Health Care Privatization and the Ontario Election

Doug Allan In the past, capitalists had given many aspects of health care a pass in Canada and Ontario. There was a general preference to leave medicare intact from the lower costs it provided employers, especially in export sectors like auto, that gave Canadian companies a cost advantage. But, with the shifting balance of class power and the turn to an ‘age of austerity’ in the midst of the economic crisis, this has changed. With cuts to public health care set for the post-election period in Ontario whatever the electoral outcome, that balance is poised to change again with further attempts to privatize and marketize the health care system. The 1990s: Origins of Health Care Privatization In the early 1990s, delivery of health care in Ontario by for-profit businesses had been centred in the long term care and ambulance industries. Even hospital support services were mostly publicly delivered. Public insurance sufficed for hospital and physician services. During the hard right government of Conservative Mike Harris, there was a significant development of for-profit long term care facilities. The Harris government also embarked on two other major attempts to privatize health care: [1] the creation of public-private partnership (P3) hospitals where for-profit corporations would finance new hospital facilities and operate the hospital support services, and [2] the establishment of for-profit diagnostic clinics for MRIs and CT scans. Long running community-labour campaigns led by the Ontario Health Coalition helped to delay the expansion of for-profit diagnostic clinics. They also limited the privatization of support services in P3 (public-private partnership) hospitals, even while the private financing for these hospitals continued unabated. As well, with the assistance of a union campaign, for-profit delivery of ambulance services was mostly abolished. The latter was accompanied by a dramatic improvement in the pay and prestige of paramedics, along with the quality of Emergency Medical Services. The Role of International Capital in Health Care Privatization International capital played a major role in the various privatization ventures, with the expertise on privatization of British corporations from the Margaret Thatcher era most evident. Carillion, a British P3 corporation won a major role in the first two projects started by the Harris government, massively expanding its role in Canada. The role of international capital has been a major theme in recent health care privatization initiatives across Canada. In British Columbia, the election of the business government of Gordon Campbell in 2001 led to one of the biggest privatizations in Canadian history. Support work performed by thousands of employees at health care facilities was contracted out. The work went largely to foreign based transnational corporations. Indeed, following complaints about super bug infections, the Vancouver Island Health Authority tried to dump its transnational housekeeping contractor earlier this year, but Compass hung on to its $50-million, five-year deal by buying Marquise Group, the company chosen to take over cleaning at several Island facilities. “It’s always a bit disconcerting when you set a contract with one company and another company buys them,” observed Joe Murphy, vice-president of the health authority’s operations. The consortia for a new, massive P3 hospital in Montreal is entirely foreign: Innisfree, a British based firm which is one of the largest investors in hospitals around the world; Laing O’Rourke Canada Ltd., a British based construction firm; OHL Construction Canada Ltd., a Spanish construction and services groups; and Dalkia, a large French company that provides facilities management services to more than 5,000 hospitals around the world. Dalkia has also recently built a plant in Ontario to sterilize hospital surgical instruments through a subsidiary of one of its subsidiaries. Canadian capital has been forming its own interests in privatization, but these national capitals have historically had less P3 experience than competing foreign corporations in the health care sector. The long term financing aspect of the deals particularly disadvantage Canadian companies, whose relatively smaller size weakens their ability to secure financing at favourable rates. These changes are bringing powerful international capitalist interests to the health care industry in Canada, but also providing a foundation for Canadian capital to grow and develop their own agenda for internationalization. So, for example Bombardier, a relatively large Canadian corporation, lost its position as the favourite for a £1-billion Cross rail train contract when the government moved to fund the deal through a P3. The problem? Bombardier’s German based competitor, Siemens, has better access to financing than Bombardier. “A large company like Siemens will be able to borrow the money to undertake a project of this kind,” Tony Travers, director of the Greater London Group at the London School of Economics, warned. Indeed, Siemens’s superior financial power is thought to have been a factor in their victory over Bombardier for a recent Thameslink deal that caused Bombardier to announce it would lay off 1,400 workers at a British factory. Certainly foreign corporations are often the winners of major health care privatizations so far in Canada: think of Carillion, Compass, Sodexho, and Aramark. Likely, the giant foreign trans-nationals will have a marked ability to push for and capitalize on new major privatization initiatives. A significant point – if the openings for privatization become more widespread. But more P3 activity in Canada will also help some Canadian capitalists in the health care sector gain additional productive capacity and financial expertise and linkages to compete more successfully. The internationalization of capital is a key dynamic to health care sector restructuring and it bears close watching in Canada. Privatization of Clinical Services While in the past, the privatization initiatives had steered to less controversial quarters, the privatization of surgical and diagnostic services has come more to the fore. For example, Sacre-Coeur hospital in Montreal has moved 6,000 surgeries to the private business RocklandMD since 2008. In this case, however, the private surgical clinic is not just performing a few minor surgeries. Instead it is performing breast cancer operations, bariatric surgery, orthopaedic surgery, etc. RocklandMD claims to be able to perform a broad range of day surgeries, “from the simplest to the most complex, in various specialities and within very short times.” In contrast, the Toronto Star has noted that the Quebec Health Insurance Board reprimanded a Rockland MD for charging patients fees for use of medical equipment, facilities and support staff in contravention of the Canada Health Act. This is a new and troubling level of health care privatization in Canada. The thin edge of the wedge is usually to start with support services, minor operations or tests. The corporations are now pushing to go well beyond that. Physicians have been a factor in these developments, with the Ontario Medical Association leading the calls for an expansion of private surgical and diagnostic clinics. The doctors have actually already achieved enormous increases, driving up their OHIP funding since the Liberals got in power by just under $6-billion – an astonishing 87 per cent increase! That one line-item increase alone accounts for a significant portion of the total increase in health care spending in Ontario. But more came through special funding for private clinics, or “Independent Health Facilities.” The Conservatives explicitly called for the expansion of private clinics in the 2007 provincial election, to little electoral avail. The Liberals declined to make such a call and opposed the for-profit CT and MRI clinics established by the Harris government. In fact, the private clinics have seen an 82 per cent increase during the Liberal regime. Outgoing Liberal Health Minister Deb Matthews responded to the latest demands from the doctors for more funding for the private clinics by saying: “We’re not opposed… We support the need to deliver services in the community. That’s why we have a lot more dialysis, for example, out of hospitals. It’s really all about getting the right balance.” As these clinics expand the fragmentation of the health care system grows and the problems of recruitment and retention of professional staff at public facilities increases. Privatized Payments for Health Care With the development of for-profit clinics, we also get a push for new revenue to increase profits. This often means user fees – or what the World Health Organization refers to as by far the major obstacle to progress toward universal coverage. The MRI and CT private clinics established by the Progressive Conservatives were founded on this idea, as are many of the private clinics popping up around the country. Many private clinics are introducing user fees, some quite ingenious to get around legal obstacles (e.g. $100 for a glass of orange juice – I kid you not). As corporations get in on this action, they will likely prove much more formidable backers of this than the physicians alone. Ontario Leads the Way Contrary to pro-privatization myth-makers, Canada is not a backwater of socialized health care akin to Cuba. About 29.8 per cent of Canadian health care expenditure comes from private (rather than public) payments. That’s a lot of user fees for those without private insurance. In fact, Canada rates 18th out of 26 developed countries reported by the Canadian Institute for Health Information (CIHI). Other measures also bear this out. Private health care payments account for 3.1 per cent of the Canadian GDP, tied for the fourth highest percentage of the 26 countries reported by CIHI. In fact, Canadians ma