In health care it is not privatization to fear, it’s profitization

21 Feb 23

This column by Armine Yalnizyan was originally published by the Toronto Star on Thursday February 16, 2023. Armine is a Contributing Columnist to Toronto Star Business featured bi-weekly.

In story after story, the crisis in health care and the shortage of health-care workers begs for more money and action.

The future of health care in this country does not turn, as premiers would have us believe, on a fight for federal dollars. The emerging drama is a fight for profits in the sector and investors are already quietly winning.

Although there is hope new federal funding tabled last week will improve access to critically needed hospital, primary, long-term and home care, it raises new concerns. Premier Doug Ford told reporters the prime minister imposed no restrictions on use of those funds for private delivery of care. For his part, Justin Trudeau pointed to the protection offered by the Canada Health Act’s guarantee of access to publicly paid services.

While paying for care via credit card or health card is an issue, a bigger story is unfolding: the growing for-profit delivery of care and new ownership of those profits — small players like individual doctors versus giant corporations with responsibilities to produce shareholder demands for returns. It’s not about the privatization of care. It’s about its profitization.

Venture capital, private equity and foreign direct investment are exploding in the field of health care. Why? They offer rock-steady returns and growth, paid by taxpayers, for the next few decades due to population aging.

The Canada Health Act does not protect us from this.

We should all read the Canada Health Act. It’s short. It’s clear. It’s founded on strong principles and stipulates that no extra fees be charged for medically necessary care provided by doctors and hospitals.

But it’s no bulwark against the growing incursion of investment capital in health service delivery, expected by market analysts to surge to new levels in 2023. That’s because the only profit it prohibits is in the administration of government insurance plans.

The act also doesn’t cover publicly funded services beyond doctors and hospitals, like ambulatory health care, home care, long-term care, agencies that provide temporary staff, or apps that provide virtual care. Corporate activity has accelerated in all of them.

We are told to welcome, not fear, more for-profit care; that more care, from any source, is the cure for what ails us. This claim is neither new nor true. Decades of evidence, from Canada and abroad, shows this approach wastes money and provides inferior care.

Look at for-profit long-term care homes. Study after study shows for-profit homes have lower staffing, wages, benefits and skill mix, higher staff turnover, and poorer quality of care as evidenced by more pressure ulcers, hospitalizations and deaths. We have similar evidence about stand-alone for-profit clinics that provide dialysis.

Private equity funds behind corporate chains are buying small veterinary, dental and optometry practices. They’re investing in digital health and day-surgery clinics. The chains, not the professionals, decide how to drive profits.

Despite the evidence, Ford has permitted more for-profits in long-term care, home care, acute care, primary care, and child care.

It is not impossible to reverse the corporatization of profits in health care, but trade rules, contracts and other corporate protections can make it difficult and expensive to bring care back into the public system. Recently, the Saskatchewan Health Authority bought five Extendicare homes with gruesome track records during the pandemic, paying $13.1 million just to stop avoidable deaths.

We don’t need an action plan for corporate profit and control, using public money. We need to improve the public system.

How? Innovate within the public sector, with specialized clinics and virtual care. Provide health care workers better pay and more control over their schedules, the exact formula the private sector is using to lure them away. For-profit control fragments services, capturing a fee at every stage. Counter that by better integrating care through digital technologies, national labour force planning and centralized wait-lists.

The bilateral agreement between Ottawa and Queen’s Park must prohibit new public funding from flowing to shareholders.

The corporatization of profits in health care is growing. It won’t be easily removed. Those responsible for our care must do everything possible to stop it spreading.

< >