Privatization of Healthcare Flashcards
1
Q
Privatization of HC in Canada
- prevalence & current situation
A
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 **
2
Q
Privatization of HC - all over the world
A
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
3
Q
As Sociologists, How is this issue of Private vs. Public HC become settled?
A
by looking at **historical records of both **& make comparisons
4
Q
How can Sociologists examine Canada in terms of private vs. public HC?
A
**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
5
Q
How is the example of the USA & its private HC system important to consider when examining Canada’s HC system?
A
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
6
Q
Private vs. Public Healthcare
- Conclusions
- impact on health of Americans
- rich vs. poor
- results of private HC
A
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 *
7
Q
Healthcare & Private Sector
A
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 *
8
Q
Roy Romanow - Royal Commission (2003)
A
- 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
9
Q
**Healthcare Systems: **
USA vs. Canada
A
USA - never had comprehensive state-run medical care like **Canada **
**- **always more decentralized & more room for private HC
10
Q
Brief History of Healthcare in USA
- After WW2 & Prior to the 1980s
A
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)
11
Q
History of Healthcare in the USA
- 1980s onwards
A
- 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
12
Q
What problem did private healthcare insurance present for corporations? What study corroborates this?
A
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 **
13
Q
Corporations & high costs of private health insurance
- results
A
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
14
Q
What was the result of the Managed Care Arrangment in 1988
A
→ 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)
15
Q
How did the USA’s Healthcare System get privatized so quickly?
A
**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
16
Q
Managed Care Arrangements
In order to lower & stabilize corporates health insurance rates, what was the tradeoff?
A
private insurance companies raised insurance rates for individuals/small companies
→ late 80s: some rates rose by up to 400% in a few years
17
Q
At the same time that Insurance Companies increased rates (late 80s → rose by up to 400%), what did the Federal Government do?
A
Introduced cutbacks to Medicare & Medicare
18
Q
What was the result of Federal cutbacks in tandem with an increase in private insurance rates?
- Statistics (4)
- Result?
A
** 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
19
Q
What evidence is there that the increase in # of uninsured & under-insured led to a major decline in American’s health?
A
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)
20
Q
What tactics did Private Insurance Companies use to keep profits high?
(6 main, 3 subpoints)
A
- **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
21
Q
Tactic to keep profits high/cut costs: Cutbacks on services
A
- deductibles raised
- some specialized treatments removed from standard benefits package
- co-payment fees (extra-billing)→ introduced by more insurance benefit packages
22
Q
Results of Cutbacks on Services
A
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)
23
Q
Tactic to keep profits high/cut costs: Restricting Consumer Choices
A
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
24
Q
What did private insurance companies want from corporate-approved doctors?
A
→ 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
25
Tactic to reduce costs/increase profits: **Flat Rate**
Private insurance companies introduced new system of paying doctors **flat rate per patient**
## Footnote
- gave doctors **financial incentive** to spend **less time** with each patient so they could **see more patients** & **make more** money
26
When did **HMO's total cost drop**? By how much?
How was this portrayed in the media?
**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
27
Tactic: **Replacing Trained Nurses**
Result?
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)*
28
What studies show that **Privatization of HC** has caused a decline in American's health?
## Footnote
*(especially regarding **replacing RN's** with less-skilled cheaper staff)*
**US Institute of Medicine** Study - **1999**
**Chicago Tribune Newspaper** Partial Study - **2000**
**Harvard Medical School** Study - **2006**
29
**US Institute of Medicine** Study
* year?
* findings?
**1999**
## Footnote
estimated between **44-98k** Americans were killed by **medical mistakes** each year
30
**Chicago Tribune Newspaper** Partial Study
* year?
* findings?
**2000**
## Footnote
found **2,000 dead** & **10,000** **injured** by medical mistakes (of RN's)
31
**Statistics** on # of **for-profit hospitals **
* year?
* percentage?
By **1998**:
## Footnote
**15%** of USA’s **5,200 hospitals** had been bought by corporations & converted to **for-profit status**
32
**Columbia/HCA**
* history
* assets/profits
**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
33
How have these new **for-profit hospitals** prospered? Result?
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**
34
**Statistics** showing the unequitable distribution of consumption of HC services
* year?
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%**
35
Tactic to cut costs: **Outsourcing Hospital Support Services to Private Companies**
- hospital services consolidated w/ several hospitals in region sharing costs for **administration, diagnostic** & **food services**
## Footnote
*→ 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**
36
Privatization & Americans Reaction
* Result?
- 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**
37
What did **opinion polls** show about **Americans** & **Canadians** views on their HC system?
**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
38
How is it that privatization is still occuring despite the majority of Americans/Canadians being opposed to it?
even though Canada & US are supposedly **democracies**, power of **billions of corporate dollars** *speaks louder* than **voice of ** **majority** of **pop'n**
39
Colleen Fuller
**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%)
40
How has **Obama** impacted Healthcare in the USA?
- 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)*
41
Effect of **Obamacare** on US HC
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
42
**Obamacare**
* Expected results
→ 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
43
Britain's HC system
**National Health Service (NHS)**
## Footnote
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**
44
Results of privatization of NHS
* 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**
## Footnote
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**
45
Dr.Allyson Pollock
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*"
46
Private Finance Initiative (PFI)
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
47
Privatization of Canadian HC
* problems for corporations?
* begins in US where big corporations 1st emerged
* since US is under their control, will inevitably target Canada next
## Footnote
**Problem** is many Canadians oppose privatization
* have **"entitlement mentality"**
* 'ridiculous' idea that HC should be a right which every Canadian is entitled to
48
How have corporations tried to change Canadians attitudes about private HC?
How did the Canadian government justify cutbacks?
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**
*
49
Age of Cutbacks
**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
50
Consequence of **Cutbacks** in Social programs
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**
51
What argument did the government make to justify massive HC cutbacks?
Was this argument accepted?
Argument that **growing cost** of **social programs** (like HC) was responsible for government debt
→ **accepted** & **repeated** over & over by CDN media
52
Was the **claim** that **government debt** was largely responsible for growing cost of social programs true or false?
* evidence
- **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)*
53
Why is the majority of Government debt attributable to corporations?
**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**
54
**(2) Major reasons** for growth of HC costs in Canada
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**
55
Contribution of **Prescription Drugs** to Growth of HC Costs in Canada
* political decisions
* Result?
**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)
56
Results of **Bill C-22** & **C-91**
* evidence & statistics
**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 public****ly insured drug plans**
* by **1996:** Only **43% of CDN population** eligible for drug plan coverage
* **deductibles** rising steadily
57
Largest factor of Increased HC Costs since **1980s**
**rising drug prices** imposed by **foreign corporations** = single largest factor
**2005**: **CIHI** published report saying rising drug prices "**key escalator"** pushing up HC costs
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?
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**
59
Impact of findings provided by the **Fraser Institute** & other institutes on general public?
What other **attempts** have been made to capture **public support**?
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
60
Problem with P3 in Canada & setting up clinics & private services alongside public clinics & HC services
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
61
**Major entry point** for private sector into HC
* Example in Alberta
**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
62
Change in **Worker's Compensation**
* before vs. after **90s**
**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**
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?
* **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"*
64
What similarities do Canada & US share in regards to privatization of HC?
* 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
*
65
Summary of
* corporate **tax cuts**
* political decisions regarding **prescription drugs**
* other **entry points** for private sector
→ **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
66
In course of the **90s:** hospital care **increasingly embraced** US model of HC
* **Evidence**? (timeline)
**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**)
67
**1991** → **Winnipeg 7 Oaks General Hospital** adopted US principle of **Managed Care**
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**
68
**1997** → **Health Resource Group** opened Canada's **1st for-profit hospital** in **Calgary**
**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*)
69
**2000** → **Ralph Klein** introduced **Bill 11 ** in AB → private clinics allowed minor surgeries & over-night stay
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
70
**2004** → AB gov contract with HRG
gave **6 million** **$ contrac**t to **HRG** to perform **~500 surgeries**
even though HRG charged **10% more** than **public** hospitals per **procedure**
71
**2005** → Canada's 1st primary care clinic opened in Vancouver
* 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)*
72
After major expansion in private clinics in **early 2000s**
**→ problems** arised in **late 2000s**
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$**
73
**Strategic Partnering**
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*
74
Result of Strategic Partnering of **Provincial Governments & Private HC corporations**
- statistics/evidence
**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
75
Winnipeg - Privatization of HC
**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**
76
Ontario → quiet privatization
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**
77
History of **Elder Care** in **Ontario**
**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**%
78
Change in Elder Care in **1950s/60s/70s**
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
79
**Extendicare**
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**)
80
How did large corporate NH chains influence politicians?
* rewarded politician when they retire → given high-paying job
* contributed to election campaign fund
*
81
Why did corporations give politicians well-paying job after they retired if they gave corporations contracts?
1) reward
2) b/c former politicians usually keep close ties with current politicians
82
Contribution to Election Campaign Fund
* Example
* Result
**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%**
83
**Public's Response** to growing privatization of elder care
**1980s →** protests in ON against growing privatization of elder care
**friends & relatives** organized into **Lobbying groups**
84
Lobbying Groups & those against privatization of elder care
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*
85
Lobbying groups & Others against Privatization
- **reports**
**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"***
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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
**slowed down** privatization
**1987 →** Nursing Homes Act amended
* had to submit proper financial statements & accept resident bill of rights
87
Criticisms of **1987** - amendments to **Nursing Home Act**
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**
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
**2004 → CTV's W-5** aired footage of **abuse** & **theft** in **2** ON NHs owned by Central Care corp.
89
Response to **CTV's W-5** footage of **abuse** & **theft** in 2 ON NHs (owned by **Central Care Corp.)**
* **results?**
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
90
Other areas of HC being privatized
(other than **elder care**)
* supporting/**ancillary** services
* **lab services**
* **CAT scans & MRIs**
91
Privatization of **Ancillary** Services
→ MDS
* origin
*
- **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
92
Privatization of **CAT Scans & MRIs**
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)**
93
Why does privatization continue to expand in Canada despite:
* **facts/figures** showing private HC provides **less services** for **higher price**
* **Protests**
(2) reasons
**(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**
94
**(2) Growing Influence of US Corporations & Government**
on privatization of HC
- 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**
95
**FTA** → Unfair Subsidies
* debate/concerns
* design of FTA
*
**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
96
FTA → **unfair subsidies**
* after signing FTA
* results
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**
97
Results of change of **UI → EI**
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 p**ay 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**
98
**Free Trade**
- what did it do?
- **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
99
Result of **Free Trade**
**cross-border integration of North America’s insurance industry**
## Footnote
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**
100
What happens with an Oligopoly?
**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**
101
What does this cross-border integration of North America’s insurance industry mean to public insurance & medicare?
*- whether insurance industry is dominated by US or Canadian corporations makes little difference to consumer*
all act to **increase private insurance secto**r & **pushing back/eventually eliminating** public insurance → like **Medicare**
Medicare under **attack** by richest/most powerful organizations (NA's Insurance companies)
102
Result of Free Trade (**general**)
cross-border integration of North America’s insurance industry
concentrated wealth
- stripping away laws that protect state-run insurance from takeover
103
Government passed & continues to support FTA although it has allowed corps to takeover more & undermine HC & social programs
WHY?
Brian Mulroney → originally against free trade
* **1983** campaign speech "FT like sleeping with elephant" → ANTI FT platform
104
Reasons behind creeping Privatization of Canada's HC system (5)
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
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growing influx of private sector in HC administration in **1980s**
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
106
private sector either coincidentally & deliberately creates problems for public sector
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
107
Problems caused by private sector: **Cherry-picking/Cream-skimming**
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**
108
Biggest problem private sector created for public HC
- results?
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
109
"Death of a thousand cuts"
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 o**perate effectively** through ***“death of a thousand cuts”*** - each cutback isnt crippling, but together have undermined Medicare
110
5) Private corporations **lie** to gain public support of privatization
- what are some of the lies told? (4)
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
111
claims that:
1) have to choose between **equality** & **efficiency**
**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
112
claim that:
2) private sector provides **cheaper** services
**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)
113
3) private sector **increases consumer choice**
**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**
114
115
4) private sector provides **lower administrative costs** b/c government is over-bureaucratized
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**
116
Reasons private HC insurance is more expensive (per capita HC costs) (3)
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**
117
Canadian Media & Privatization of HC
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
118
For many years → debate between left & right wing in politics
**concerning?**
stances?
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
119
**Capita**l vs. **State**
## Footnote
(
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**
120
**Pros** & **Cons** of Private Sector (CAPITAL)
(2 each)
**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**
121
**PRO #1:** good at creating new technology
(5)
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
122
**PRO #2**: excels in mass production
(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**
123
**CON #1:** problem of **standardization**
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**
124
**Problem**: if you introduce private capital into HC - financial incentive to standardize HC to cheapest/lowest level of care
ELABORATE
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**
125
**CON #2:** acts to increase **social inequality**
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**
126
Who should provide non-essential small scale services?
small family businesses (not state or capital)
- hair dressers, restaurants & corner stores
127
How State can compliment Capital
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
128
Non-profit State
PROS?
#1 → can **resolve standardization problem** (provide customized care)
- establish universal HC criteria & hold HC institutions to certain standard
#2 → **reduce social inequity** through welfare state & providing **services**
- regulations & laws
129
Only non-profit state can...
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
130
Distinction between care & care
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
131
The example of increasing privatization of elder care in Ontario shows...
what private HC looks like with long-term beds
shows what privatized long-term HC facilities would be like
132
Long-term Care facilities
1) **private capital**
vs.
2) **public non-profit state**
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
133
Solving problem of standardization
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
134
Why does state need to regulate market & actions of corporations?
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
135
State had established safety principles & regulations for capital to obey until **period of deregulation**
RESULT? (pharm industry)
**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
136
