Ralph Klein should know what Manitobans know about for-profit health care

February 21, 2001

Ralph Klein recently announced the creation of what he calls "truth squads" to spread the gospel of health care privatization in Alberta. Unfortunately for Klein, Manitoba's experience provides plenty of evidence that the truth about privatizing health care may be Klein's greatest enemy.

Throughout the 1990s, Manitoba's provincial government, under Gary Filmon, was just as committed as Klein is to privatizing health care. It launched a series of projects that turned control of portions of the province's health care system over to private or for-profit corporations. In every case, the result was a fiasco.

When the Filmon government took office, Manitoba's home care program was a model of cost efficiency and quality care. The government decided to fix this. For no reason other than an ideological commitment to turning public services over to the market, in 1996 the government announced a reckless plan to contract out one quarter of Winnipeg's personal care workforce. "Reckless" because the only way private, for-profit companies can provide such important health care services at lower cost is by cutting wages and undermining working conditions and the quality of care.

In the face of massive public opposition, including a remarkable and widely-supported strike by Manitoba's community care workers, the government backed down. But not for long.

Within months, they had contracted out a portion of home care services in Manitoba to the Olsten Corporation, a US-based multinational that had a trail of lawsuits and fraud investigations behind it in the United States. When the tawdry truth about Olsten was revealed, along with the fact that privatization was actually saving no money, the government abandoned this ill-conceived idea, leaving Olsten to close up shop and slink out of Manitoba.

Undaunted, the government hatched its infamous plan to privatize hospital food services. Under this scheme, a private corporation was made responsible for overseeing the preparation of food for Winnipeg's hospitals at a central facility. The food would then be frozen, trucked around the city, and "rethermalized" before serving. Manitobans found the plan - and the food - hard to swallow, especially when the frozen hospital food program lost about $3 million in its first year. The corporation's CEO resigned, and the new government had to spend more than $20 million to regain control of the frozen food contract - a long-term reminder of the corporate greed and political irresponsibility that guided Gary Filmon's drive to privatize health care.

And late last year, several months after the Filmon government lost the fall election, it was revealed that their much-vaunted SmartHealth program to computerize health-care information was a flop - a flop that could end up costing the province more than $30 million. SmartHealth, originally a partnership with the Royal Bank (who quickly sold majority control of the company to Ross Perot's Texas-based EDS Corp,) opened the door to American corporations taking more control over public health care. Because SmartHealth was made a sole source supplier to the health department, the government left itself vulnerable to billing for unapproved work - which is exactly what happened.

Three terrible experiments. The Manitoba experience with for-profit health care reveals everything Ralph Klein needs to know.