The cost of private driven care

When people hear the phrase “private health care”, they most often think of the kind of privately financed health care that exists in the United States, where patients are commonly forced to pay for health care with a credit card or private insurance plan. Canadians experience this form of private care when paying for prescription medication, physiotherapy, or mental health care. 

But another, more subtle form of privatized health care is more common in Canada: publicly funded and privately delivered care and services. 

“The cost of profit-driven care” panel explored the rise of corporate profits as seen in the predominantly private pharmaceutical market, the publicly contracted private long-term care sector, and in primary care. Each of these sectors are strong cautionary tales of what we risk when profit-driven health care is involved.

Big Pharma: private health care spirals out of control 

Nikolas Barry-Shaw, who is the trade and privatization campaigner for the Council of Canadians, shared powerful examples of the lack of equitable access to health that exists due to the lack of a universal public drug insurance plan. From people making choices between groceries and filling prescriptions to drugs that can cost up to $100,000 per year, medications are becoming less and less affordable. 

The root of this unaffordability can be traced to the power of the pharmaceutical lobby, which benefits from a fragmented and highly privatized sector that leaves buyers with no bargaining power. Barry-Shaw spoke of the opportunity for the Federal government to legislate a framework for a universal public pharmacare plan and shared stories of how people across the country are meeting with their MPs to demand change. 

Canada is the only country in the world with a universal health insurance program that does not include prescription medication. While expanding Medicare to include pharmacare was part of the initial vision for Canadian health care, failure to do so has led to a powerful profit-driven private industry that undermines our public health care system. Examining our pharmaceutical sector provides a clear cautionary tale against allowing profit-driven corporations to set the terms in health care. 

Long-term care: publicly funded private profits

Profit-extraction is a priority of corporate providers even when the care they provide is contracted by and paid for by the government. Leslie Gaudette, President of the Council of Senior Citizens Organizations of BC, described how this has been the trend in the contracted private long-term care sector in BC. 

Gaudette shared the results of a recent report by the BC Seniors Advocate, Isobel Mackenzie. The Billions More Reasons to Care report looked at revenue and expenditure reporting by contracted long-term care operators and found that for-profit operators increased their profits by 113% over five years, while under-delivering over half a million of direct care hours they were publicly funded to provide. 

Gaudette dug a bit deeper into the ways that public taxpayer dollars are subsidizing corporate profits. Looking at the public payments private operators receive for building costs, she explained that the province is paying for buildings that ultimately belong to the private partner. She contrasted this with the way road infrastructure functions. While private contractors may be hired to build roads, the infrastructure ultimately belongs to the province. So why do long-term care facilities that are paid for by the province become real estate assets for investor-driven companies? 

These are the kinds of extra costs to the public that come with contracting out care to profit-driven companies. 

Primary care: the rise of corporate providers

Dr. Lindsay Hedden, Assistant Professor of Health Services Research in the Faculty of Health Sciences at Simon Fraser University, has been researching the rise of investor-owned, for-profit corporate delivery of primary care in Canada as well as its implications for our public health care system. 

Large investor-driven companies such as Telus Health, Walmart (Jack Nathan clinics), and Loblaw (Primacy Management), among other large private and publicly traded corporations, have acquired a growing number of primary care clinics and virtual care platforms. According to Dr. Hedden, these companies are quickly becoming more entrenched in our health care system, making themselves indispensable, and developing formal partnerships with provincial governments. 

Dr. Hedden unpacked some of the major implications that come with this shift to corporate delivery of primary care. First, profit-driven companies tend to push the legal boundaries of what’s permitted under provincial and national health legislation to extract profit from either patients or the public purse. This was the case with the Telus Health LifePlus plan. A 2023 audit by B.C.’s Medical Services Commission found that Telus was charging patients in the plan a subscription fee for services covered under MSP such as access to a family doctor. While this tendency can be monitored and regulated, this additional layer of public accountability is a significant burden to the public system and it’s important to consider whether our public institutions are equipped to adequately monitor corporate behaviour on an ongoing basis. 

According to Dr. Hedden, corporations delivering health care also tend to maximize profits through increasing patient volume with an overuse of profitable services that have low value for care. For example, episodic virtual care is a big draw for corporations as a high volume of patients can be seen but they often end up referred to emergency rooms, adding extra visits and costs to a patients’ journey. Corporate employers may also influence physicians to encourage them to upsell private pay services that have little clinical value. 

These changes are happening rapidly and for the most part flying under the radar. Most Canadians don’t understand the large structural transformation that is happening and its implications for health care. Dr. Hedden’s fear is that once the impacts become clear, we won’t be able to put the toothpaste back in the tube.