June 6, 2005

Private Clinics and the Threat to Medicare

If information in the Vancouver Sun's June 3, 2005 special on private health clinics is correct, 50,000 surgeries per year are performed in BC's private clinics. The Ministry of Health Services website claims that half of all surgeries in the province are not waitlisted; it provides a graph which shows that 423,000 surgeries were performed in 2003-04 (fiscal year April 1, 2003, through March 31, 2004). According to the Vancouver Sun, most of the private clinic surgeries are for the Workers' Compensation Board (WCB), the RCMP, the Canadian Forces, and federal prison inmates, but the article contends that 5 to 10 percent of the total "are paid by patients who don't want to wait months or years for their operations in public hospitals." If that is correct, it means that between 2,500 and 5,000 surgeries per year, or about 1% of all surgeries that should be covered by the Medical Services Plan (MSP), are being done in private surgery centres.

Public health insurance, "Medicare", eliminated private health insurance for hospitals and doctors but it never replaced other public payment schemes, including WCB, and various federal plans. From day one of Medicare there was a multi-tiered system although all the tiers involved public payment. In BC things came unraveled in the 1990s when private surgery centres were established and WCB contracted with some of the centres so their clients would not have to endure the longer public waitlists. Soon rumours began to spread that some patients who weren't covered by WCB or the like were paying out of pocket to get quicker treatment. The Vancouver Sun story recounted the case of a woman who paid $6,000 to have sinus surgery. With the help of the BC Nurses Union she is now talking legal action to recover her payment, arguing that it violated the Medicare Protection Act. While that case winds its way through the courts, the clinics are responding with waivers that patients sign saying that their surgeries are not medically necessary "in the time frame requested". The legal action is unusual; paying to jump the queue is not. For years some patients paid to have private cataract surgeries; the excuse used was that an associated medically unnecessary procedure was being performed and it just happened to be convenient to also fix the cataract at the same time.

If someone can afford it, what's wrong with paying to have a medical procedure quicker than the public system can deliver it? Health unions are accused of protesting so as to protect union jobs, but health unions have shown that they can organize workers in private clinics. They have yet to organize the private surgery centres, but they have organized private laboratories, and the pressure of union wages and benefits helps set the standard in non-union clinics. "Lefties" are accused of objecting for fear of losing monopolistic "socialized medicine". If the debate is restricted to a union vs. non-union or left vs. right issue, Medicare will fundamentally change before most people understand the real issues.

The spread of private medical clinics and surgery centres breaks the government's monopoly; it weakens the government's ability to control the supply and significantly influence the price paid for health care. That should concern all taxpayers at the same time that it delights those in pain who are fed-up with waits. Politically it is much more difficult to talk about maintaining a monopoly for purposes of cost control than it is to rant against the evils of US style health care. For most people there is another benefit from the government's monopoly in the form of access to health care. Equal access regardless of the size of one's wallet is one of the fundamental principles of Medicare, but access has never been equal between different regions. When the WCB started using private clinics to queue jump, it eliminated equal access between those who were hurt on the job and those who were hurt at home and it provided the financial base for the growth of the clinics. It also opened the door to those who wanted to use the clinics because they could afford to. So what harm is done by that "erosion" of Medicare? The clinics wouldn't exist if it weren't for the payments that are separate from MSP. It is not as if that capacity is taken from the public system and would be restored to the public system with the demise of the clinics because the amount of available service in the public system depends on what the government decides to ration. Surgeons cannot get as much time in operating rooms as they would like, meaning their capacity is being wasted. The newly proposed boutique clinics, with their initiation and annual fees, are a different story. They will reduce the supply of general practitioners in the public system if a substantial number come into existence, but with $2,300 annual fees market forces are likely to limit the number that can survive.

As long as the number of patients served by the private clinics remains small, the greatest problem they pose is probably nothing more than a political inconvenience for the government as it is blamed for allowing a multi-tiered system which permits queue jumping for medically necessary services; however, those who receive quicker service may be grateful for a hypocritical blind eye. As the proportion of the population served by such clinics grows, they could weaken the ability of the government to negotiate with physicians since the doctors will have alternatives other than leaving the province. The greatest danger posed by the clinics is to the general public who may find that government is slower to fix public health care because those who are really anxious have a private alternative. The growth of private clinics may work as an escape valve for political pressure.

The growth of private clinics could become explosive if private health insurance was allowed to cover their services. That could change access from those who can afford it, or are willing to go into debt to get it, to those who can negotiate insurance coverage. A Quebec case, Jacques Chaoulli and Georges Zeliotis v. The Attorney General of Quebec and the Attorney General of Canada. was heard by the Supreme Court of Canada on June 8, 2004. The Court's decision has yet to be delivered. If the Court sides with Dr. Chaoulli, private insurance coverage would be allowed for costs related to private health and hospital services. That would be the next great leap forward for the growth of private clinics, and for turning Medicare into a second rate program for those who cannot get private insurance.