ACCOZZAGLIA

Worthwhile? Why not DONATE?

Prepared 5 December 2005 for Prof. Emily Gilbert (UNI220Y1Y, University of Toronto).

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On June 9, 2005, the Supreme Court of Canada issued the Chaouilli opinion, rocking the debate on national health policy: private insurers may provide coverage for the same medically necessary “core” services offered by Medicare (Bueckert, 2005, ¶5). While this ruling only applied to Québec law, the momentum for privatization — inspired by American private health care and favoured by Canadian neoliberal proponents — foisted new burden atop an impending avalanche, one promising to contort the very landscape of a Canadian institution. Should the ruling cascade to other provinces and territories, then a cornerstone of what many Canadians regard as a mark of distinction from its neighbour to the south would be relegated to historical documentaries, while millions of Canadians may find themselves locked outside guaranteed health insurance.

Unfortunately, such zeal for privatizing is unable to veil the core problems that besiege it. Should abandonment of Medicare ultimately be realized in Parliament or through incremental provincial measures, then a sobering dissection of its American role model must be first examined with forensic detail to identify who best privatizing serves and who most it excludes. Even if an endowed minority of Canadians benefit from this, the privatization of Canada’s public health care system invites a regime whereby individual merit — leveraged by earning power and access to corporate insurance plans — will dictate how and to what extent health care is dispensed. It runs contrary to the merit of retaining residency, which is the criterion for Medicare access. To embrace privatization is comparable to releasing a jar of termites in one’s home: Canadians — buried under medical bills; unable to secure jobs with private health insurance benefits, leaving them at risk to illnesses that could have been screened by routine exams; and discovering no relief to long waiting lists for special care covered by private insurance — will ultimately decimate the structural integrity of Canada’s labour force and social fabric. Privatization proponents argue that encouraging people to buy into private health insurance in lieu of Medicare cuts out the need for general practitioners to “gate-keep” for specialists, which could expedite turnaround times for advanced medical services. But to do this, the universal social right to health insurance — enumerated by Medicare in 1968 and reaffirmed by the Canada Health Act (CHA) in 1984 — must be morphed into a commodity directed not by government, but by a volatile market economy. The CHA’s objective is “to promote, protect and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers” (Spenceley, 2005, 465). It is also important to mention that Medicare is not really a system of public health care, but a public health insurance plan (Editorial, 2005, 5).

Browne cites that “in a pure market economy, [healthcare, housing and food] are also commodities . . . but if such goods are commodities and the possibility of acquiring them depends simply on the ability to pay, then they can hardly be described as the objects of universal social rights” (Browne, 2000, 12–13). Ironically, the long waiting lists in Canada’s public health care system is agitated by an American commodity deficit: a shortage of doctors there — due to an incapability by private health care and universities to produce enough doctors to meet that country’s demand — compels facilities to offer extremely high salaries to doctors from Canada and other countries (Editorial, 2005, 5).

Privatization allies cite how Americans “as a whole spend one percent of their income on drugs” (Pipes, 2004, 66), and how the solution to health care in the U.S. could be improved by offering tax credits to individuals and families (ibid., 35). Pipes also argues that of those Americans buying insurance through employers, 22 million of them would lose it if federal tax subsidies paid out to employers were eliminated (ibid., 34). This excludes the 44 million Americans already uninsured. Pipes suggests that reforms would increase affordability, such as implementing a “full tax break to individuals who purchase health insurance” (ibid., 34).

This is flawed rationale. To earn a tax break, one assumes that an individual has the means to buy into private insurance to begin with. For people scraping by on a hand-to-mouth basis, those premiums would undoubtedly crush them. Bluntly put, this option is beyond the reach of too many Canadians. Offering tax credits under a privatized structure suggests that all Canadians have an implicit ability, if not duty, to pay first to access wellness protection. This is impractical, just as it’s impossible for millions of Americans. By using tax credits to nudge Canadians toward buying private insurance, a staggering ratio of poor and marginally secure Canadians would be exposed to lifelong credit damage (or bankruptcy) risk should a medical emergency exceed caps on barebones policy coverage, since anything over the bare minimum policy is overwhelming to many family budgets. Such financial fiascos, once entered, can be inescapable, preventing income from being spent in other sectors of the economy. “In those countries with universal coverage, no one has to think twice about seeking care if they become ill. No one loses his [sic] home. No one goes bankrupt” (Bartlett, Steele, 2004, 7).

Americans actually pay far more than the prices charged at pharmacies, because as taxpayers, they subsidize corporate pharmaceutical research (ibid., 4). Further, they also end up paying 30–60% more than anyone else globally for prescriptions, because pharmaceutical corporations can operate without regulation, allowing them to set and charge their own prices at will (ibid, 36). Meanwhile, the Patented Medicine Prices Review Board, advising Health Canada, regulates costs by purchasing on behalf of the country, resulting in bulk quantity discounts on patented drugs (Patented Medicine, 2005, ¶6). What was intended to foster competitive pricing in the U.S. has instead resulted in name-brand drugs that corner the market over each condition for which their formula is indicated. Without regulation or generic competition, Americans pay for these markedly higher costs.

For those Americans who can afford basic insurance (often teamed with high deductibles and premiums), one’s motivation to seek medical attention at first sign of trouble is often dismissed out of fear that amassing indeterminate costs could financially crush them, such as it has for many of the 1.5 million American families who filed for bankruptcy protection in 2004 (Leland, 2005, ¶9). And indigent Americans may avoid seeking services altogether until complications force a visit to overcrowded emergency rooms. Some may find relief in overburdened public clinics, but rural poor, out of reach to most services, can end up suffering badly. In the end, few can afford to healthy for long in the absence of preventative, accessible care; inevitably, everyone gets sick.

Postponing medical attention until after a time bomb detonates (such as cancer) balloons the cost to operate, medicate and prolong quality of life. Ultimately, these expenses fall upon unintended parties in private, for-profit health care: families and governments.

Privatization, incidentally, is what pharmaceuticals and for-profit hospitals are seeking, since their bottom-line depends on consumer reliance to services as demand-driven products — like an Apple iPod — not as a needs-based essential (Bartlett, Steele, 2004, 208). “Health . . . has no ‘real’ price in terms of supply and demand patterns associated with typical consumer goods . . . putting enormous pressure on state treasuries even in heavily regulated health care systems and opening avenues for lucrative private-sector alternatives” (Maioni, 2003, 141).

On the other hand, preventative care is, relatively speaking, cheap, but for-profit providers and pharmaceuticals want to discourage it. Curing disease is profitable, while there is no profit to be made in prevention; market-driven health care is entirely focused on curative medicine, not preventative care (Browne, 2000, 11). Releasing that grip — once a free-market system is entrenched and unrestrained by regulation — is hardly in the best interest of their shareholders. The CHA has, by and large, shielded against these interests from doing the same here.

A Canadian who has enjoyed regular examinations under Medicare may, in a privatized model, reconsider scheduling such visits, especially if the costs become unpredictable or too costly. The conversion from Medicare to private insurance shifts burdens for coverage from the government to the individual (or head of household). Medicare “redistributes wealth from the wealthy and healthy to the ‘unwealthy’ and unhealthy” (Browne, 2000, 137). Should a breadwinner be injured, get laid off, or fall ill, then the entire family could be unprotected in Medicare’s absence. “A single-payer system based on [progressive] income tax, such as exists in Ontario, will require the wealth[ier] to pay proportionately more . . . [while] a system based on user charges [is] a very regressive form of taxation” (ibid., 137).

Though some may claim this is rhetoric, it nevertheless leaves many Canadians in a lurch should Medicare be scrapped. Browne notes that “private producers” (e.g., pharmaceuticals) are ardently opposed to single-payer policy, because it discourages user-charge policies (paid by private insurers) that increase the cost of drugs, and thus their margin of profit (ibid, 137). Worsening matters, “hospitals [in the U.S.] charge the highest prices to those who don’t have insurance . . . those least able to pay are charged the most” — sometimes up to seven times higher than insured patients (Bartlett, Steele, 2004, 15). This entire mechanism for privatization would be catastrophic to lower income Canadians.

Assume that someone can enter into employment for a company where private insurance — a non-salaried fringe benefit with full-time career jobs — is covered by one’s employer. Unfortunately, employers are increasingly out-sourcing labour to third-party temp agencies which handle all payroll and personnel affairs. Microsoft, based in Redmond, WA, has offices in nearly every major Canadian city (Microsoft, 2005, ¶3). Since the 1990s, Microsoft have shied from hiring directly or enlisting independent contractors in favour of using at least five payroll agencies which have special (and exclusive) arrangements with the company (Klein, 2000, 251). They handle staffing, “cutting paychecks, withholding income taxes and sometimes providing bare-bones benefits,” the latter at additional cost to the temp worker (ibid., 251). This saves Microsoft from offering to their temps the benefits package afforded to dwindling numbers of permanent employees. Consequently, these uninsured temps are staying longer for each non-permanent assignment (ibid., 248).

Temps at Microsoft tend to fare better generally than non-tech, blue-and pink-collar temps. In 1997, “52 percent of [American] women in non-standard work arrangements are being paid poverty-level wages — compared with only 27.6 percent in the full-time female worker population” (ibid, 254–255). While the U.S. demarcates a poverty line index in its analyses, it is reasonable to suggest that similar ratios of women in Canada are adversely affected. For particularly poorer rural and Aboriginal regions, this ratio is all but certainly starker.

Women in low-wage jobs, in the absence of Medicare, may be unable to afford private insurance when employers decline to offer it as a benefit. And when the cost to self-insure is disproportionately higher than pooled insurance plans purchased by major employers at per-unit discounts, then an entire generation of children being raised by single mothers are put at risk to paediatric illnesses that are left undiagnosed and untreated. This in turn weakens the foundation of health for an entire generation of the Canadian populace.

So, if privatization ultimately replaces Medicare, and it fails, can Canada reverse course? It’s highly unlikely. “This is a one-way street . . . practically and financially impossible to reverse direction once one starts down this road” (Bueckert, 2005, ¶8). Once for-profit hospitals and clinics encroach upon the core services market, they will have a legal basis for grievance if they are suddenly told their ability to conduct business for profit is no longer allowed — especially those corporations from the U.S. who arrive under NAFTA rules. Under Chapter 11 of NAFTA, a U.S. hospital corporation could sue the Canadian government if it reneged on and pushed for public hospitals to supersede private installations (NAFTA, 1994, 11). Based on NAFTA history, that U.S. complainant would have a strong basis to win in court.

The future appears to be a compromise. While the danger of Medicare collapsing upon itself is a red herring, the ratio of privatized services already emerged in Canada renders an all-public infrastructure impossible to reclaim. Increasingly, the future may lie in a European-style, parallel-tier system, where those willing and able to opt out of Medicare can buy private coverage exclusively for use in private clinics (Necheff, 2005, ¶2; Day, 2005, ¶2). For all others, they would be unaffected, though wait times might actually decrease in public hospitals (Day, 2005, ¶11). Those able to take the private plunge may discover that leaving Medicare may not be the panacea they hoped it to be, as wait times may not be significantly lower. But as a principled choice, they may feel this is worth the compromise.

And if the privately insured Canadian loses employment, should opting back into Medicare be allowed? That’s a tough ethical question. In the spirit of Canadian goodwill, some may advise that one may switch back and forth as it is most convenient for their needs. Alternately, others might argue that “once out [of Medicare for private insurance], forever out” — or at the very least, being forced to wait up to a year or longer after reapplying to Medicare before they can be reintegrated. This would allow the government to first recoup the costs to cover an groundswell of returning participants, such as during a recession. It would pit the newly unemployed in a vulnerable hole, but the policy would also reflect the vote of non-confidence to Medicare to which that individual had elected to make. This would be a punitive measure, but it might also give pause to those now pining to jump the Medicare ship at the illusion of dry land.

With the 2006 election just weeks away, privatization will undoubtedly command front and centre stage — even over softwood lumber trade, Aboriginal public service neglect, the Gomery report, same-sex marriage and domestic security. It will be useful to revisit this matter in earnest once the political kaleidoscope is nudged forward by the Canadian electorate.

References

Bartlett, Donald L. and Steele, James B. 2004. Critical condition: how health care in America became big business — and bad medicine. New York, Toronto: Doubleday.

Browne, Paul Leduc. 2000. Unsafe practices: restructuring and privatization in Ontario health care. Ottawa: Canadian Centre for Policy Alternatives.

Bueckert, Dennis. 2005. Canadians will pay heavily for Supreme Court health decision, conference told [Electronic version]. Canadian Press NewsWire. Sept. 16, 2005. From ProQuest database.

Day, Brian. 2005. The grass is greener [Electronic version]. Medical Post, 41(30), 11.

Editorial. 2005. Canada needs a real public health care system [Electronic version]. Canadian Dimension. Sep/Oct 2005, 39(5), 5. From ProQuest database.

Klein, Naomi. 2000. Threats and temps: from working for nothing to ‘free agent nation’. No logo: taking aim at the brand bullies, (pp. 231–257). Toronto: Alfred A. Knopf.

Leland, John. 2005. When even health insurance is no safeguard [Electronic version]. New York Times. October 23, 2005.

Maioni, Antonia. 1994, August. Divergent pasts, converging futures? The politics of health care reform in Canada and the United States. Canadian-American Public Policy, 18, 1–34. Orono, Maine: Canadian-American Center.

Maioni, Antonia. 2003. Health care and the search for the new liberalism in Canada. In H. Aster & T. Axworthy (Eds.), Searching for the new liberalism, (pp. 135–146). Oakville: Mosaic Press.

Microsoft Canada Fast Facts. 2005. Retrieved November 15, 2005.

Necheff, Julia. 2005. Doctors support parallel private health system at CMA Meeting in Edmonton [Electronic version]. Canadian Press NewsWire. Aug. 17, 2005. ProQuest database.

North American Free Trade Agreement (NAFTA): Chapter 11. 1994. Retrieved November 29, 2005.

Patented Medicine Prices Review Board: Jurisdiction. 2005. Retrieved December 4, 2005.

Pipes, Sally C. 2004. Miracle cure: how to solve America’s health care crisis and why Canada isn’t the answer. San Francisco, Vancouver: Pacific Research Institute & The Fraser Institute.

Spenceley, Shannon M. 2005. Access to health services by Canadians who are chronically ill [Electronic edition]. Western Journal of Nursing Research. June 2005, 27(4), 465–486. Edmonton: Midwest Nursing Research Society.