Chief among these are the health care unions, who suspect from Drummond’s musings that the former bank economist will propose sweeping measures designed to make Ontario’s non-profit hospitals operate more like profit-maximizing private corporations.
The unions obviously have a monetary interest in this. Private corporations are under tremendous shareholder pressure to reduce costs by whatever means — including the contracting out of good jobs to cheaper, non-union shops.
But the Ontario Council of Hospital Unions, which bargains for 30,000 hospital, long-term care and ambulance workers, also argues that the kinds of free-market measures Drummond has been hinting at won’t save money for taxpayers.
The union analysis rests to a large extent on research done in the U.S. and Britain, where private corporations are far more involved in the delivery of publicly funded health services than in Canada.
So this week I called one of those experts, physician and public health professor Steffie Woolhandler, to see what she had to say.
Woolhandler, a former Harvard professor who now teaches at the City University of New York, has spent some time researching U.S. Medicare — a program that covers only those 65 and over.
Like Canada’s much more comprehensive health-care system, U.S. Medicare is publicly-funded. Government pays not the whole tab, but most of it.
However, private, profit-making corporations play a far bigger role in delivering these publicly funded health services than they do here.
Here’s what Woolhandler says research by her and others has shown.
First, for-profit hospitals don’t provide higher quality care. In fact, research shows that patients do marginally worse in the average U.S. private hospital.
In for-profit dialysis clinics, one investigation found that patients were 21 per cent more likely to die.
Second, and perhaps more important to Ontario Premier Dalton McGuinty, market reforms to U.S. Medicare haven’t saved money. Perversely, they have cost taxpayers more.
Eight separate empirical studies compared for-profit to non-profit hospitals, Woolhandler says. All showed that for-profit hospitals cost the government treasury more — by about 18 per cent.
“The evidence of higher cost is simply irrefutable,” she says.
Why would this be? Woolhandler’s explanation is that, in the realm of health care, for-profit institutions have an overwhelming incentive to game the system in order to squeeze as much as possible from their public paymaster.
In some cases, they encourage the use of unnecessary tests or services operated by their own subsidiaries. In others, they “upcode” the patients — present them as sicker than they are in order to reap higher payments.
Then there is so-called cherry picking. For-profit hospitals prefer to avoid seriously ill patients since these cost more to treat. Even hospices for the terminally ill are affected. Research shows that many try to fill their beds with dying heart patients in order to avoid end-of-life cancer victims, who require more costly treatment.
From time to time, the U.S. government tries to close these Medicare loopholes. But, says Woolhandler, the corporations just find new ways to game the system (she refers to a 2011 study by the National Bureau of Economic Research that makes just that point).
The lesson for McGuinty? Governments interested in reducing health-care costs shouldn’t rely on free-market reforms to do the trick. Health care isn’t a commodity like, say, soap where the normal laws of supply and demand operate.
It is a human necessity where one side — the provider — has all the information and power, while the other — the patient — is far too often acting out of desperation.
Original Article
Source: Star
Author: Thomas Walkom
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