Private clinics no help to Canada's public health care system

November 1, 2000

The election campaign has re-opened the debate about private clinics. Promoters of these clinics argue they will decrease waiting times and supplement, not undercut, the public system.

Experience and evidence from across Canada and around the world, however, suggests that private clinics increase the cost of health care and waiting times.

Take, for example, King's Health Centre in downtown Toronto. When the clinic opened in 1996, its senior executives claimed that little or no public money would be used to subsidize the deluxe health services provided to affluent Canadians. Then, within weeks of opening, a company spokesman allowed that not only were King's physicians billing Ontario's public health plan, but the clinic was taking 40 percent of those billings "to start the engine of the King's Health Centre and get that critical mass in terms of revenue." In truth then, the new private clinic has not supplemented the public system. Rather, the public is subsidizing the clinic.

In October, Ron Koval, chair and co-founder of the health centre, was being sought for defrauding King's investors of millions of dollars. Not all private clinics are tainted with this kind of scandal, but King's reminds us of the potential dangers and costs of turning to the private market. In the U.S., federal authorities estimate the annual cost of health care fraud to be approximately US$100 billion.

Private health care will not save the public money. Rather, it will drive up health care costs. According to the prestigious New England Journal of Medicine, "For decades, studies have shown that for-profit hospitals are 3-11 percent more expensive than not-for-profit hospitals; no peer reviewed study has found that for-profit hospitals are less expensive." Similar studies have come to similar conclusions regarding for-profit home care.

Experience also shows that private clinics do not reduce waiting times.

A study of waiting times for cataract surgery by the Consumers Association of Canada, for example, found that Alberta patients whose eye doctors practice in both public hospitals and private clinics faced the longest waiting times. The study looked at Calgary, where all cataract surgery is done in private clinics, Edmonton, which has a mix of public and private, and Lethbridge, where all cataract surgery is done in the city's public hospital. The results showed that cataract patients in Calgary had the longest waiting times and paid the highest fees for surgery. Patients in Lethbridge paid nothing for the surgery, and waited the shortest length of time, while Edmonton fell in between the two.

In Vancouver, some patients whose orthopedic surgeons work in both public hospitals and private clinics are waiting between 50 and 55 weeks for surgery. This may explain why they are willing to pay up to $2,400 to move up the line, but if they switched doctors they might find their waiting times drastically reduced, and their wallets a little better off as well.

Missing from the debate thus far is a reminder of why universal access is so important to a vibrant public system. First, private clinics serve only those able to pay, and thus erode equity. Second, universality eliminates class differences. Our public heath care system is cherished by virtually everyone, because currently all taxpayers benefit from it and have a stake in it. When those who can do so turn elsewhere, support and funding for our public system wanes, and waiting lists grow.

This has been the experience in numerous countries with parallel public and private systems, such as Britain, Australia and New Zealand. In Britain's two-tier model, professionals and funding are sucked from the public to the private system, leaving the public system a shell of what it once was.

In Australia this phenomenon has increased waiting lists at the public hospitals, and public money has not been saved, as private facilities have required billions in public subsidies to stay afloat.

When equity is eroded it is the middle class who pay the highest costs, while the poor get charity health care if they pass a means test.

The solution to lengthy wait times is not two tiers and private clinics. Rather, it is for our governments to end user fees, and return Medicare to a universal 50/50 federal-provincial cost shared program.