You could call it a healthy disagreement.
Business groups believe that private enterprise should play a greater role in health care – in the provision of core services and auxiliary services such as laundry and payroll.
Supporters of public health care, however, caution that privately provided health care at public cost is not more cost-effective nor more efficient. They say private health care is more expensive in the long run, especially once you factor in the need to make a profit and provide investors with a return on their investment.
“When private diagnostic clinics open up, you’re not increasing the number of radiologists or technicians. All you’re doing is allocating them differently; they are pulled out of the public system,” says provincial Liberal MLA and health critic Kevin Taft. “It makes the public system waiting lists longer.”
The Mazankowski Report, the Alberta government’s own study of health-care reform, recommended among other proposals more delivery of health-care services by private providers and not-for-profit groups.
Since the report was released two years ago, regional health authorities have been increasingly contracting out services.
Calgary Health Region has contracted out its payroll department and such medical services as dental surgery and cataract surgery. Capital Health Authority in Edmonton recently signed a contract with software designer Upside Software to update its contract-management technology, and also has contracts for cataract surgery, plastic surgery and dental surgery.
Alberta Health and Wellness Minister Gary Mar “has been very clear – Alberta has only one health system, a public system,” says department spokesman David Dear.
“That being said, he (Mar) believes the private sector can play a role in supporting publicly funded health care.”
Dear adds that the Alberta Health Care Protection Act allows private surgical facilities to offer insured services but only under contract to the public system.
Such contracts, 29 in total across the province, mainly through the Capital Health Authority and the Calgary Health Region, represent a minuscule amount of the total provincial health budget, he notes – $10.2 million of total provincial health expenditures for 2002-2003 of $6.9 billion, or 0.15 per cent.
Both Don Campbell, vice-president of communications for the Calgary Health Region, and Ed Greenberg of the Capital Health Authority point out that all contracted-out medical services are medically necessary and thus covered by public funding.
When it comes to contracting out, Greenberg says, “Capital Health Authority looks at our partnerships and technical alliances as a way that they can help us do our core business: the delivery of quality health care to our residents.”
Capital Health recently awarded a contract to Upside Software to upgrade how the authority manages its contract system. “We have $200 million to $300 million of supplier contracts for linen, medical/surgical supplies. They’re helping us save money that can be directed back into patient care.”
Campbell says the Calgary region is developing a diagnostic and treatment centre that is being built by a private contractor and will be leased to the health region. “That is a very favorable arrangement for us and allows us to focus on health care and not focus on building a building.”
He adds: “We spend about $2 billion a year. We contract out about $15 million in medical services, not a sizable amount. It allows us to focus on more complex medical cases and helps us cut wait lists.”
Getting a handle on the impact of contracting out on wait lists is difficult.
The province recently set up a registry where people can check out the wait list for common procedures, such as heart surgery and hip replacements, at various hospitals.
But the registry is still too new to be used for comparison purposes, and neither Capital Health nor the Calgary Health Region could provide statistics.
“Calgary’s population has grown by 250,000 people since the Winter Olympics in 1988. It’s kind of difficult to stay on top of wait lists when your population keeps growing,” Campbell says.
Dr. Stephen Miller, medical director of the Health Resource Centre in Calgary, which took over the hospital the province closed, is keen to become involved in the public system. His facility does day surgery for groups not covered under the Canada Health Act, such as workers covered under Workers Compensation, the military and RCMP.
“We’re talking to the (Calgary Health Region),” he says, “and we’re hoping that we will be able to work out some sort of arrangement with them.”
Following the release of the various reports on health care – the Mazankowski report, the federal Romanow Commission report, the Senate’s Kirby report – the Calgary Chamber of Commerce came out with its own recommendations.
It called for the provincial government to make greater use of the private sector in health care and to explore the possibilities of P3s – public-private partnerships.
“We concede that health-care reform takes time,” says Sheri Hofstetter, communications manager for the chamber.
“Yes, we see some warmth from both the (Calgary Health Region) and the provincial government. We would like to see the province move on these a little more quickly.”
Among the chamber’s concerns are issues of workplace health, recognizing that people spend at least eight hours a day at work, as well as the individual’s role in improving and maintaining health.
Another concern is the use of technology and the impact of privacy legislation, aspects of which are still unclear to many businesses.
The Canadian Federation of Independent Business, which represents small and medium-sized businesses across Canada, also believes in a greater role for business in the provision of health care.
Dan Kelly, regional vice-president for CFIB, says the organization surveyed its membership for the Romanow Commission on such issues as whether small businesses had an opportunity to participate in the health-care debate and how satisfied they are with the system.
The survey, he says, found “great support for the private sector to play a greater role in providing health-care services both in terms of the core health-care services and the extended services. Does the laundry have to be done in- house or can it be contracted out?”
Business owners felt that they had been left out of the health-care debate, he adds.
The response to the survey was surprising – 15,000 replies in total. “Obviously, it shows a number of our members have very strong views on health care and really felt quite cut off from the debate.”
The survey also found that Alberta members were generally more satisfied with the health-care system than others across the country, maybe because the province is more committed to using private providers. But Kelly adds: “While Alberta has put in place the legislative framework to allow privately delivered health care, I don’t know that in practical terms there is a great degree of difference at this point.”
Business groups such as the chamber and CFIB believe P3s can help deliver health care. Alberta Health’s Dear points out that P3s are not new.
“They’ve already proven an effective way to finance new long-term care beds,” he says. “Since 1999, nearly 1,800 new long-term care beds have been developed in the province through partnerships between private or voluntary organizations.”
Capital Health has plans to provide 1,100 continuing-care beds throughout the region by 2010, says Greenberg.
The authority provides a portion of the building costs of a private company or non- profit group in exchange for a guarantee that all the beds in the facility will be available to Capital Health patients. The private company or non-profit group must operate the facility according to Capital Health standards.
In Calgary, where the provincial government demolished one hospital and sold another, now hopes to build a new hospital through a public-private partnership, says Campbell.
Calgary’s plans are still in the early stages but will be presented to the provincial government for approval. Capital Health also expects to open up more acute-care hospital beds – 700 by 2010, says Greenberg.
The authority closed no hospitals during the cuts 10 years ago, only mothballed beds and units, so it has the capacity within existing hospitals.
Health critic Taft says experience in other countries including Britain and Australia shows P3s tend to cost more.
“You have to pay the private developer; there’s a string of added expenses; they have higher borrowing costs; the fact that they have to have a return on investment; they have to pay taxes. It’s the most expensive way to build a hospital.”
Wendy Armstrong, a researcher with the Alberta branch of the Consumers Association of Canada, has done considerable research on health care. She sounds a note of caution to private businesses that want to enter such partnerships.
“When they get a contract to provide a service and they expand to cover that contract, they need to think of what they would do if they lose the contract,” she says.
One oxygen supplier told her he didn’t want to be the sole supplier to a hospital, because if he lost the contract to a lower bidder, “there goes my whole business.”
From another perspective, she notes that businesses told the Romanow Commission they had reached the limit of being able to fund extended benefits to cover health-care services, such as physiotherapy, that were being off-loaded by the health-care system.
“It doesn’t hurt the employees,” she said, “because their services are still being covered, but the employers’ costs keep going up and up.”
But people who don’t have extended benefits are having to pay out of their own pocket.
Both Capital Health and the Calgary Health Region have established programs to promote opportunities for business to participate in health care. Capital Health’s BizWorks provides one phone number for companies looking for opportunities to call.
A health innovation office, for example, can work with technology companies to develop innovative ideas.
The Calgary Health Region has similar programs.
