadily declined

2000 → only 1/2 of US workers recieved any medical benefits through work

RESULT: major decline in American’s health

Question 19

What evidence is there that the increase in # of uninsured & under-insured led to a major decline in American’s health?

Answer 19

Study published by **Harvard Medical School **in 2006

• Found insured Americans have same level of health as Canadians
• Uninsured Americans had much **poorer health **(especially w/ chronic illnesses)
• Compared to CDNs, Americans are:
• 42% more likely to have diabetes
• 32% more likely to have high BP
• **12% **more likely to have arthritis

in **2005, **1.5 million Americans filed for bankruptcy (50% **b/c of medical problems)

Question 20

What tactics did Private Insurance Companies use to keep profits high?

(6 main, 3 subpoints)

Answer 20

• **Raise **insurance rates for small businesses/individuals
• **Cutbacks **on services
  
  • **deductibles **raised
  • some **specialized treatments **removed from standard benefits package
  • co-payment fees (extra-billing)
• restricted consumer choice
• flat rate system for paying doctors
• hospital support services outsourced to private companies
• replace trained nurses with unskilled/semi-skilled cheaper staff

Question 21

Tactic to keep profits high/cut costs: Cutbacks on services

Answer 21

• deductibles raised
• some specialized treatments removed from standard benefits package
• co-payment fees (extra-billing)→ introduced by more insurance benefit packages

Question 22

Results of Cutbacks on Services

Answer 22

once introduced, co-payment fees rose

→ 1987-1993: hospitals co-payment fees rose by over 450%

Overall, patients share of doctors fees tripled

(amount of doctor’s fees paid by patient)

Question 23

Tactic to keep profits high/cut costs: Restricting Consumer Choices

Answer 23

Under terms of Managed Care Arrangements, insurers gave employers annual list of doctors & services covered under plan

→ can only go to corporate approved doctors & services

Question 24

What did private insurance companies want from corporate-approved doctors?

Answer 24

→ pay the minimum possible in worker’s compensation & get workers back to work ASAP

• health of patient is secondary to raising profits of insurance company & company that employs them

Question 25

Tactic to reduce costs/increase profits: Flat Rate

Answer 25

Private insurance companies introduced new system of paying doctors flat rate per patient

• gave doctors financial incentive to spend less time with each patient so they could see more patients & make more money

Question 26

When did HMO’s total cost drop? By how much?

How was this portrayed in the media?

Answer 26

1996 - HMO’s total cost dropped for 1st time in over a decade

→ dropped by 4% compared to previous year

Right-wing Media hailed this as major triumph for private-sector HC

• ignored that drop in cost achieved primarily by denying/delaying services
• ignored dramatic decline in health standards caused by new policies

Question 27

Tactic: Replacing Trained Nurses

Result?

Answer 27

cut costs by replacing trained nurses with unskilled/semi-skilled cheaper staff

→ small # of RN’s in supervisory position - forced to work 16-hr shifts

RESULT: major increase in levels of death & injury caused by nursing mistakes (nurses & nursing assistants)

Question 28

What studies show that Privatization of HC has caused a decline in American’s health?

(especially regarding replacing RN’s with less-skilled cheaper staff)

Answer 28

US Institute of Medicine Study - 1999

Chicago Tribune Newspaper Partial Study - 2000

Harvard Medical School Study - 2006

Question 29

US Institute of Medicine Study

• year?
• findings?

Answer 29

1999

estimated between 44-98k Americans were killed by medical mistakes each year

Question 30

Chicago Tribune Newspaper Partial Study

• year?
• findings?

Answer 30

2000

found 2,000 dead & 10,000 injured by medical mistakes (of RN’s)

Question 31

Statistics on # of **for-profit hospitals **

• year?
• percentage?

Answer 31

By 1998:

15% of USA’s 5,200 hospitals had been bought by corporations & converted to for-profit status

Question 32

Columbia/HCA

• history
• assets/profits

Answer 32

Private HC corporation → founded in 1987 by small group of doctors & corporate investors

→ by 1997 (10 years later), became largest private HC organization in world

• owned ~350 hospitals & ~300 clinics/HC facilities
• quarter-million employees
• income of ~25 billion a year
• (within 10 years - higher revenue than Mcdonalds, General Electric & every CDN province except ON & QB)*
• under investigation for insurance fraud → for submitting fraudulent worker’s compensation claims on massive scale - despite this, still expanding & buying more HC facilites

Question 33

How have these new for-profit hospitals prospered? Result?

Answer 33

By raising prices & focusing on high-income patients

• decreased services provided to low-income patients

→ meaning they are diverted to remaining non-profit hospitals - growing strain

Result: more HC services for rich & less for the rest of Americans

Question 34

Statistics showing the unequitable distribution of consumption of HC services

• year?

Answer 34

By 1997 → 72% of HC services being consumed by richest 10% of population

top 10% gets 3/4 of HC leaving only 1/4 for the remaining 90%

Question 35

Tactic to cut costs: Outsourcing Hospital Support Services to Private Companies

Answer 35

• hospital services consolidated w/ several hospitals in region sharing costs for administration, diagnostic & food services

*→ actually increases costs b/c accompanied by privatization/outsourcing of support services *

1995 → Hospital Support Services (laundry & catering) mostly private in US → cost 24% more per day than public SS in Canada

• CDN hospitals 42% less expensive per patient discharged despite 48% longer average length of patient stay

For-profit US hospitals cost ~3x more per hr of patient stay

1995 study concluded if US switched to public system - would save 7.5 billion a year

Question 36

Privatization & Americans Reaction

• Result?

Answer 36

• had no input into privatization of HC
• were taken by surprise → once they were aware: protested
• in response to public pressure*→ President Bush Sr. & Clinton put forward proposals introducing modest restraints on private HC

Early 90s→US Insurance Industry spent ~100 million on propaganda campaign against Clinton’s HC reforms

• created limited public support
• focused on sex scandals

→although polls showed Americans didn’t think it was relevant, authority of presidency was still undermined & reforms did not get passed

Question 37

What did opinion polls show about Americans & Canadians views on their HC system?

Answer 37

USA:

• 90% “highly disatisfied” with HC system
• 2/3 preferred to switch to public HC system like Canada

Canada:

• 80-90% satisfied with Canadian HC
• 80% favored continued/expanded role of Fed Gov in HC
• < 10% prefered privatized system

Canadians traditionally view idea of making profit from misfortunes of sick/disabled as morally repugnant

-Majority of Americans feel the same way

Question 38

How is it that privatization is still occuring despite the majority of Americans/Canadians being opposed to it?

Answer 38

even though Canada & US are supposedly democracies, power of billions of corporate dollars speaks louder than **voice of ** majority of pop’n

Question 39

Colleen Fuller

Answer 39

Canadian HC Analyst → examined US’s privatized HC system

concluded that it “offers the best care for the fewest number of people and this is its greatest accomplishment”

(in other words, privatized HC is best if your rich but not if you’re the other 90%)

Question 40

How has Obama impacted Healthcare in the USA?

Answer 40

• main plank in platform was vow to reform HC
• introduced Obamacare → American version of Public Private Partnership (P3)
• when 1st looked at reforming US HC → talked about changing to Canadian-style state-run HC
• abandoned idea under pressure from corporations
• Instead, forced private insurance companies to provide HC insurance to poor (largely paid by Fed Gov)

Question 41

Effect of Obamacare on US HC

Answer 41

disastrous

• private sector will provide absolute minimum care while charging government maximum for doing so → cost of Obamacare will skyrocket
• eventually, Obamacare will be abandoned before US government goes bankrupt

Question 42

Obamacare

• Expected results

Answer 42

→ American version of Public Private Partnership (P3)

• situation where private corp. gets contract from government
• basically a way of funneling tax dollars into private corporations
• done with good intentions but will only make private sector richer & drive US government further into debt

Question 43

Britain’s HC system

Answer 43

National Health Service (NHS)

just like Reagan in US, Margaret Thatcher introduced Deregulation & Privatization to Britain in mid-80s

• privatization in Britain has followed P3 model
  
  • signing long-term contracts with private HC companies

2002 - Introduced Private Finance Initiative

• Consisted of network of small private hospitals around Britain w/ government contracts

Question 44

Results of privatization of NHS

Answer 44

• contracts guarantee big profit for private companies by bleeding NHS dry → despite this, hospitals have inadequate resources & high prices
• since hospitals have to give more $$ to private contractors, have less $ for internal needs

studied by # of ppl including Dr. Allyson Pollock (prof of public health research & policy @ Queens Uni in London) → concluded privatization of HC has been disastrous

• Since mid-80s, 1/3 of hospital beds closed & nursing budgets cut by 1/4
  
  • some hospital wards no longer have nurses at all → replaced by virtually untrained Ward Hostesses

Question 45

Dr.Allyson Pollock

Answer 45

prof of public health research & policy @ Queens Uni in London

• one of many people who have studied privatization of HC in Britain

→ concluded privatization of HC has been disastrous

argues that these contracts are disaster for general public & amount to “a free lunch for the private sector where governments simply act as tax-collectors, collecting taxes from the public on behalf of private corporations”

Question 46

Private Finance Initiative (PFI)

Answer 46

Despite warnings of people like Dr. Pollock → in 2002, Britain introduced PFI

• British version of P3
• Consisted of network of small private hospitals around Britain with government contracts
• Despite having guaranteed income from government, private hospitals had inadequate resources & high prices
  • 1st of these hospitals went bankrupt in 2005
  • since then, many others on brink of bankruptcy

Question 47

Privatization of Canadian HC

• problems for corporations?

Answer 47

• begins in US where big corporations 1st emerged
• since US is under their control, will inevitably target Canada next

Problem is many Canadians oppose privatization

• have “entitlement mentality”
  
  • ‘ridiculous’ idea that HC should be a right which every Canadian is entitled to

Question 48

How have corporations tried to change Canadians attitudes about private HC?

How did the Canadian government justify cutbacks?

Answer 48

launched propaganda campaign →began in 80s with claims that HC costs were spiralling out of control

• part of larger prop. campaign saying growing cost of social programs in general (particularly health, education & welfare) is pushing Fed & Prov government into debt
• Due to recession, social programs too expensive
• to stop government from going into debt, Canadians need to make do with fewer social services
  *

Question 49

Age of Cutbacks

Answer 49

cutbacks to all government services (including Healthcare)

• due to recession, social services too expensive & government going deeper into debt

Between 1988-1998: cut 36.5 billion from Federal HC budget

• major consequence: HC standards fell

Question 50

Consequence of Cutbacks in Social programs

Answer 50

HC standards fell

• 30% of hospital beds closed
• staff reductions
• closure of many out-patient services
• delisting of medical services
• rising deductibles for drug plans
• longer waiting lists

Question 51

What argument did the government make to justify massive HC cutbacks?

Was this argument accepted?

Answer 51

Argument that growing cost of social programs (like HC) was responsible for government debt

→ accepted & repeated over & over by CDN media

Question 52

Was the claim that government debt was largely responsible for growing cost of social programs true or false?

• evidence

Answer 52

• almost entirely untrue

Mimota Study (1990) published by Statistics Canada

• studied increase in Canadian government debt from 1975-1989
  
  • 6% of increase in gov. debt due to higher social program spending
  • 94% due to growing tax breaks & subsidies for corporations, borrowing from private banks & rising interest rates
• Wealthfare has driven our government into debt not social programs like HC
• (financial aid provided to corporations by government)*

Question 53

Why is the majority of Government debt attributable to corporations?

Answer 53

1956- corp taxes accounted for 1/2 of government income

1996 - corp taxes less than 12% of gov income (lowest % of Western countries)

• in addition to corporate tax cuts: tax credits & tax holidays introduced
• by 1984: 80k businesses w/ combined profit of 17 billion paid nothing in taxes

Corporate Transfer Payments → subsidies for corps (supposedly incentives) rose sharply through 70s & 80s

• since 1980 → gov transfer payments avgd 23 billion/year or 1,500 per tax payer

Question 54

(2) Major reasons for growth of HC costs in Canada

Answer 54

1) tax cuts, credits, holidays &subsidies for corporations
* increase in corporate transfer payments (subsidies)

→ shortfall made up by raising income & sales tax

2) Political decisions regarding prescription drugs:

• Bill C-22
• Bill C-91

Question 55

Contribution of Prescription Drugs to Growth of HC Costs in Canada

• political decisions
• Result?

Answer 55

1987 - Mulroney gov enacted Bill C-22 which weakened licensing arrangement under which Canada’s HC service previously had bought generic cheaper drugs usually made in Canada → forced HC system to buy more expensive brand-name drugs

1993 - Bill C-91 expanded this by granting 20 year protection for brand-name drugs

• also allowed evergreening by corporations (where corps introduce minor variations to drug to extend patent indefinetely

RESULT: Canada went from having lowest drug costs in industrial world to 2nd-highest (after the US)

Question 56

Results of Bill C-22 & C-91

• evidence & statistics

Answer 56

Canada went from having lowest drug costs in industrial world to 2nd-highest (after US)

• 1987-1997: prescription drug costs doubled → from 9% to 14% of total health exp.
• Mid-90s: avg pharm. companies profits = 3x avg profit of Fortune 500 industries
• sunk to joint last place w/ US in terms of availability of publicly insured drug plans
  
  • by 1996: Only 43% of CDN population eligible for drug plan coverage
    
    • deductibles rising steadily

Question 57

Largest factor of Increased HC Costs since 1980s

Answer 57

rising drug prices imposed by foreign corporations = single largest factor

2005: CIHI published report saying rising drug prices “key escalator” pushing up HC costs

Question 58

What was the reason given to the public for the financial problems of the Government?

• Why did they tell the public this?
• What evidence did they have to back them up?

Answer 58

right-wing politicians & media claimed it as due to inefficiencies & out of control spending in HC system

→ to undermine welfare state so private sector could usher in/push privatization

Fraser Institute (right-wing think-tank): funded by corporations to conduct studies that basically provide evidence to back up corporations

• only 1 conclusion to all studies: less government & more corporate involvement
• provided legitimation for politicians & businessmen to push privatization agenda
• claims to be academic but simply corporate advers

Question 59

Impact of findings provided by the Fraser Institute & other institutes on general public?

What other attempts have been made to capture public support?

Answer 59

relatively little impact on general public

→ Eventually came up with P3 (gov contract given to corps to perform some service)

• generally represented as supplement to public HC
  
  • Ex) Sask Party pushing for private MRIs largely paid by gov

Question 60

Problem with P3 in Canada & setting up clinics & private services alongside public clinics & HC services

Answer 60

P3 is public private partnership → However, private sector does NOT want partnership, they want to take over

• private HC corporations constantly work to undermine public sector
• pressure politicians to cut funding to public HC so ppl are forced to turn to private

Question 61

Major entry point for private sector into HC

• Example in Alberta

Answer 61

Worker’s Compensation → under Canada Health Act - seperate from Medicare

• employers began to privatize HC benefits to cut back on benefits recieved by workers

1992: 13 of AB’s largest corps formed Alberta Employer Committee on HC

• only allocated 1.4% of pay roll to health/dental benefits (& still tried to shift HC costs to employees)
• implemented Flexible Benefits Plan that changed nature of coverage
  
  • meant standard insurance package covered only minimum services & had to pay higher premiums to get more coverage

Question 62

Change in Worker’s Compensation

• before vs. after 90s

Answer 62

up to the 80s: run by worker’s compensation board (non-profit organ. consisting of reps of employers, employees & government)

Early 90s: board provided benefits to more workers than American privately run WC

• benefit rates 4-5x higher despite costing 25-50% less

Yet, more corp employers withdrew from boards & set up private insurance policies

Question 63

IN USA:

Despite Worker’s Compensation Boards providing benefits to a greater % of workers, benefit rates 4-5x higher despite costing 1/4-1/2 less,

More corporate employers still withdrew from boards and set up Private Insurance Policies

• Explain these policies
• criticisms?

Answer 63

• cutback on services & created list of doctors patients could see
• paid doctors 2x standard public rate to get worker’s off compensation & back to work ASAP (demand management)

HC Analyst Shari Caudron said “overall intent is to reduce HC utilization not to reduce illness”

Question 64

What similarities do Canada & US share in regards to privatization of HC?

Answer 64

• corps withdrawing from WC boards → set up private insurance policies & changed to system of Integrated Health Service that focused on demand management
• private insurance companies bough non-profit companies & converted them to for-profit status → in 80s/90s in USA
  
  • ex) American Insurance Company Liberty Health bought Ontario Blue Cross & did the same
    *

Question 65

Summary of

• corporate tax cuts
• political decisions regarding prescription drugs
• other entry points for private sector

Answer 65

→ Mulroney & Chretien - steadily dropped corp taxes through 80s & 90s

• shortfall bc of corp tax cuts made up by raising income & sales taxes

Tax credits, holidays & subsidies (Corporate transfer payments)

1987 - Bill C-22 forced HC system to buy more expensive brand-name drugs

1993- Bill C-91 granted 20 year protection for brand-name drugs & allowed evergreening

Media & Politicians blamed increased HC costs that were due to changing tax & drug policy on inefficiencies & out-of-control spending in HC system

Fraser Institute & other institutes provided legitimation for politicians/businessmen but barely impacted general public

after various attempts to capture public support, came up with P3

also workers compensation = major point of entry for private sector into HC

more corporate employers withdrawing from WC boards & setting up private insurance policies → Integrated Health Service focusing on demand management

Question 66

In course of the 90s: hospital care increasingly embraced US model of HC

• Evidence? (timeline)

Answer 66

1991 → Winnipeg 7 Oaks General Hospital adopted US principle of Managed Care

1997 → Health Resource Group opened Canada’s 1st for-profit hospital in Calgary

2000 → Ralph Klein introduced **Bill 11 ** in AB → private clinics allowed minor surgeries & over-night stay

2004 → AB gov gave 6 million $ contract to HRG to perform ~500 surgeries (Strategic Partnering)

2005 → Canada’s 1st primary care clinic opened in Vancouver

2006 → 23 private surgical centres in Canada (mostly in BC, QB, also AB)

Question 67

1991 → Winnipeg 7 Oaks General Hospital adopted US principle of Managed Care

Answer 67

by implementing treatment guidelines designed to cutback on hospital stays

• guidelines developed by American medical management company
• led to some financial savings → accomplished at cost of closing beds & reducing services

Winnipeg was 1st but many other CDN hospitals adopted similar principles in 90s

Question 68

1997 → Health Resource Group opened Canada’s 1st for-profit hospital in Calgary

Answer 68

HRG = medical corporation composed on doctors & corporate investors

called Health Resource Center

• To get around Canada Health Act (1984) → said it was clinic run by surgical corporation (didn’t call it a hospital)

Question 69

2000 → Ralph Klein introduced **Bill 11 ** in AB → private clinics allowed minor surgeries & over-night stay

Answer 69

allowed private clinics to perform minor surgeries & have over-night stay

at this time, AB gov run by Conservative Ralph Klein

• supportive of HRG & privatization of HC in general

Question 70

2004 → AB gov contract with HRG

Answer 70

gave 6 million $ contract to HRG to perform ~500 surgeries

even though HRG charged 10% more than public hospitals per procedure

Question 71

2005 → Canada’s 1st primary care clinic opened in Vancouver

Answer 71

• Ralph Klein was most out-spoken supporter of HC privatization in Canada → Other provinces followed his example*
• opened with 1,200$ initiation fee & 2,300$ annual fee
• clearly part of two-tier HC service (only for rich who can afford it)

Question 72

After major expansion in private clinics in early 2000s

→ problems arised in late 2000s

Answer 72

Despite having higher prices & providing fewer services, private clinics still had difficulty making ends meet

• May 2010 → AB gov gave HRG 2 million to keep HR Centre out of bankruptcy
• August 2010 → AB gov went to court to get out of contract w/ HRG
• 2000→ Winnipeg’s Panam private clinic had to be bought by prov gov (going bankrupt) → converted to public → costs fell
  
  • cataract extraction surgery cost fell from 1000$ to 700$

Question 73

Strategic Partnering

Answer 73

more & more provincial govs continued cutbacks on public HC & multi-million contracts to private HC corps

• prov gov’s cut funding to public hospitals so they are forced to cutback on services

services then offered by private corporations → outsourcing of rehab, diagnostic, X-ray & lab services

tell us there’s no money for public HC yet come up with $$ for private

Question 74

Result of Strategic Partnering of Provincial Governments & Private HC corporations

• statistics/evidence

Answer 74

Slow & steady expansion in privatization of Canada’s HC system

Manitoba:

• 1984-1994: went from 4 private HC companies with combined income of 25 million → over 100 with 100 million

Ontario: quiet privatization

• since 1970s - outsourcing of home-making services (food/laundry)
• hospitals encouraged to think in terms of profits (co-payment fees, developing commercial operations & raising parking fees)
• Elderly care = field with largest point of entry for private sector

Question 75

Winnipeg - Privatization of HC

Answer 75

1991 → Winnipeg 7 Oaks Hospital adopted Managed Care principle

1984 → 4 private clinics - combined income = 25 million

1994 → over 100 private clinics - combined income = 100 million

Question 76

Ontario → quiet privatization

Answer 76

since 1970s → outsourcing of food/laundry services - contracted out to for-profit HC companies

Hospitals encouraged to think in terms of making profit by charging user co-payment fees, developing commercial operations (stores/restaurants) & raising parking fees

Elder Care

Question 77

History of Elder Care in Ontario

Answer 77

Early 20th Century → nursing homes run by charities/small family businesses

1950s/60s → welfare state set up, Medicare & expansion in public HC

• studies conducted on private nursing homes - found residents were underfed/overcrowded/neglected/abused & no competant medical care
• 1965 → Ontario Welfare Council study found 165/425 (1/3) ON private NHs provided substandard care

1966 Nursing Homes Act - to improve nursing home living conditions

• many small family-run NHs going bankrupt → bought by corporate chains

Late 60s/early 70s → private NHs ran by large corp chains

70s → nursing corporations got organized & formed ONHA→ pressured prov to expand private NHs (rewarded politicians for giving them contracts - legalized bribery)

1979-1983→ private institutional long-term care expanded by 40% - public only by 5%

Question 78

Change in Elder Care in 1950s/60s/70s

Answer 78

new non-profit elder care institutions set up → Homes for the Aged run by municipal gov

50s/60s → 1965 Ontario Welfare Council study showed 1/3 of NHS had substandard care

1966 Nursing Homes Act →stricter regulations to force private NHs to improve living conditions

• small family-run NHs went bankrupt → bought by growing corp chains

1974 → already 75 corp NH chains (compared to 35 in BC, 5 in SK & 0 in QB)

ONHA formed in 70s - represented over 90% of ON NHs in late 70s

• pressured gov to expand private nursing homes

Question 79

Extendicare

Answer 79

largest private NH chain

1980 → bought Crown Life insurance → turned it into CrownX

1989 → owned 59 CDN & over 150 US NHs

• 40 paramed facilities, managing 4 hospitals
• 4th largest NH chain in NA (income of 65million/year)

Question 80

How did large corporate NH chains influence politicians?

Answer 80

• rewarded politician when they retire → given high-paying job
• contributed to election campaign fund
  *

Question 81

Why did corporations give politicians well-paying job after they retired if they gave corporations contracts?

Answer 81

1) reward
2) b/c former politicians usually keep close ties with current politicians

Question 82

Contribution to Election Campaign Fund

• Example
• Result

Answer 82

1982 → Canadiana NHs donated over 10k to election campaign fund of ON governing Conservative party

• That same year → granted licensing to open over 8,000 new beds

Private sector went from providing 47% to providing 54% of total NH beds
1979-1983 → private sector of institutional long-term care expanded by 40% where public only expanded by 5%

Question 83

Public’s Response to growing privatization of elder care

Answer 83

1980s → protests in ON against growing privatization of elder care

friends & relatives organized into Lobbying groups

Question 84

Lobbying Groups & those against privatization of elder care

Answer 84

Concerned Friends on ON Citizens in Care facilities - 1982 report

CUPE

Liberal Party

NDP (supported by CMA)

• Advocacy Centre for Elderly*
• Advocacy Resource Centre for Handicapped*
• ON Coalition for NH Care Reform*
• ON Coalition for long-term Care Reform*
• Social Planning council of metropolitan Toronto*

Question 85

Lobbying groups & Others against Privatization

• reports

Answer 85

1982 - Concerned Friends of ON Citizens in Care Facilities

• report declared most ON NHs were “sterile, friendless…old people stare at walls.. told when to get up, eat, bathe…if they protested..they were considered difficult…medicated or restrained…inadequate hopeless places where people go to die”

CUPE - representing over 10,000 employees in field of elder care

ON Liberal Party

NDP → said all for-profit NHs should be phased out altogether

• supported by CMA - 1984: task force → concluded “when an institution becomes the only answer for the care of elderly person it must be one that is run on principle of loving care not tender loving greed”

Question 86

Government’s reponse to:

• 1982 report by Concerned Friends of ON Citizens in Care Facilities
• NDP sayind all for-profit NHs should be phased out altogether
• 1984 report by CMA task force

Answer 86

slowed down privatization

1987 → Nursing Homes Act amended

• had to submit proper financial statements & accept resident bill of rights

Question 87

Criticisms of 1987 - amendments to Nursing Home Act

Answer 87

Canadian HC analyst - Vera Tarman concluded changes were mostly “symbolic gestures”

• gov accepted financial statements that were so general & confusing it was impossible to determine profit margin
• inspections were cursory (quick glance-over/not proper)
• new regulations made no difference b/c weren’t enforced
• so-called bill of rights made little difference in quality of care

Question 88

Evidence of Vera Tarman’s conclusions that amendments made in 1987 to Nursing Homes Act were:

• “symbolic gestures”
• financial statements = confusing & general
• inadequate inspections
• impossible to determine profit margin
• regulations not being enforced
• quality of care not improved

Answer 88

2004 → CTV’s W-5 aired footage of abuse & theft in 2 ON NHs owned by Central Care corp.

Question 89

Response to CTV’s W-5 footage of abuse & theft in 2 ON NHs (owned by Central Care Corp.)

• results?

Answer 89

Central Care Corp. fired 1/2 dozen employees

Government increased # of unnannounced inspections

RESULT: made little improvement b/c politicians have ignored resports of their own inspectors

Question 90

Other areas of HC being privatized

(other than elder care)

Answer 90

• supporting/ancillary services
  
  • lab services
• CAT scans & MRIs

Question 91

Privatization of Ancillary Services

→ MDS

• origin
  *

Answer 91

• lab services in particular

largest CDN private HC corp. = MDS:

• founded in Toronto in 1969 → originally Medical Data Sciences ltd.
• By 1986 → assets = 4 million & annual income = over 800 million
• fast growth due to buying small independant labs owned by docs
  
  • labs continued to recieve funding from gov
• more money for MDS = less for public hospital labs → forced hospitals to turn to MDS/private labs
• 80s → MDS bought more labs & kept raising prices
• 1990 → per capita lab services tripled in price (most expensive)
• 90s → MDS spread across Canada
  
  • expanded into pharm & forming partnerships w/ hospitals
• MDS revenues = over a billion/year & growing

Question 92

Privatization of CAT Scans & MRIs

Answer 92

more private diagnostic units appearing (provide CAT scans & MRIs)

ON authorized in 2003

• Fed Liberals promised to cancel contracts & make illegal but didnt once in power

Private MRIs spread across Canada →1st in ON, then: AB, BC, QB & SK (Brad Wall)

Question 93

Why does privatization continue to expand in Canada despite:

• facts/figures showing private HC provides less services for higher price
• Protests

(2) reasons

Answer 93

(1) Buying Politicians

• Legalized Bribery (campaign contributions & well-paying jobs)
• Illegal Bribery (kickbacks from corps → gives multi-million$ contract & money finds its way back to politician through swiss bank account)

(2) Growing Influence of Corporations & US Government

Question 94

(2) Growing Influence of US Corporations & Government

on privatization of HC

Answer 94

• both have worked to speed up Americanization of CDN market, society & HC

→ primarily accomplished through intro of Free Trade

Began in 1989 → Mulroney & Reagan introduce Canada-US FTA

1994 → expanded to include Mexico → renamed NAFTA

• involved unfair subsidies to business
  
  • result: 1991 → eliminated UI program & changed to EI
    
    • cutbacks in benefits & eligibility
    • used to pay off gov debt

Question 95

FTA → Unfair Subsidies

• debate/concerns
  
  • design of FTA
    *

Answer 95

late 80s → debate over free trade

• concerns raised about Americanization of Canada (especially social programs) → Mulroney dismissed concerns saying FTA doesnt mention social programs (example of how politicians lie by telling part of truth)

FTA designed to eliminate unfair subsidies to even playing field for businesses

Question 96

FTA → unfair subsidies

• after signing FTA
• results

Answer 96

US government argues unfair subsidies = anything CDN gov spends money on that US gov doesn’t

→ 1st thing US did after signing FTA → claimed our social programs constitute unfair subsidies to business

• complained about UI program
  
  • CDN fed gov contributed to IU fund but US gov didn’t

Within months: cutback on fed contributions to CDN UI fund

1991 → eliminated UI altogether & changed to EI

• fed gov stopped contributing but continued to manage
  
  • introduced cutbacks in benefits & eligibility
    
    • → 1998 - only 1/3 qualified
  • used fund to pay off debt

Question 97

Results of change of UI → EI

Answer 97

federal government stopped contributing funds but continued to manage fund

1) introduced cutbacks in benefits & eligibility
* by 1998 → only 1 in 3 unemployed CDNs qualified for EI
2) Fed Gov used fund as personal piggybank → to pay off gov debt

2008 → Supreme Court of Canada ruled gov had stolen over 57 mill from EI fund

• didn’t order gov to repay money
• set up crown corporation to manage EI

Unemployment program only 1 of many social programs brought down to US level

Question 98

Free Trade

• what did it do?

Answer 98

• eliminated:

government tariffs on imports

all kinds of regulations on corp activity

• government restricins on cross-border takeovers

→allows corps in Canada or US to buy up smaller businesses on opposite side of border

• previously existing 25% ceiling on foreign ownership of insurance industries

Question 99

Result of Free Trade

Answer 99

cross-border integration of North America’s insurance industry

Large US corps (AETNA, PRUDENTIAL & MUTUAL OF OMAHA) began to buy small CDN insurance companies

CDN insurance companies (Great West) increased policies in US & Mexico

1995 → 1/2 of revenue of CDN insurance industry generated abroad

CDN life & health insurance → assets over 165 billion, revenues over 45 billion/year

concentrated wealth → insurance industry became oligopoly

• over 140 insurance companies in CDN → 3 control ~ 1/2 of market
• top 10 raked in 75% of insurance premiums

bottom 84% have less than 1% of market share

Question 100

What happens with an Oligopoly?

Answer 100

Collusion (illegal) →CEOs of richest corps make agreement to not actually compete but charge same price, wages & move industry in same general direction

• price-fixing/price-gouging

- rise in cost of insurance premiums

• LI premiums bring in 2x what insurance companies pay in benefits → 100% profit margin

Question 101

What does this cross-border integration of North America’s insurance industry mean to public insurance & medicare?

Answer 101

- whether insurance industry is dominated by US or Canadian corporations makes little difference to consumer

all act to increase private insurance sector & pushing back/eventually eliminating public insurance → like Medicare

Medicare under attack by richest/most powerful organizations (NA’s Insurance companies)

Question 102

Result of Free Trade (general)

Answer 102

cross-border integration of North America’s insurance industry

concentrated wealth

• stripping away laws that protect state-run insurance from takeover

Question 103

Government passed & continues to support FTA although it has allowed corps to takeover more & undermine HC & social programs

WHY?

Answer 103

Brian Mulroney → originally against free trade

• 1983 campaign speech “FT like sleeping with elephant” → ANTI FT platform

Question 104

Reasons behind creeping Privatization of Canada’s HC system (5)

Answer 104

1. Bribing of politicians→ money talks
2. Influence of the USA
3. growing influx of private sector in HC administration in 1980s
4. private sector either coincidentally & deliberately creates problems for public sector
5. private corporations lie to increase public support of privatization

Question 105

growing influx of private sector in HC administration in 1980s

Answer 105

strong ideological commitment to private sector

belief that private sector always does it things better than gov

even when statistics show otherwise (more expensive less efficient)

ideological belief is reinforced by self-interest

not same life long commitment that doctors have

financial incentive to promote privatization

Question 106

private sector either coincidentally & deliberately creates problems for public sector

Answer 106

growing waiting lists are becuase doctors bumping Medicare patients to end of line in favor of higher+paying privae patients

• More often, patients given choice to wait months/years or pay privately & get it right away
• vicious cycle → ppl pay for private, pushes back public patients, increases privatization

Propaganda Campaign in 80s

by mid90s, HC accounted for 1/3 of prov budgets

Privatization has led to rising prices in areas like outsourcing, diagnostics, pharmaceuticals & insurance

Question 107

Problems caused by private sector: Cherry-picking/Cream-skimming

Answer 107

private sector tends to siphon off least sick patients to private institutions

leaving difficult, chronic, low income, long-term cases to public sector

→maximizes private sector profits & puts more pressure on public sector

Question 108

Biggest problem private sector created for public HC

• results?

Answer 108

constant pressure on government to cutback on social programs

since 1970s, cutbacks justifed by claims that social programs are reason behind gov debt

• Canada has trillion dollar economy (1 of biggest in world)
• corp subsidies & tax breaks are real reason behind gov debt

Question 109

“Death of a thousand cuts”

Answer 109

When Medicare installed non-profit HC system, if gov had given reasonable budget increases to HC, Medicare would provide good HC for all Canadians

• instead, more cutbacks → put pressure on every aspect of HC system

made it impossible for Medicare to operate effectively through “death of a thousand cuts” - each cutback isnt crippling, but together have undermined Medicare

Question 110

5) Private corporations lie to gain public support of privatization
- what are some of the lies told? (4)

Answer 110

claims that:

1) have to choose between equality & efficiency
2) private sector provides cheaper services
3) private sector increases consumer choice
4) private sector provides lower administrative costs b/c government is over-bureaucratized

Question 111

claims that:

1) have to choose between equality & efficiency

Answer 111

efficiency in HC → defined as providing cheapest care for greatest # of ppl

if this is true, then equality is essential component of efficiency

equal & universal access is only way to provide efficient HC to whole population

ALSO, disproven by stats:

• non-profit CDN hospitals offer 3x more care per dollar than US for-profit hospitals
• non-profit workers comp boards offer 8-10x as many benefits per premium dollar than US private workers comp

Question 112

claim that:

2) private sector provides cheaper services

Answer 112

FALSE → since pharmaceuticals & diagnostics increasingly privatized in 80s, prices doubled in 90s

• for-profit always more expensive b/c includes profit margin (have to raise prices to make profit)

non-profit HMOs gave back 90% of income in providing services vs. 70% of income by for-profit HMOs

US has HC costs spiraling out of control

• 1991 → HC costs over 662 billion (more than any country)
• late 90s → US spending almost trillion (1/3 of total world HC spending)
  
  • compared to Europe (25%), Asia (12%), Canada (2.5%)
• 2005 → 2 trillion spent on HC (50% more per person than any country)
  
  • WHO ranked US HC 37th in world (last among industrialized countries)

Question 113

3) private sector increases consumer choice

Answer 113

OPPOSITE OF TRUTH

• actually limits costumer choice by only allowing them to go to certain lists of doctors & go for certain services on list
• private insurance companies worked together w/ employers & selected docs to reduce sick time & health services recieved

Question 115

4) private sector provides lower administrative costs b/c government is over-bureaucratized

Answer 115

TRUE → gov HC bureaucracy is larger that those of private HC corps

→ Canadian HC system has almost as many admins as doctors

• b/c gov bureaucracy (Medicare) covers every single Canadian citizen
• private HC companies only cover select minority (their patients)

Costs examined on per person basis by Michael Rachlis showed Canada’s HC system admin costs = 1/4 of US HC admin costs

Harvard Med School study in 2003 found per capita HC costs were:

• $1,059 in US vs $307 in Canada

Question 116

Reasons private HC insurance is more expensive (per capita HC costs) (3)

Answer 116

private insurance companies duplicate records
have to hire insurance claim adjusters

• job to find loopholes so that people get as little benefits as possible

have to hire expensive lawyers to fight endless lawsuits

Question 117

Canadian Media & Privatization of HC

Answer 117

most people don’t know facts that show private sector claims about private HC are lies

• just know what media tells them

Media = set of corps with right-wing pro-business bias

• Constantly telling Canadians that public HC is sick & privatization is cure

propaganda campaign has had limited results

→ opinion polls show majority of Canadians support Medicare over private HC

→ but has allowed for greater public acceptance of private HC

While not many supports complete privatization of HC, more ppl accepting privatization nibbling at edges

If Media campaign since 80s continues, more creeping privatization in HC system

Question 118

For many years → debate between left & right wing in politics

concerning?

stances?

Answer 118

concerning respective roles of state & capital in our economy

right-wing → for **privatizaton **

• says capital does things better

left-wing →for nationalization

• says state does things better

Question 119

Capital vs. State

(

Answer 119

neither side is entirely right or wrong

• state & corporate capital = 2 most central & powerful institutions in modern society
• each has pros & cons → need to use both where each is strongest

→ state & capital should complement each other not compete

• to establish this type of system - need to follow natural division of goods & services

→ Capital best at providing goods → cure

→ State best at providing services → care

Question 120

Pros & Cons of Private Sector (CAPITAL)

(2 each)

Answer 120

PRO #1: good at creating new technology

PRO #2: excels in mass production

CON #1: problem of standardization

CON #2: act to increase social inequality

Question 121

PRO #1: good at creating new technology

(5)

Answer 121

recipe for tech innovation → businesses compete to intro new gadgets to make profit

capital private business responsible for new technology in last 200 years

new medical tech is mostly from private sector

• has always taken lead in inventing new lab equip, hosp machinery & pharm etc.
• has & will continue to revolutionize our tech in all areas in future

Question 122

PRO #2: excels in mass production

Answer 122

(invents technology & the technology to invent it ) → production & consumption goods

→ can produce products by the millions

→ always finds ways to make goods as cheaply/efficiently/quickly as possible

private sector best equipped to supply HC with necessary goods on mass scale

Question 123

CON #1: problem of standardization

Answer 123

mass production works b/c machines can be standardized & broken done into simple interchangeable parts

→ can replace broken part & carry on - same machine has identical parts

→ People ARE NOT machines →can’t be standardized

trying to standardize people & medical procedures causes problems

• seen private corps enter HC field & try to intro factory methods (TQM, LEAN)
• especially amount of time for procedure
  
  • can’t standardize b/c ppl’s health vary along diff dimensions
  • need customized patient care (fitted to each individual)

private sector HC has financial incentive to standardize HC to cheapest/lowest level

Question 124

Problem: if you introduce private capital into HC - financial incentive to standardize HC to cheapest/lowest level of care

ELABORATE

Answer 124

Private sector tries to standardize treatment appropriate for healthiest part of pop’n

(young, white, male, middle-class adults with no previous history of serious health problems)

most demographic groups don’t fit into this category → require more care
but providing HC services above minimum standard eats into profit margin

→ tries to cherry-pick

This is why capital will never provide adequate HC to society

Only state can ensure adequate HC is provided to all segments of society

Question 125

CON #2: acts to increase social inequality

Answer 125

over time, natural tendency for wealth to be concentrated

state has power to counteract tendency

after WW2 to mid70s → Western gov did counteract tendency toward growing inequality by raising taxes on corps & used money to create welfare state

• inequality decreased across western world

late-70s → right-wing came into power & reversed policy of previous 30 years

• more tax cuts for corps & social program cutbacks for rest of society
• this has been main gov policy since
• state has abdicated its power & allowed corps to do whatever they want
• massive growth in equality in terms of income, wealth & HEALTH

Question 126

Who should provide non-essential small scale services?

Answer 126

small family businesses (not state or capital)

• hair dressers, restaurants & corner stores

Question 127

How State can compliment Capital

Answer 127

Capital→ new technology & mass production
- provides goods

State → provideds large services & 3 pillars of welfare state

• resolve standardization problem through laws & regulations
• establish universal criteria for HC & min standards

Question 128

Non-profit State

PROS?

Answer 128

1 → can resolve standardization problem (provide customized care)

• establish universal HC criteria & hold HC institutions to certain standard

• regulations & laws

Question 129

Only non-profit state can…

Answer 129

deliver large # of highly trained professionals in nation-wide organization accessible to all citizens

• allocate resources (including medical) on basis of need not income
• guarantee essential services are provided on basis of universality not inequality
• provide care & not just cures

Question 130

Distinction between care & care

Answer 130

comes down to beds

without beds, HC facility is just dispensing cures

with beds, HC facility becomes total institution that has total control over inmates & responsibility to care for them 24/7

Question 131

The example of increasing privatization of elder care in Ontario shows…

Answer 131

what private HC looks like with long-term beds

shows what privatized long-term HC facilities would be like

Question 132

Long-term Care facilities

1) private capital

vs.

2) public non-profit state

Answer 132

1) able to take more long-term & innovative approach
- cut long-term costs by providing more services
- look to keep ppl out of institutions by providing programs allowing elderly to stay home
2) incentive to cut costs to increase profit
- will have (-) impacts on residents
- treats residents like objects that make them money

Question 133

Solving problem of standardization

Answer 133

by passing laws to establish universal criteria of HC

holding HC institutions to certain min. standard of care

provide HC professionals with freedom & resources to customize care

• regulate market & actions of corporations

Question 134

Why does state need to regulate market & actions of corporations?

Answer 134

otherwise, harmful consequences

• process of providing technology not concerned about human suffering as side-effect
• work-related accidents →1000 per year
• mostly due to failure of corps to introduce proper safety measures

Question 135

State had established safety principles & regulations for capital to obey until period of deregulation

RESULT? (pharm industry)

Answer 135

1994 - review time = 38 months

1997 - reduced to 18 months (due to pressure by corps)

• more drugs on market with no idea of long-term side effects