Eroding Public Medicare: Lessons and Consequences of For-Profit Health Care Across Canada October 6, 2008 Page 1 of 169 Page 2 of 169 Acknowledgements This report is the result of more than a year’s research and the input of a community of people across Canada. In particular, a warm debt of gratitude is owed to the researchers: Andy Lehrer, Matt Adams, Michael DesRoches and Corvin Russell. A special thanks is also due to Doug Allan and Irene Jansen for their assistance in research. To health policy experts Colleen Fuller, Carol Kushner and Wendy Armstrong for their wisdom and input. To the provincial Health Coalitions from Newfoundland to British Columbia, for their patience and feedback. To Mike McBane of the Canadian Health Coalition who immediately stepped forward to support this project. To Maude Barlow for her inspiring use of language which informed parts of the report. To Steven Barrett, Dr. Danielle Martin, Jackie Smith, Jim McDonald, Dr. Maurice McGregor, Dr. Gordon Guyatt, Dr. Ahmed Bayoumi, Terry Kaufman and Janet Maher for reviewing and providing thoughtful feedback. To Steven Shrybman for his important work on the Canada Health Act and his unfailing dedication the public interest. To the sponsors whose patience, I hope, has been rewarded. To my Board of Directors and particularly our chair Dora Jeffries, whose dedication and support allowed us to take the time to pull together what has turned into a massive project. To Stephanie Levesque in the Ontario Health Coalition office who is the unsung hero of the Ontario Health Coalition office and who holds everything together every day. To the local health coalitions across Ontario who will do their best, I know, to ensure that the information contained in this report will be spread far and wide. And last, but not least, to the volunteers, students and interns in the OHC office who have taken on the load of other projects so we could get this done. Written by: Natalie Mehra Supported by: Alternatives North, BC Health Coalition; Canadian Health Coalition; Council of Canadians; Canadian Doctors for Medicare; Friends of Medicare (Alberta); Health Coalition of Newfoundland and Labrador; Medical Reform Group; New Brunswick Health Coalition; Nova Scotia Citizens’ Health Care Network; Ontario Health Coalition; Prince Edward Island Health Coalition; Saskatchewan Health Coalition Page 3 of 169 Page 4 of 169 Table of Contents Page 7………………………………………Executive Summary 9………………………………………Introduction 13.……………………………………Background 15.……………………………………Scope of Research 17……………….……………………Lessons 19………………………………………Case Study 1. Reversal of Privatization 20……………………………………………...1 a. Ontario’s For-Profit Cancer Treatment Centre 22……………………………………………...1 b. Ontario’s For-Profit MRI/CT Clinics 25………………………………………………1 c. Manitoba’s Pan Am Clinic 26………………………………………………1 d. Manitoba’s Maples Surgical Centre, Private MRI 28……………………………………………....1 e. Alberta’s For-Profit MRI/CT Clinics 31…………………………………….…Case Study 2. For-Profit MRI/CT Clinics 37……………………………………….Case Study 3. Laser Eye Surgery/Cataract Surgery 41……………………………………….Case Study 4. For-Profit Hospitals (Surgical Centres) 47……………………………………….Case Study 5. Boutique Physician Clinics 49……………………………………….Cross-Canada Snapshot 51……………………………………….Violations of the Canada Health Act 89……………………………………….Alberta 99……………………………….………British Columbia 117.…………………………….………Manitoba 123.…………………………….………New Brunswick 127……………………………..………Newfoundland and Labrador 129……………………………..………Northwest Territories 131………………………………..……Nova Scotia 135………………………………..……Nunavut 137…………………..…………..…….Ontario 147…………………..…………..…….Prince Edward Island 149…………………..…………..…….Quebec 165…………………..…………..…….Saskatchewan 167…………………..……………..….Yukon 169……………………………….……Appendix I Page 5 of 169 Page 6 of 169 Executive Summary In researching this report, we set out to find all the for-profit diagnostic, surgical and “boutique” physician clinics across Canada. Our goal was to measure the impact of for-profit privatization. How is it affecting costs and access in the public system? How many clinics are violating the Canada Health Act? Where are they taking their staff from and how is that affecting access to public non-profit services? Our main findings, in brief: 1. Across Canada in total we found 42 for-profit MRI/CT clinics, 72 for-profit surgical hospitals (clinics) and 16 boutique physician clinics. The surgical clinic numbers exclude those that sell only medically unnecessary cosmetic surgery and other such procedures. 2. Among these clinics we found evidence to suspect 89 possible violations of the Canada Health Act in 5 provinces. These include clinics that appear to be selling two-tier health care and extra billing patients for medically-necessary services. 3. We found an increasingly aggressive group of private company owners who are pushing provincial governments to give them publicly-funded contracts to increase their revenues (and profits). 4. A significant number of private clinics are now openly selling two-tier health care for medically-necessary services. In addition, a notable percentage are billing the public plan and charging patients in addition, by co-mingling medically necessary and unnecessary services to sidestep the Canada Health Act. 5. The number and scope of private clinics has been growing since the deep cuts to healthcare transfers and hospitals in the mid 1990s. Their expansion has increased in the last five years. 6. This is a new phenomenon. The first for-profit MRI clinics were opened only ten years ago, and the majority have opened in the last five years. Almost all the for-profit surgical clinics and boutique physician clinics have opened in the last five years. 7. To date, every region of the country has been the target of for-profit clinics’ expansion, except PEI, the Northwest Territories, Yukon and Nunavut. 8. A change in for-profit clinic ownership from small locally-owned companies to chains and U.S.-led multinationals is beginning to take place that holds grave implications. Some of the MRI/CT clinics are chains, some multinational. The first chains and U.S. multinational corporate takeovers of surgical clinics have emerged in the last five years. In the last several years also, at least one country-wide chain is emerging in boutique physician clinics. 9. We found evidence of wait times that are highest in areas with the most privatization as resources – financial and human – are taken out of the public health system. 10. We found a demonstrable reduction in capacity of public non-profit hospitals as a direct result of staff poaching by nearby private clinics. In at least two provinces, hospitals have been forced to reduce or close down public services due to shortages worsened by staff poaching from nearby for-profit clinics. 11. We found that out-of-pocket costs charged by private clinics are beyond the financial reach of most of the population in those provinces. Page 7 of 169 The majority of for-profit clinics are maximizing their profits by charging public plans and charging patients out-of-pocket or through third-party insurance as well. The evidence shows that for-profit delivery erodes the public health system by taking financial and human resources out of the public system and by promoting two-tier health care. In many cases, the drive of clinics to maximize revenues by billing all available sources – governments, patients and third- party insurers – is jeopardizing the equality and fairness of the public system which is supposed to assure equal access to medically-necessary hospital and physician services regardless of wealth. There is little evidence to support the contention that for-profit ownership bears any relation to reducing wait times. In fact, in demonstrable cases, for-profit clinics have forced reductions in local public and non-profit hospitals’ services by taking staff out of local hospitals, worsening shortages in the public health system. Several provinces, including Ontario, Alberta and Manitoba, have in recent years reversed for-profit ownership opting to build capacity in the public health system instead, thereby improving access on an equitable basis. The evidence shows that where the federal and provincial governments have acted to halt violations of the Canada Health Act, they have succeeded. But no province has adequate regulatory and enforcement regimes to stop the extra charges and two-tiering that is threatening equal access to care. And the federal government is not enforcing the Canada Health Act to protect patients from increasingly aggressive attempts to dismantle equal access to health care for all Canadians. Page 8 of 169 Introduction In researching this report, we set out to find all the for-profit diagnostic, surgical and “boutique” physician clinics across Canada, to see how they work and how they are affecting costs and access in the public health system. Concerned about increasing reports of companies selling queue-jumping services without penalty, and inadequate action by federal and provincial governments to uphold the principles of universal publicly-funded health care, we decided to try to measure what is happening “on the ground.” We knew our findings would be subject to intense scrutiny, so we assiduously combed media reports taking only credible sources and phoned the clinics directly to interview staff. Wherever possible we have used the private clinics’ own words – in their advertising, speeches, and our interviews -- to reveal the full picture of the growth of for-profit hospitals and clinics, and their approach to