Creeping privatization undermines Ontario health care

November 13, 2000

OTTAWA--Ontario's health care system is under threat from creeping privatization and public spending cuts, according to a new study, Unsafe Practices, released today by the Canadian Centre for Policy Alternatives. Costs are being shifted from the public purse to the individual household, and publicly delivered health care services are being reduced, restructured and rationed. Furthermore, hospitals and other institutions are being transformed by private-sector business strategies and management ideologies.

According to the study's author, Paul Leduc Browne, "the consequences of privatization are higher costs, diminished access, less efficiency, lower quality of care, and loss of public control over these vital services."

The study surveys provincial health care policy and spending in Ontario since 1995, looking in turn at hospitals, medical laboratories, ambulance services, long-term care, primary care, and home care. About half of the 175 page report is devoted to a closer study of home care.

"Many people are aware that something is not quite right with the health care system," says Browne, "because they have seen hospitals merge or close, and have read about overcrowded emergency wards. But the source of the crisis is less apparent to them."

Unsafe Practices traces the crisis back to the process of privatization overtaking Ontario health care. Under cover of a rhetoric of "reinventing government," "empowerment," and "community care," government has taken billions of dollars out of Ontario's health care.

Real per capita spending on health care by the provincial government fell from $1,791 in 1994-1995 to $1,682 in 1997-1998. Provincial government estimates show health care spending rising back up to $1,850 in 2000-2001. Even with this increase, however, the cumulative loss in health care spending between 1995 and 2001 is significant: $259 less for each citizen of Ontario. Making up this loss would cost the provincial government $3 billion.

"As a result of these cuts, Ontario's citizens are paying more out of pocket, doing without, or making do with diminished services," says Paul Leduc Browne.

The province has shifted the cost of care to individual citizens in a variety of ways. For example, senior citizens and social assistance recipients have had to make "co-payments" on prescription drugs since 1996. These amounted to $200 million in 1997-1998 and $215 million in 1998-1999 (the latest figures available), or about 15 percent of the cost of prescription drugs.

Privatization has taken place in the delivery of health care services as well. Hospitals have contracted out administrative, laboratory, laundry and food services to for-profit firms. The provincial government has introduced managed competition in home care and ambulance services, throwing the door wide open to new and increased involvement of for-profit businesses. As patients are sent home from hospitals "quicker and sicker," more and more care of the sick is being left to patients' unpaid relatives and neighbours, or is not being done at all.

Fifty per cent of people in need of home care must purchase much of the care they need privately or rely on the unpaid work of family and friends. Unmet needs are greater among women than among men, and greater among senior citizens with lower incomes and less formal education, than among those with higher incomes and more formal education.

Opening the door to a much greater presence of for-profit businesses in home care has had a number of worrying effects: closure of some respected non-profit agencies which had served their communities well for decades, departure of scarce nursing staff to the United States, loos of trust and collaboration between agencies, decline in the continuity of care received by clients, creation of an expensive new bureaucracy required to manage the competitive process, and diversion of marketing and administration of resources that could have been devoted to care.

Furthermore, the provincial government's allocation of home care dollars has been shrouded in secrecy by its decision to disburse most home care monies through the formally independent Community Care Access Centres. "Ontario's Community Care Access Centres are spending over $1.5 billion of our tax dollars," says Paul Leduc Browne. "Yet the provincial government refuses to divulge which agencies receive the money or how much they are getting. The public's right to know has been one of the first casualties of privatization."

Dr. Paul Leduc Browne is Senior Research Fellow at the Canadian Centre for Policy Alternatives. He has written widely on Canadian social policy.