The Consumers' Association of Canada (Alberta) report by Wendy Armstrong "The Consumer Experience with Cataract Surgery and Private Clinics in Alberta - Canada's Canary in the Mine Shaft" can now be purchased for $15 dollars @
A key aspect of the expenditure reduction strategy adopted by Alberta has been outsourcing and privatizing the delivery of health care services. However, this phenomenon is not new. In fact, Alberta has been shifting the provision of services from public hospitals to the community for the last two decades. In the process, the provision of these services has become increasingly reliant on (and driven by) private business interests. Since the early 1990s, the tendency to "farm out" the provision of health services to private providers in community setting has been facilitated and encouraged by government policy. By significantly reducing the capacity of the public health care system, the government has created an environment in which frustrated regional health authorities, health care providers and patients alike have been looking for alternative means to deliver necessary health care services. This environment has been reinforced by the Regional Health Authorities Act, which specifically allows regions to contract with private providers for the provision of services.
For example, the Calgary Regional Health Authority currently contracts out all eye surgery and many various types of day surgery to private providers. Private corporations, which are often owned in whole or in part by senior managers of the regional health authority, are major beneficiaries of this process. Yet no conflict of interest is perceived by the government. Ironically, many of these services are being provided in facilities that were originally built with public money, but were sold to the private sector at fire sale prices as a result of downsizing. In addition, both Calgary and Edmonton have contracted with large regional monopolies in the private sector for the provision of regional laboratory services.
The commitment of the Alberta government to increased privatization of health care stems from the common assumption that private sector provision of health services results in cost savings, decreased waiting lists and improved quality. Yet, none of these often stated benefits are apparent from the privatization of cataract surgery provision in Alberta. In fact the opposite appears to be true. The best available information indicates that private contractors are more expensive to the plan. In addition, surgeons who also operate in private facilities appear to have longer waiting lists for public facilities than those surgeons who operate only out of public facilities. This suggests that surgeons operating in both the public and the private sector may be artificially inflating their public waiting lists as a means of enticing their patients to receive care in private facilities. Private surgical facilities also offer opportunities for physicians enrolled in the provincial health plan to spend more of their time providing higher paying non-insured services which have uncapped fees. In terms of quality of care, there appears to be no perceived difference in the quality of care received in either public or private facilities based on patient satisfaction.
Another troubling side effect of the current environment is the increased commercialization of the behavior of health service providers. Private sector health providers, contracted by the CRHA to perform necessary eye surgery, have attempted to reap significant profits by selling enhanced service packages to prospective patients. The choice of the enhanced service package is said to involve a less painful and more successful procedure, and most tellingly, will sometimes ensure quicker access to surgery. Patients are left to make these decisions without good information and often under significant duress. The net result is that some surgeons are billing the government the set rate for the procedure and at the same time charging patients directly for enhanced service packages. The cost of the surgery can be lower than the cost of the enhanced service package. In some areas of Alberta which only provide cataract surgery in public facilities, the cost of providing the same enhanced product is substantially lower than when provided in the private sector. This creates differences in the level of coverage of the same insured service around the province. Neither the government, nor the Provincial College of Physicians and Surgeons has taken serious action to prevent this creeping commercialization of professional practice, despite the clear evidence that it is more costly to the public and marketing practices are often questionable.
The current government initiative to introduce legislation to "regulate" the activities of the private sector could remove current restrictions on the scope of activities of private providers. If this occurs, regional health authorities would be able to contract out the provision of almost all surgical services (not just day surgeries) to private providers. The Calgary Regional Health Authority appears to be amenable to this approach to service delivery.
The experience by Alberta consumers, with moving the provision of cataract surgery from public hospitals to private clinics, demonstrates how a significant shift from community controlled institutions and agencies to private, investor-controlled suppliers, results in the loss of price and cost controls possible when health services are publicly financed and delivered through public facilities. The shift of cataract surgery from public delivery to private delivery has resulted in increased prices for consumers and increased administrative overhead and transaction costs for the health care system. The benefit for government has been the ability to shift costs from the provincial health plan to out-of-pocket expenses and private insurance premiums. The provision of cataract surgery provides a telling example of what the current move to privatize significant portions of health service delivery will hold for Albertans and may serve as a bellwether for the rest of Canada.
In summary, the evidence in this report found that increased reliance on private surgical facilities in Alberta to deliver publicly insured cataract surgery has: