Waiting in the Wings! How For-Profit Health Corporations Are Planning to Cash-In on the Privatization of Medicare in Canada

Waiting in the Wings! How for-profit health corporations are planning to cash-in on the privatization of Medicare in Canada. by Darren Puscas with an introduction by Tony Clarke September 2002 Readers are encouraged to reproduce and circulate this publication. We encourage you to undertake direct action in your community. We must fight back or risk the irreparable loss of Canadian Medicare. page 1 Take action now - join the struggle to save Medicare. The Canadian public Medicare system is at serious risk. Many governments and corporations are Exposing pushing for a more and more privatized system, while others, including much of the public, want the Private Medicare to remain a publicly funded and administered right for all Canadians. The great Canadian Healthcare Healthcare debate is now well underway. Industry All across the country, the advocates for a public system of universal healthcare are dueling it out with those calling for greater privatization leading to a two-tiered healthcare system. The federal government’s commission on healthcare, chaired by former Saskatchewan Premier Roy Romanow, appears to have become the rallying point for the first camp while the Senate commission on healthcare, chaired by Senator Michael Kirby, has been the galvanizing center for much of the second camp. Yet, the federal government appears to have already abandoned the goal of a publicly delivered, universal healthcare system. Over the past quarter century, the 50/50 funding formula between the federal and provincial governments has been steadily eroding. The federal share dropped to 42 percent under the Trudeau government, then to 33 percent under the Mulroney government, and down to 23.5 percent under the Chrétien government, reaching as low as 10.5 percent at one point. The Private Sector Moves in on Canadian Healthcare Meanwhile, the private sector has been rapidly moving in to take over the slack. For example, every time a medical service is taken off the list covered by our public healthcare system, for-profit health companies are quick to add the service to their private insurance plans. Indeed, the for-profit healthcare industry sees Canada’s publicly funded system of Medicare as a lucrative 90 billion dollar annual market. Opening up the publicly funded system to privately delivered services provides for-profit healthcare corporations the opportunity to “Healthcare is no different from the cash-in. airline or ball bearing industry,” --- Rick Scott, former CEO of HCA, the So, just who are these corporations seeking to profit from the privatization of healthcare world’s largest for-profit hospital in Canada? Well, the for-profit healthcare industry that exists today has been largely built- corporation. Scott vowed to destroy up in the U.S. over the past few decades. In 1996, for example, the U.S. investment consulting every public hospital in North America. firm, Lehman Brothers, actually documented how the U.S. healthcare system was taken over by strategic maneuvers on the part of private insurance, hospital, pharmaceutical and medical product companies. During the 1970s and 1980s, reported Lehman Brothers, for-profit healthcare corporations gradually became “the gatekeepers of the health care dollar, … dictat[ing] the direction of healthcare spending” in the U.S. Today, the private healthcare industry is alive and well in the U.S. There, corporations provide the bulk of healthcare services — from insurance plans and pharmaceutical drugs to the operation of hospitals, homecare and long term care — on a for-profit basis (a for- profit model that has left 40 million without health insurance). What’s more, the leading corporations in each of the major healthcare sectors are now expanding their operations, eager to open up markets in other countries. Canada has been identified as a prime target for this corporate expansion. With the aid of several private Canadian companies, the U.S. corporate takeover of healthcare services is already underway in this country. But, again, who are these corporate players? To date, few of these corporations have been specifically named and exposed during the current public debate about the future of Canada’s healthcare system. The time has come to identify these corporate players but to also expose their track records in delivering healthcare services. This is the main purpose of this publication. What follows here is a brief profile of six leading corporate players that are in a pivotal position to take advantage of the privatization of public healthcare in Canada. The final section looks at how international trade deals could lock in this kind of corporate takeover of healthcare for future generations. Tony Clarke,,, Director,,, Polaris Institute page 2 Have you ever wondered how, in a country where we are supposed to have a public healthcare system, we find ourselves having to pay for more and more for medical goods and services? Well, part of the 1. MDS: answer has to do with the fact that private Canadian companies like MDS, with extensive business ties Medicare’s to the U.S., are allowed to sell healthcare goods and services on a for-profit basis in this country. Trojan Horse MDS is already a leading player in Canada’s emerging private healthcare industry. Specializing in the marketing of medical goods and services, MDS has steadily expanded its operations over the past 30 years. Currently, MDS provides services to 17,000 physicians and institutions through 380 locations in seven provinces throughout Canada. Through joint ventures with U.S. healthcare corporations, MDS has played a pivotal role in the piece-by-piece erosion of Canada’s public healthcare system. Here’s how: Privatized Medical Services: MDS operates Canada’s largest network of clinical laboratories and physician services. MDS now controls 55 percent of the distribution of medical supplies in Canada plus 30 percent of the Canadian laboratory market. MDS and three other companies control 90 percent of the Ontario lab industry. In 1997, 40 percent of MDS revenues came from the public purse, mainly through public- private partnerships and direct payments for laboratory work. Private Healthcare Investments: At the same time, MDS operates the MDS Capital Corporation which combines seven capital funds for strategic investments in more than 120 “We see the United States...as a lead- for-profit healthcare companies. MDS also manages the Canadian Medical Discoveries Fund, ing indicator of changes to healthcare disbursing government funds to numerous companies, including MDS subsidiaries. Through in Canada” these strategic investments, MDS has secured a --- Robert Brecken, MDS Vice stranglehold on much of Canada’s health sector and its President future direction. Links to the Labs Political Power & Influence: MDS’s political connections Other Laboratory Services and lobbying have had a direct influence in shaping healthcare policy making in Canada. In Alberta, for example, MDS owns 37 percent of the Health Resources Privateers include: Group, the major pusher for private hospitals in that province, while MDS board member, John Evans, is Gamma-Dynacare actively involved in the Alberta Premier’s Advisory Council on Health. Website: www.dynacare.com MDS vice president of corporate affairs and government relations, Brian Harling, is the chair of the Canadian Medical Labs federal government’s advisory group on healthcare and international trade. In the 2000 federal election, Website: www.cmlhealthcare.com MDS contributed $12,537 to the Liberal party, $11,950 to the Canadian Alliance, and another $11,700 to the Alberta Conservative party [1994-99]. These widely distributed contributions expose the extent ParaMed Home Health to which Canadian politicians are tied to healthcare corporation interests and help explain why politicians Website: www.para-med.com and governments are increasingly accepting the idea of a further privatized healthcare system. (A division of Extendicare- profiled here on pages 7) U.S. Joint Healthcare Ventures: In addition, MDS has developed an extensive network of joint ventures with hospital and laboratory companies in the U.S. For instance, MDS has a partnership with the world’s largest for-profit hospital chain, Columbia/HCA, to install their auto lab system in U.S. hospitals. In partnership with Duke University, MDS manages the clinical laboratories in the university hospital and health system. Says MDS vice president, Robert Brecken: “…working within the United States provides us with the experience and knowledge of new directions we can carry into Canada.” Drinking Water Scare. It was MDS who was at the heart of the June 2002 drinking water scare where 67 South Western Ontario communities were left with untested water because, in the words of the assistant deputy minister of the environment, “[MDS Laboratories had failed to tell communities] when indications of adverse water quality were observed.” To add to the outrage, it has recently been reported that Paul Rhodes, who was once a communications director to Mike Harris, was paid $240,000 to provide public relations advice on how to best handle the Walkerton water disaster. He was also on contract with MDS at the time. Is this the type of company we want involved in our health system? NOTE: This PDF version of “Waiting in the Wings!” is adapted from a popular education booklet format, and as such, sources are not included. Specific source inquiries should be directed to [email protected] or to the Polaris Institute directly (contact information is on the last page). Inquiries about obtaining the original page 3 booklet version of this document should also be directed at the Polaris Institute. Have you ever wondered what our healthcare system would be like in Canada if our hospitals were run 2. HCA: on a for-profit basis by corporations based in the U.S.? A May 2002 report from the Canadian Medical Association Journal concluded that you are “more likely to die in a private hospital” and that establishing Private private, for-profit hospitals in Canada would be a “mistake that would lead to thousands of deaths.” Yet, despite this damning conclusion, the push for private hospitals continues.

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