April 2008: Lies the Media Tell us

Our media push relentlessly for privatized health care
April 1, 2008

So-called “studies” by right-wing think-tanks have long provided “evidence” for the corporate media to bash “big government” and extol the virtues of the private corporations which, coincidentally, fund these think-tanks.

The mainstream media treat these studies like gospel, and why not? The findings are “common sense.”

Take, for example, a recent study on health care by the Frontier Centre of Winnipeg. It introduces a few new twists on a tired and discredited theme: private is better than public.

The twists are necessary, as a quandary has developed. It’s become increasingly difficult for free market think-tanks and corporate media in Canada to directly and openly espouse private medicine as practised in the United States. Word has gotten out, via Michael Moore’s Sicko and the World Health Organization data and others, that the U.S. system seriously sucks.

So how do you promote private medicine, when it costs the most and provides the least? Well, judging from a recent study and the reporting on it, you use the magician’s sleight-of-hand to substitute Europe for the U.S., and hope nobody notices the very public nature of European health care.

A bit amateurish, perhaps, but desperate times call for deceitful measures.

To begin with, the Frontier Centre report released in January admits that, while all of the European countries included in the study were given a chance to provide “more recent data” and/or “higher quality data” than what was in the public domain, Canadian provinces and the federal government were not. This means the comparisons are not equal, and may be misleading.

Additionally, according to WHO data, all of the European countries, like Canada (30%), spend mostly public money on health care. Only the U.S., among industrialized nations, spends more private money (55%) than it does public. The U.K. is only 14% privatized, while Sweden is 15%, France 22%, Germany 23%, and Austria 24%. Almost all European countries’ health systems are even less privatized than Canadian health care. This makes it illogical to argue, as did an editorial in The Windsor Star, that better European performance means “innovative solutions,” such as “private clinics and care,” will improve Canadian health care.

If, indeed, Canadian health care falls short of European standards, it is precisely because of greater privatization here, not less.

The most meaningful comparison for those considering private health care is the U.S. system.

But first, what happened to Canadian health care? The “business liberals” of the Jean Chrétien government and then-Finance Minister Paul Martin cut health and education transfer payments to the provinces from $17.3 billion in 1995 to $12.9 billion in 1996, and then to $10.3 billion in 1997—a 40% cut in two years.

These deliberate and unnecessary actions manufactured a crisis in Canada’s health care system, which used to be among the best health systems in the world. It’s still a very good system, especially compared with its American counterpart, but problems related to MD shortages, and long waits for surgery and emergency room treatment have been greatly exacerbated. And why not? The 1996 cuts alone meant that Quebec, for example, lost $1.1 billion, equivalent to half of its payments for all MDs’ services.

The Canadian single-provider health care system is still demonstrably more cost-effective than its American counterpart. On a per-capita basis, the Canadian system costs 48% less, with 100% coverage. In the U.S., approximately 47 million people, perhaps one in six, are without health care insurance, although Americans pay 91% more for their system.

In Canada, health care spending comprised 10.3% of Gross Domestic Product in 2006. In the U.S., this was about 55% higher, at 16% of GDP. U.S. expenditures are higher, both per capita and as a percentage of GDP, than for any other major industrialized country. Despite this, 16% of Americans, or 47 million, lack health care coverage altogether. This is more than the aggregate population of 24 states, plus Washington D.C. One out of three Americans below age 65—85 million people—lacked private or public health insurance for all or part of 2003-2004. Millions more are underinsured, lacking adequate coverage for medical expenses. As of 2003, Canadian per-capita spending on health care was $2,989, while it was 91% higher for Americans, at $5,711 per capita.

The U.S. does not have guaranteed universal health care. Most Americans have health insurance which is paid for through their employment, or which they purchase directly from private insurers. There are some publicly-funded health care programs for the elderly, disabled, and the poor, and U.S. federal law is supposed to guarantee public access to emergency services regardless of ability to pay. A number of free clinics also provide free or low-cost care for poor, uninsured patients, in non-emergency situations. However, according to Ron Pollack, founding executive director of Families USA, “In 42 states, a childless adult can be literally penniless but not fit a ‘deserving’ category and therefore be ineligible for assistance.”

In the words of Dr. Christopher Murray of the World Health Organization, "Basically, you die earlier and spend more time disabled if you're an American rather than a member of most other advanced countries."

Well, how well are we doing in Canada? What we see from the WHO’s 2006 statistics is that, although Canada had a smaller population and lower GDP, per capita, it leads everywhere else. Life expectancy is three years longer, child mortality is 25% lower, adult mortality is 66% lower for men and 70% lower for women. Health expenditure per capita in Canada is only 52% of what it is in the U.S., and as a percentage of GDP it is only 65% percent of the U.S. proportion in Canada.

In short, using these admittedly broad measures, Canada’s universal health care system still compares quite favourably, despite serious the cutbacks of the last 10 years or so.

But powerful forces in Canada consistently have been pushing hard in the direction of a private health care system similar to that in the U.S. This is ironic, given that opinion polls show Americans are in favour of a single-payer, “Canadian-style” health care system. So, if the Canadian system is better, why is there this push for privatization?

The answer is profits. Although the system of multiple private providers is less efficient and more costly, it is very profitable for the insurers and other corporations involved. Canadian insurance companies want some of these profits, and their chums in government who make the laws want their friends in business to profit greatly, even if it means adopting an inferior system.

In writing this, I don’t have the “smoking gun,” which might consist of an e-mail from Paul Martin to his (and Chrétien’s, Bob Rae’s, and Mulroney’s) mentor at Power Corporation, Paul Desmarais Sr. But, as I pointed out in Democracy’s Oxygen, the family ties are very close, and it doesn’t take a huge stretch of the imagination to think of them sharing thoughts about policy initiatives over dinner. Chrétien’s daughter France is married to Paul Desmarais’s son André; Paul Desmarais Sr. sold Canada Steamship Lines for $195 million to his then-employee, Paul Martin, in 1981.

Desmarais also hired Brian Mulroney as a lawyer to help settle a strike at his Montreal newspaper, La Presse, in 1972. Four years later, Desmarais was Mulroney’s biggest backer in the latter’s first bid for the leadership of the Progressive Conservative Party. It was Mulroney who started us down the path of the first Free Trade Agreement, and then Chrétien with NAFTA, and in part these agreements have opened up Canada’s public enterprise to privatization.

As Peter C. Newman has noted, “No businessman in Canadian history has ever had more intimate and more extended influence with Canadian prime ministers than Desmarais.”

Multi-billionaire Desmarais’s group of companies includes Great West Life Assurance Co., Canada Life Assurance Co., London Life Insurance Co., Great-West Lifeco Inc., Great-West Life & Annuity Assurance Co., London Reinsurance Group, and others.

These companies—and Desmarais—stand to benefit enormously from the privatization of medical care and medical insurance in Canada. Indeed, the Power financial subsidiary Great-West Life & Annuity Assurance Co. is already a provider of self-funded employee health plans for businesses in the U.S., with 2 million health plan members and 2005 revenues of $3.3 billion.

Through Gesca Ltee. and Power Communications, Desmarais has also been a significant news media owner over the decades. In the 1990s, he partnered with Conrad Black in controlling the Southam newspaper chain, the largest in the country. Today, Gesca controls seven daily newspapers in Quebec and Ontario.

This media ownership did not harm Desmarais or Black when it came to promoting their shared belief in private enterprise. And it may go some of the way toward explaining the news media’s relentless criticism of public health care, and advocacy of private health care.

(Dr. James Winter is a professor of media studies at the University of Windsor. Parts of this commentary are excerpted from his most recent book, Lies the Media Tell Us [Black Rose Books, Montreal, 2007], which will be reviewed in a future issue of The Monitor.)