June 12, 2003

A Nail in Medicare's Coffin

Headlines like "Province set to privatize day surgeries" are bound to grab people's attention. It is understandable that Health Services Minister Collin Hansen went into damage control. Hansen's initial defense of the Coastal Health Authority's request for "expressions of interest" used the example of cataract surgeries in North Vancouver which are contracted to a private clinic. People on the North Shore know that the clinic mentioned by Hansen offers patients the opportunity to jump the queue and have an eye done by paying a fee of $1,700 - that's $1,700 per eye! They get around charges that their queue jumping violates any rules by saying that the procedure that is performed is for an uninsured service and it just so happens that it is efficient to also do the cataract while the uninsured service is performed. For those who don't shell out, they can also get their cataract done at the private clinic and paid for at public expense, but they have to wait months rather than days.

Will Hansen's contracting out of everything from tonsillectomies to ventral hernia repairs lead to similar queue jumping with substantial private payments? Hansen picked a bad example when he pointed at the eye clinic that has worked with Lions Gate Hospital.

Throughout the debate on such changes, reference is frequently made to the Canada Health Act, and it is sometimes mentioned in the context of someone violating the Act. The Canada Health Act is simply a set of very general rules (5 principles) that the federal government can use to withhold transfer payments to a province. It was originally put in place when BC had daily user fees in hospitals and Alberta and Ontario had growing problems with extra billing by physicians. It was used to pressure the provinces to stop those practices. Ever since there has been a reluctance by the federal government to use the Act to pressure any province to change how it delivers its particular version of Medicare. Don't hold your breath that the federal government will determine that Hansen's experiment with privatization contravenes the Act.

The Coastal Health Authority's document says that vendors will be judged according to the following criteria:

SELECTION CRITERIA CATEGORIES                                     POINT WEIGHT
1. Corporate Strength - Key attributes: Financial and Corporate
stability, depth & breadth of Company, strategic fit, culture,
vision, knowledge base, reputation, experience and synergy.             25 pts.

2. Business Practices & Model - Key attributes: Innovation,
accountability, diversity, financial & model viability, proactive,
relationships, service levels and offerings.                                         35 pts.

3. Product-Service and Quality - Key attributes: benchmarking,
best practices, quality driven, client focused and physical
capabilities.                                                                                    35 pts.

4. Value Adds - Key attributes                                                          5 pts.

What about the criterion of good public policy? Is it good public policy to do as was done with WCB and ICBC and allow payment for some patients to be used to build a base for the success of private surgery centres? Once those centres are established they would likely also cater to those who are desperate enough to pay privately.

What about costs? Hansen frequently points out that hospitals don't know the cost of any procedure. Unlike the US where a price is attached to every service, including the box of tissue at your bedside, Canadian hospitals have not done detailed cost accounting for each of the procedures that are now being considered for privatization. Hansen should know that there isn't any single correct method for doing such cost accounting. How much of the heating bill, the security bill and the bill for dozens of other overhead costs should be assigned to a particular outpatient surgery? There are hundreds of arbitrary formulas that can be used. Given the arbitrary nature of costing procedures within the hospital setting, how can an economic comparison be made on whether a hernia operation is cheaper at any particular hospital or at a "stand alone clinic"?

Through the people to whom he has delegated responsibility for most of his ministry, Hansen has taken the first step towards breaking one of the Campbell government's most important promises. Before the election they said they wanted to make private clinics redundant by improving the public system. After all, if the public system was functioning to everyone's satisfaction there would be no demand for private clinics. Now the gang that is breaking up BC Rail, BC Hydro and BC Ferries is about to break up one of the most important trusts that has been put in their hands - Medicare.