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Medical Reform MEDICAL REFORM Newsletter of the Medical Reform Group Issue 131 Volume 24, Number 2 Fall, 2004 YOUR MONEY AND YOUR LIFE: THE CONSEQUENCES OF INVESTOR OWNED PRIVATE FOR-PROFIT HEALTH CARE DELIVERY P.J. Devereaux hen discussing our health care Colombia, and the University at Buffalo care at private not-for-profit hospitals.1 system it is important to have come together to undertake research Our findings suggested if we were to Wdistinguish between funding to directly inform this debate. Our goal convert our Canadian hospitals to (who pays for our health care) and is to move the debate away from investor-owned private for-profit delivery (who owns and runs our health ideology and make it evidence-based. institutions, we would incur more than care facilities). Currently, hospital services In a previous edition of the Newsletter 2100 additional deaths a year in Canada. in Canada are publicly funded– we pay of the Medical Reform Group (Issue This number of deaths is in the range of through our taxes. In terms of delivery, 124, volume 22, Number 3, Winter, how many Canadians die each year from although commonly referred to as public 2003) I reported the results of our first colorectal cancer, motor vehicle accidents, institutions, Canadian hospitals are almost two studies that were published in the or suicide. all private not-for-profit institutions Canadian Medical Association Journal Our second study included data on owned and operated by communities, (CMAJ) and the Journal of the American more that 500,000 patients followed for religious organizations, and regional Medical Association (JAMA). a year and demonstrated once again health authorities. Our first study included data on higher risk adjusted death rates among The debate concerning for-profit more than 38 million patients and patients receiving care at investor-owned versus not-for-profit provision centers demonstrated higher risk adjusted death private for-profit dialysis facilities on delivery: whether we should introduce rates among patients receiving care at compared to patients receiving care at investor-owned private for-profit health investor-owned private for-profit private not-for-profit dialysis facilities.2 care facilities into our dominantly private hospitals compared to patients receiving Our study showed that if American not-for profit health care delivery system. patients received care in private not-for- Advocates of investor-owned private INSIDE profit dialysis facilities instead of for- for-profit health care delivery argue that profit facilities, approximately 2,500 Releases................................................3,4 the profit motive optimizes care and fewer patients would die each year. minimizes costs. However, some fear Rachlis on Niagara Meeting...........4-6 Further if we were to convert our for-profit facilities are more likely to Waiting lists.............................................6 Canadian private not-for-profit dialysis respond to financial pressures by cutting Boutique Medicine...........................7-8 centres to investor-owned private for- the quality of care and charging more to profit centers, we could expect Pharmacare......................................8-10 maintain shareholder returns. These approximately 150 additional deaths each viewpoints have resulted in a heated Delisting..........................................11-12 year among Canadian patients receiving debate. Public Health & Women...........13-14 dialysis. A group of researchers, of which All our Children...........................15-16 Our first two studies clearly I am one, at McMaster University, the documented the negative health Cathy Crowe...........................16-17,19 University of Toronto, the University of consequences (i.e., increased death rates) Western Ontario, the University of Guyatt on Election............................18 Ottawa, the University of British (continued on page 2) Medical Reform Group, Box 40074, RPO Marlee Toronto, Ontario M6B 4K4 YOUR MONEY AND YOUR LIFE MedicalReform Medical Reform is the newsletter (continued) of the Medical Reform Group of Ontario. Subscriptions are included with member- ship, or may be purchased separately at at investor-owned private for-profit bias in selecting which studies to $50 per year. Arrangements to purchase multiple copies of individual newsletters compared to private not-for-profit include in our systematic review. We or of annual subscriptions at reduced inpatient and outpatient health care trained research staff to read through rates can be made. facilities. Uncertainty, however, remains all the articles and use a black marker Articles and letters on health-re- about the economic implications of these to obscure the results of the studies. lated issues are welcomed. Submissions forms of health care delivery. Studies Two reviewers then independently should be typed, or sent by e-mail to evaluating the economics of health care examined these articles with the results <[email protected]>. delivery usually evaluate costs, charges, blacked out and determined study Send correspondence to the Medi- cal Reform Group, Box 40074, RPO Marlee, or payments for care. eligibility. As a result of this process Toronto M6B 4K4. Telephone: (416) 787- From the perspective of a service we could not select studies to reach a 5246; Fax (416) 352-1454; e-mail: provider, costs represent how much the specific conclusion. <[email protected]>. provider paid to provide care, charges Ultimately eight studies Opinions expressed in Medical represent how much the provider billed including data on over 350,000 Reform are those of the writers, and not the payer, and payments represent how patients met eligibility and quality necessarily those of the Medical Reform Group. much the provider received for the care. criteria for our systematic review. Our In the context of publicly funded health results demonstrated that payment for Editorial committee this issue: Rosana care, the central policy question is how care was 19 per cent higher at the Pellizzari, Janet Maher. much government will pay for care investor-owned for-profit hospitals delivered by investor-owned private for- compared to the private not-for-profit The Medical Reform Group is an profit versus private not-for-profit hospitals. Canada currently spends organization of physicians, medical stu- dents, and others concerned with the providers. We therefore undertook a $120 billion annually on health care, health care system. The Medical Reform study to inform this issue and we have and hospital care accounts for 32 per Group was founded in 1979 on the basis recently published this study in the cent of overall expenditures. of the following principles: CMAJ.3 Therefore, if Canada switched to We used a study methodology investor-owned private for-profit 1. Health Care is a Right. called systematic review and meta-analysis hospitals the Canadian governments The universal access of every per- which synthesizes the results of existing would pay an extra $7.2 billion in son to high quality, appropriate health care must be guaranteed. The health care high quality studies that all address a single annual health care costs. system must be administered in a manner question, in this case: “is there a difference Given our findings of higher which precludes any monetary or other in payments for patient care received at payment for care at investor-owned deterrent to equal care. private for-profit compared to private private for-profit hospitals some may not-for-profit hospitals?” Using this ask why this occurs. Private for-profit 2. Health is political and social in na- study methodology we developed facilities have to generate profits to ture. Health care workers, including phy- explicit criteria for deciding whether a satisfy shareholders, pay high executive sicians, should seek out and recognize study was eligible; conducted a bonuses, and have high administrative the social, economic, occupational, and comprehensive search to identify all costs. Not-for-profit providers do not environmental causes of disease, and be relevant studies; applied eligibility criteria have investors and have lower directly involved in their eradication. to potentially eligible studies in an executive bonuses (typically 20 per unbiased manner; examined the quality cent lower), and administrative costs 3. The institutions of the health system must be changed. of the eligible studies; and conducted a (typically 6 per cent lower). In an The health care system should be rigorous statistical analysis of the data editorial that accompanied our structured in a manner in which the from the studies that ultimately prove publication, Harvard researchers equally valuable contribution of all health eligible and of adequate quality. Woolhandler and Himmelstein care workers is recognized. Both the pub- Our extensive search identified provided an additional explanation: lic and health care workers should have a 7,500 medical articles. Over seven greed. direct say in resource allocation and in hundred of these passed an initial Another question that some determining the setting in which health care is provided. eligibility screen. We then undertook an may ask is whether the U.S. data from extremely important measure to eliminate (continued on page 3) 2 Medical Reform Volume 24, Number 2 - Fall, 2004 YOUR MONEY AND YOUR LIFE (continued) our systematic review is relevant to Third, if Canada moves to for-profit REFERENCES: Canada. There are three reasons why hospitals, the same large American
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