hiiiiiiiiiiiiiiiiiiiiii

Lecture 13

Good day students we shall look at the privatization of healthcare in Canada my last class we looked at privatisation in EU S well once an oligopoly of big corporations had healthcare in EU S under their control well it was inevitable that the next place they would want to expand into in search of fresh markets and fresh profits was of course Canada but when these US corporations tried to do so they encountered a difficulty they quickly found that most Canadians did not want private healthcare opinion polls through the 1980s and 90s consistently show that 80 to 90% of Canadians were satisfied with Medicare that 80% of Canadians favored a continued or even expanded role for the state in healthcare and that less than 10% of Canadians would prefer a privatized healthcare system the corporations concluded that Canadians have what they call an entitlement mentality which is basically the ridiculously egalitarian idea that Healthcare is a right twitch every Canadian citizen should be entitled not just the rich so the corporations launched a massive advertising campaign to change Canadians minds about Medicare and private healthcare and in this they had the backing of the politicians of the so-called knew right who came to power in the 1980s President Ronald Reagan in EU S Prime Minister Margaret Thatcher in Britain and Brian mulroney's conservative party here in Canada these right wing governments promoted the claim that increases in social program spending on things like health education and welfare will forcing governments deeper and deeper into debt hey Cortana mute that with the economic recession of the late 70s and 80s Western countries could no longer afford to spend so much on welfare state measures as they could during the boom years of the 50s and 60s and so cutbacks had to be made in Canada it was argued that the cost of Medicare in particular was supposedly spiraling out of control and had to be cut back and so in the decade between 1988 and 1998 canada's federal government cut $36.5 billion from the federal health care budget this resulted in the closure of nearly a third of all canada's hospital beds nationwide as well as causing hospital staff reductions closure of outpatient services so cold the listing or removing Medicare coverage from some medical services also growing deductibles especially for drug plans and most famously harped on by the media lengthening waiting lists Canadians were being accustomed to the claim that we just couldn't afford good universal healthcare anymore well the right wing claim that social programs were responsible for growing government deficits was accepted and repeated endlessly by the Canadian media which is also mostly right wing and yet this claim was and is almost entirely untrue in 1990 Statistics Canada released a study the memo to study named after the person who led it and the memo to study look to the increase in government debt between 1975 and 1989 and sure enough government debt had risen significantly but the study concluded that only 6% of this increase in debt could be attributed to higher social program spending the other 94% of the increase in debt was due to growing tax breaks for corporations growing subsidy's for corporations and borrowing from private banks and then allowing them to raise their interest rates both conservatives and liberals steadily dropped the corporate tax rate through the 80s and 90s in 1956 corporate taxes accounted for about half of total government income but thanks to these tax cuts by 1996 corporate taxes only accounted for just over 10% of total government income which is roughly where it still is today this dramatic change in taxation policy this cut in taxes on corporations that is what has left our governments short on money and going into debt it is not the cost of social programs moreover even though we were constantly being told about how cash strapped the government was still the friends continued to give out what were called corporate transfer payments these are basically just plain simple handouts just the government just giving billions of dollars to corporations supposedly in the form of subsidies or incentives but in practice just playing hand outs from 1980 to the present these so called corporate transfer payments or corporate handouts have averaged $23 billion a year or $1500 per taxpayer in other words it's just go every single average person in Canada went to the head of some big corporation said here have said 1500 bucks of my income just be cause this change in taxation policy is why it was argued that in the 80s the right wing transformed the welfare state into what's been called the welfare state welfare for the wealthy because while politicians always of course claim to act for the general public in practice what politicians especially right wing politicians do is to funnel more and more taxpayers dollars to their rich corporate backers and to help those backers further by promoting the privatization the private takeover of government services now once these cutbacks had begun to cripple public health care and standards began to decline the 90s saw the next stage in the corporate propaganda campaign managed to say a barrage of claims was put forward in the media claiming that private healthcare was the cure for the problems of public healthcare and the corporations decided to give their campaign an academic veneer by creating what have been called right wing think tanks such As for example perhaps the most famous the the Fraser institute some of you may have heard of it based in Vancouver in 1990s the Fraser institute put out several so-called studies claiming that Canadian healthcare would be much improved if it had less government involvement and more corporate involvement now this line less government more corporate is the only thing that the Fraser institute ever says in any of its studies regardless of what the topic is because that's the only thing its corporate backers pay it to say Fraser institute is essentially just another form of corporate advertising end the Fraser institute is not alone in the late 90s other think tanks were established elsewhere for example in Quebec there was the institute for research on public policy which put forward the idea of establishing what it called internal markets where governments contracted services to private companies now first this idea did not gain much support but then ha they came up with a catchier name for it they called it P3 which stands for public private partnership and this sounds very fancy but in practice all it simply means is that the government gives a contract to a private corporation to do some particular job now P threes became popular in the late 90s and 2000s but they used declined in the 20 tens as evidence mounted that despite the private sector's claim that they could always do things more cheaply the reality proved to be the P threes were always much more expensive than using the public sector indeed I would argue that what P3 really stands for is prices triple I've already said several times on average private healthcare costs triple what public healthcare does and that doesn't just apply to healthcare since the 1990s Canada has had over 200 P three projects mostly in construction and whether they're building hospitals or schools or roads or whatever it is P threes have been found to cause on average three times as much as if they use the public sector despite this and other problems right wing politicians have continued to support P3 projects for example our own sask party a typical right wing party paid $407 million for a P3 project for private company to build a hospital in north battleford the hospital opened in 2019 and the sask party release an official statement saying that it was quote very pleased unquote with the outcome of the project and yet the following year in 2020 an independent auditor identified over 200 construction deficiencies in the hospital in other words the private company built it doing over 200 things wrong and yet the right wing sask party still thinks they did a great job well I would argue that when it comes to healthcare public private partnership is what in Poland they call fried snowballs in other words it's physical impossibility or a contradiction in terms and that's because the private sector does not want a partnership with the public sector the private sector wants to do the same thing that we've already seen it do in EU S namely it wants to destroy and take over the public sector of healthcare and that's because private corporations always want to expand and increase their profits that's perfectly reasonable that's what every business is in business for but the problem is but if we're looking at Canadian healthcare the only way for the private sector to expand is to take patients away from the public sector private healthcare can only grow in North America by consistently attacking and undermining public healthcare Medicare so when people ask what's wrong with having both private healthcare and public health healthcare well that's what's wrong the private sector will not just live and let live with the public sector the private sector will constantly try to privatize healthcare more and more she's exactly what it is doing that's why allowing private healthcare corporations into north America's public healthcare system was like putting the wolves in with the sheep the wolves in the US at the sheep public health care system very quickly and in Canada the wolves will try to eat the sheep sheep because that is their nature in the US private healthcare corporations gobbled up the public healthcare sector very quickly in Canada they've had to go more slowly but they have made progress and they're certainly not going away provincial governments in Canada have also found other ways to support health care privatization first of all in the early 80s they began to pressure hospitals to adopt outsourcing this began with hiring private companies to provide laundry laundry and catering and I already already by the mid 1980s the majority of these as I called hotel services had been privatized ferdia being this isn't really job for hospitals this is hotel services outsourcing was then however expanded into what was called strategic partnering this involved expanding privatization into most outpatient services so for example we saw the privatization of rehabilitation services diagnostics laboratories services and xrays canada's largest private healthcare company is Toronto based corporation named MDS incorporated MBS was founded in 1969 And it grew quickly by buying up ontario's small independent doctor owned medical labs now these labs performed most of their testing for the government and so they got most of their money from the government but the more MDS gained control over ontario's labs the more it raised its prices so between 1980 and 1990 in just one decade per person lab services in Ontario thanks to MTS more than tripled in price yes folks yet again private sector is triple the cost of the public sector by 1990 Ontario had by far the most expensive lab services in Canada Anne yet despite this MDS has now expanded all across Canada it is now here in Saskatchewan you've probably even seen some of you the MD S logo around town and MDS currently has revenues of over a billion dollars a year and it is still growing knew right wing governments all across Canada provincial governments began to encourage privatisation in the 80s example Manitoba in 1984 Manitoba had just four private healthcare companies ten years later 1994 Manitoba had over 100 private healthcare companies the province however that went further than any other in supporting privatisation was Alberta Alberta supported what were in practice private hospitals now the thing about that is that the Canada Health Act which is still in force outlaws specifically for profit hospitals but the corporations found a loophole to get around that they said that while they were running was not a hospital it's just a big clinic or what they called a surgical centre K hospital totally different thing from a surgical centre so of course the laws that apply to hospitals don't apply to their surgical centres well in 1997 HRG the health resources group opened the HSE the health resource centre in Calgary HSC was in practice canada's first for profit hospital like I said it's just called a surgical centre or health resource centre but it's a hospital and in 2004 premier Ralph klein's Conservative government gave HRG a $6 million contract to perform surgeries even though at that time HRG charged 10% more per procedure then public hospitals did as I say right wingers support privatization even though it costs more what then things really got out of hand in 2010 the Alberta government had to just plain give HRG $2,000,000 just to keep it out of bankruptcy and shortly after that the government went to court to get out of its contract with HRG by 2006 Canada as a whole had 23 private circled surgical centres in other words private hospitals but just like in Alberta other provincial governments after initially supporting these thinking they're going to be cheaper once they found out just how expensive they are those provincial governments have also tried to get out of their contracts with these private companies because there simply too expensive as I said public Healthcare is always cheaper in 2003 however ontario's Conservative government continued the process of nibbling away the edges of public healthcare by signing contracts with canada's first private MRI and CT so called diagnostic units now at first when the liberals were in opposition they were opposed to this and they promised they would cancel these contracts with private companies when they came to power but guess what they lied in fact when the liberals came to apparently expanded these private contracts Anne from Ontario this idea of private MRI diagnostic units have spread across the whole country it came to Saskatchewan in 2016 premier Brad wall's right wing sask party government authorized these private MRI's justifying them with the argument that having private MRI's as well as the existing public mris would naturally reduce wait times there's more everise people commit seem quicker weightless will decline especially since the contract which the says party signed with these companies said that each company has to perform one public MRI for every private MRI that it does all of this seems perfectly reasonable except that it hasn't worked out that way some brief statistics in 2015 the average wait time for an MRI in Saskatchewan was 28 days four years later in 2019 after the introduction of private mris the average wait time for an MRI in Saskatchewan was 80 days similarly between 2015 and 2019 the number of people in Saskatchewan waiting from an MRI rose from about 5000 over 10,000 and in practice the private clinics it has been found perform far fewer public MRI's public and private mris was supposed to be one public for one private practice it's far fewer public private and the government just let's them get away with this moreover Alberta introduced private MRIS similar lines just a few years before Saskatchewan did and it has had very similar results to those in Saskatchewan now how is this possible how is it possible that having more MRI's actually means having long longer wait list I mean that doesn't seem to make sense well it happens for two main reasons firstly becausr these private diagnostic units hire nurses and technicians away from the public sector at a time when there is already a shortage of both this then means that the public sector has labour shortages this slows down work in the public sector and lengthens public sector waitlists but secondly and even more importantly it is because of the power of advertising private companies make more money for more mris they before they get paid per MRI so like any other business they advertise and they promote their services both to doctors and to the general public so having seen the ads more and more people get mris just in case even though they don't really need one that of course increases the wait time for those who really do need one in Saskatchewan in 2016 39,000 patients were referred for MRI's by 2019 it was over 46,000 so this is another example of how introducing private healthcare may seem to just complement or improve or expand on Medicare but in reality it only makes things worse indeed recently the federal government has notified the sask party that these prep private MRIS contravene the Canada Health Act there is probably going to be a legal battle over them in the near future and we shall see how long they continue to be allowed to operate but the privatization of healthcare in Canada has not just been promoted by right wing politicians and healthcare corporations it has also as in EU S been promoted by private insurance companies and just as in EU S private insurance companies first began to expand their presence in health insurance in Canada through workers comp workers compass always been separate from Medicare in Canada but up to the early 90s it was run by workers comp boards these boards were non profit organisations made up of representatives of the employer the employees and the government now these workers come forwards cost about half of what American private workers comp cost and still provided employees with four to five times as many health care benefits as in the US and yet in the 1990s many Canadian employers withdrew from these workers comforts and instead started buying insurance from private insurance companies well these private insurance companies set up the same kind of managed care health system as in EU S namely higher rates lists of doctors and services that workers were restricted to including privatized workers rehabilitation services and so on in addition they introduced so-called flexible benefits plans which in practice means that the standard insurance package only covers minimum services well more thorough health coverage costs much more health care analyst Sherry khodro said that this managed care system focuses on health but on demand management in other words trying to reduce workers demand for health care as much as possible and this is called wrong and I quote the overall intent is to reduce health care utilization not to reduce illness in other words the goal of this system is not to make workers healthy it's to provide them with the minimum possible amount of care so that they can get back to work as quickly as possible similarly in the 1990s some hospitals such as winnipegs seven oaks General Hospital hired US medical management companies to implement managed care principles well they did services were reduced beds were closed and the length of hospital stays was reduced all in the name of cutting costs no the final field of privatization of healthcare in Canada that I want to examine it is a field that has been much in the news lately namely the field of elder care so I'm going to take a brief look at the history of elder care in Canada focusing in particular on Ontario because it has had the most extensive privatization of elder care so first of all in the early 20th century all nursing homes for elder care were privately run but they were run either by charities or nonprofit basis or by small family businesses now this changed greatly in the 1950s and 60s when Medicare was created the government got involved in elder care and nonprofit homes for the aged were set up usually run by municipal governments so we had that distinction nursing homes are private homes for the aged or public also the government passed legislation to regulate private nursing homes such as in particular the 1966 nursing homes banked and this legislation was passed in response to a growing public outcry over the atrocious conditions it had been found to exist in many private nursing homes studies showed that their residents were often overcrowded under fed neglected robbed abused and left with little or no competent medical care turn off bold nursing homes were like this but too many were a 1965 study by the Ontario welfare council found that 165 open terios 425 nursing homes provided substandard care in other words over a third of nursing homes were not doing their job properly in response to as I say studies like this the 1966 nursing homes act was introduced and it had stricter regulations which did improve standards however the act had the unintended consequences of creating another corporate oligopoly beykoz many of the old mom and pop nursing homes simply couldn't afford to maintain the higher standards that the nursing homes backed required so they either declared bankruptcy got taken over or they consolidated into corporate chains by 1974 Ontario had 75 corporate chains of elder care of which the largest was extendicare which in 1980 was renamed crown X by 1989 crown X was the 4th largest nursing home chain in North America owning over 60 nursing homes in Canada and over 150 nursing homes in the US now in the late 70s these Ontario nursing homes got organized They organized themselves into the ONHA the Ontario nursing homes association and the onh 8 has been very successful in getting the Ontario government to support growing privatization of eldercare sunbreeze statistics to back that up between 1973 and 1984 six times as many knew extended care beds were granted by the government to private nursing homes as were granted to public homes for the aged six times as many between 1979 excuse me between 1979 and 1983 the private long term care sector expanded by nearly 40% other public sector only expanded by 5% and in one year 1982 alone private nursing homes were granted licenses for over 8000 new beds this took the private sector from having 47% of total beds to having 54% of total beds in other words from a minority to majority no how did CONHA influence ontario's politicians to expand private eldercare so swiftly and so dramatically well again in two minutes first it has been found that many of the officers of the ONHA consist of former government officials these officials are given high paying jobs in the ONHA both as a reward for the government contracts they gave them while they were government officials and also to maintain connections with the next generation of government officials secondly in addition to high paying jobs there is that form of legalized bribery known as campaign contributions for example in 1982 the single largest corporation excuse me in 1982 the single largest contribution to the election campaign fund of ontario's conservative party was a donation of over $10,000 made by canadiana nursing homes limited just a few months after this contribution was made surprise surprise the PC government authorized thousands more beds for private nursing homes most of them paid for by taxpayers dollars was this a coincidence I think not rather unfortunately this is simply an example of how capitalist democracy works capitalism money talks however in the 1980s public protests began to mount against this growing privatization of eldercare relatives and friends of the elderly organized a number of lobby groups to fight back these organisations generally had long boring but well meaning names such as the concerned friends of Ontario citizens in care facilities in 1982 that organization put out a declaration which stated among other things that most of ontario's private nursing homes were and I quote sterile friendless and lacking humanism warmth where old people sit and rock or stare at the walls the days are regimented they're told when to get up when to lay down and eat when to bathe when to go to the bathroom many are not even dressed and live their lives in bed clothes and slippers if they protested the treatment they are receiving their considered difficult and may be restrained or medicated all of this has contributed to nursing homes being seen by the public as inadequate hopeless places where old people go to die many other community organizations issued similar statements I'm just going to give you a few examples here the advocacy centre for the elderly the Ontario coalition for nursing home care reform and the social planning council of metropolitan Toronto also at that time QP the Canadian union of public employees which represented over 10,000 workers in the field of eldercare issued a report which was very critical of private nursing homes another critical report was put out by the Ontario Liberal Party and the Ontario NDP went even further the NDP called for all private nursing homes to be phased out and this proposal was supported by no less than the Canadian Medical Association in 1984 the Canadian Medical Association put together a task force on eldercare and this task force concluded that and I quote when an institution becomes the only answer for the care of an elderly person it must be one that is run on a principle of loving care not tender loving greed well under this barraged of public protests privatisation of eldercare was slowed down and in 1987 the nursing homes act was amended to force nursing homes to submit financial statements and also to accept what was called a residents Bill of Rights supposedly guaranteeing the rights of nursing home residents power study by Vera tarman concluded that all of these were mostly just what she called symbolic gestures she said that in practice provincial governments accept financial statements which is so general and confused that in practice profit margins are impossible to determine these basically these statements are meaningless also inspections are still cursory yes they happen but the inspector gives him a quick glance says yeah everything looks OK to me and carries on sure there's new regulations but very often sisterman these regulations are simply not enforced and this famous residents Bill of Rights includes termine has made in practice little or no difference to the quality of residents care many private nursing homes continue to provide substandard care and right wing governments continue to turn a blind eye to this unless the general public forces them to do something this does occasionally happen for example in 2004 C TV's W5 news program aired video footage of elders being abused and robbed in two Ontario nursing homes run by central care corporation in response those employees shown on the video were of course fired and the Ontario government said that it would increase the number of unannounced inspections of nursing homes hour in practice such piece meal measures that made very little difference to standards of care in private nursing homes indeed the 2020 covert pandemic once more demonstrated that on average private elder care is of significantly poorer quality than public elder care but also it demonstrated that our public eldercare could also use improvement over 80% of canadas COVID deaths have been in elder care institutions and in Ontario there were four times as many deaths in private nursing homes as they were in public homes for the aged NBC nonprofit homes spend over $9000 per resident per year more than to for profit homes K the non Providence spend more money on their residence as a result only a quarter as many public as private homes NBC had a covert outbreak 3% of public homes only had now break as compared to 12% of private homes now here in Saskatchewan just five of our 152 elder care homes are private but the worst kovid outbreak in any elder care home in Saskatchewan was in the private Parkside facility run by extendicare over 200 people were infected and over 40 people died the situation became so bad that the Saskatchewan health authority had to take over operations of the facility and having done so well they of course examined just how extended care had been running the facility and they found a long list of shortcomings including overcrowding inadequate staffing inadequate sanitation inadequate ventilation inadequate infrastructure including both buildings and furniture in need of repair inadequate use of personal protective equipment like masks and gloves and perhaps worst of all they found that when staff started to feel unwell and exhibited covin symptoms instead of being told to go into quarantine they were harassed to come to work anyway because these places were so short staffed well these problems have led to renewed calls for the banning of all private eldercare elderly people are vulnerable and they need a lot of care which is why they need to be looked after by state run homes which put their well being first not by corporations which always put profits first and that concludes our history of privatisation in Canada next time we'll look at the causes of that privatisation that's it for now bye

Lecture 14

Next it's included our history of privatization so in this class we should be looking at the causes of privatization of healthcare I would argue that our look at the historical record of private healthcare in North America has established certain facts private Healthcare is primarily about making profits not improving health private healthcare provides excellent care for the richest 10% but for the rest of society it means higher prices less access to healthcare fewer services and very often substandard services by every measurable criterion private Healthcare is both less efficient and less humane then public health care and yet as we've seen the private sector has taken over health care in the US and has taken up about 1/3 of healthcare in Canada how is this possible well I would argue that there are five main reasons or causes of privatization in Canada persley money talks we saw when we looked at the privatisation of Ontario nursing homes that politicians could be persuaded to support privatization by being rewarded by corporations with things like well paying corporate jobs campaign contributions and of course plain old fashioned bribery in capitalism both politicians and government contracts can be bought just like everything else the more right wing the political party the closer its ties to big business so in Canada conservative politicians are the most likely to be in some corporations pocket but it can and does happen with all the major parties secondly there's the influence of the US when I say the US I mean both US corporations and the US government which have largely worked together American corporations healthcare corporations wanted to expand into Canada in the 80s but at first they had difficulty in doing so primarily because Canada had laws against both private healthcare and too much foreign ownership including US ownership in Canada but all of this changed in 1989 when Canada and the US signed their first free trade agreement originally the FTA the free trade agreement in 1994 this was renamed as master the North American free trade agreement and came to include Mexico and was renamed again in 2018 as the USMC a EU S Mexico Canada agreement note canada's dropped to 3rd place in North America there now the Canadian public and indeed the North American public has been told that all of these agreements are primarily about so-called free trade free trade means eliminating tariffs on imports on both sides both sides agreed to drop their tariffs as a result this would mean the prices would be lower on both sides of the border people could buy more corporations could sell more that's the idea of free trade and that's fine as far as it goes but in reality free trade is just one small part of what these agreements do I would argue that they shouldn't really be called free trade agreements they should really be called deregulation agreements because in practice that's what they've done they've scrapped most of the regulations that had put limits on what American corporations can do in Canada and what Canadian corporations can do in EU S we saw that U S President Ronald Reagan introduced the policy of deregulation scrapping all the regulations on corporations he introduced this in EU S and then through the FDA he basically exported this policy of deregulation to Canada now the FTA had a major impact on healthcare in Canada primarily because of any kind of free trade or removal of terrorists but because it removed what had been previously a 25% ceiling on foreign ownership in the insurance is in other words before the FDA foreign countries could not own more than 25% of canada's insurance industry by law that was now scrapped basically foreign corporations could buy up as much of Canada as they want well this triggered a wave of cross border takeovers going both ways large American insurance companies like for example Aetna prudential and mutual of Omaha bought up a lot of small Canadian insurance companies while large Canadian insurance companies like great West life assurance did the same in EU S big corporations bought up small businesses as we've seen before this kind of takeover spree inevitably leads to the emergence of a corporate oligopoly where industry is essentially taken over by a small number of large corporations well that's what happened in Canada in the course of the 80s and 90s in Canada in 1995 for example there were over 140 life and health insurance companies with total assets of over $165 billion and revenue of over $45 billion a year but this wealth was very heavily concentrated even though there were over 140 companies the top four companies had nearly half the market and half the money between them the top 10 had about 75% of the market between them and the bottom 84% of companies had less than 1% of the market between the in other words the situation in the insurance industry was that there was a handful of big rich corporations and then dozens and dozens of small family businesses who are just barely getting by and indeed this is not unusual On the contrary this type of corporate oligopoly supplemented by a lot of little small family businesses is the normal situation in every sector of the economy these days not just in Canada but worldwide the problem with this situation of corporate oligopoly is that once handful of corporations control a sector of the economy in practice they stop competing instead they get together their CEO's get together and they make illegal backroom deals they make a deal that they won't compete instead they'll all keep their wages the same as low as possible and then all keep their prices the same as high as possible and there all gradually raised their prices together so nobody's undercutting anyone else there all getting rich because they're all raising their prices together now as I say this is illegal it is cold price fixing or price gouging because the company is gouging the general public even though it's illegal it literally happens every day every sector of our economy as a result of this price fixing by the mid 1990s private insurance premiums all been raised together to where they brought in double what the insurance companies paid out in benefits in other words the insurance companies had raised their profits from around the 10 to 20% margin which is considered normal to a 100% profit margin that's what corporate oligopoly does no deregulation and the FDA not only triggered the emergence of a corporate oligopoly in the insurance industry they also ensured that this oligopoly would cover both Canada and the US a single North American private insurance industry was created by process of cross border integration in other words the Canadian and U S insurance industries became integrated together by the late 90s Canadian insurance corporations were making as much money through their policies in EU S as they were in Canada and so the same few big corporations came to control private insurance in both countries and ultimately whether these corporations are Canadian or American matters very little in practical terms because they all want the same thing they want to do in Canada what they did in EU S namely they want to take over and privatize healthcare insurance and healthcare Medicare in Canada public health insurance is quite literally the heart that pumps money through canada's healthcare system if Medicare were to give way to private health insurance then just as in EU S we would have fully privatized healthcare within just a few years well that is not currently on the agenda it still remains the ultimate goal of every single one of these healthcare corporations Canadian and American and given that these corporations have trillions of dollars in assets this means that public healthcare in Canada is under constant attack by some of the richest and most powerful organisations in the world insurance corporations only the law can put protect public health care the state must protect state run healthcare but free trade stripped away much of that protection open the door to allow private U S healthcare corporations into Canada so that's the second thing the influence of the US thirdly there's the takeover which we saw of healthcare administration by private sector management in the 1980s especially in hospitals these private sector managers have a strong ideological commitment to the private sector they subscribe to the business ideology that profit comes before people and they continued to promote privatization and to believe genuinely believed that the private sector always does things better than the public sector even when the numbers say different it's partly because this belief is reinforced by self interest just as with politicians if a hospital administrator gives a big outsourcing contract to a private company then after a few years he can expect to move onto a high paying job with that company doctors are committed to the health care system for life private managers expect to move into different areas of the economy every few years and most of those are in the private sector so their primary commitment is to the private sector even when they're working in the public sector I have previously compared private corporations to wolves that will each the sheep of the public sector well in that comparison these private sector managers are wolves in sheeps clothing they're working inside the public healthcare system but they're working to undermine it and privatize it the fourth cause of privatization that private healthcare creates problems for public healthcare sometimes it does this deliberately sometimes accidentally but either way it then promptly turns round and claims that these very problems which are created are evidence that public health care isn't working for example the media's biggest complaint about public health care has been that waiting lists have been growing long but one of the main reasons for this is that increasing numbers of public pay patients are getting bumped to the end of the line by higher paying private patient queue jumpers Canadians are increasingly being given a choice wait months or maybe even years for Medicare cover treatment or pay privately and get it done right away but jumping to the head of the queue now this problem only exists because of the private sector broadly the media have complained about the growing cost of Medicare and indeed by the mid 90s healthcare accounted for about a third of most provincial budgets which it still does but the main reason that healthcare has become expensive is the growing bill from the private sector prices rose by far the most in those areas of healthcare that have been privatized such as outsourcing laboratories services rehabilitation Anne pharmaceuticals all have been privatized and all have seen their prices skyrocket another problem arises from the private sector's practice of what's called cherry picking or cream skin that is to say the private sector cherry picks it picks the least sick patience and usually the least sick patients are the high income patients the better your income the higher your the better your health as a general rule so they focus on the least sick high income patience and they go to private clinics private hospitals this leaves the difficult chronic low income long term cases to the public sector well The corporations goal in doing this is to maximize profits obviously if you pick off the least sick patients you can do the least for them and still charge them more and they can pay 'cause they have more money so the goal here the so the goal here the motivation is simply to maximize profits as old as this man too but the unintended side effect of this as I say is that that leaves the sick low income patients to the public sector that puts more pressure on the public sector and it makes the private sector's record look better by comparison look we have clear cured all these people 'cause of course they were the least sick ones to begin with these are all problems but by far the biggest problem which the private sector has created for public health care is the constant pressure that corporations put on the state to implement cutbacks to all social services especially healthcare by the end of the 1960s Medicare had given Canada a publicly funded healthcare system which if it had just received reasonable budgetary increases to allow for inflation and population growth easily be providing excellent and free healthcare to every single Canadian to this day but instead of reasonable budgetary increases the late 70s and 80s so the age of cutbacks no one of these cutbacks was crippling but health care suffered what's been called the death of 1000 cuts and while some of this funding was restored in the late 90s and 2000s to this day Medicare remains chronically underfunded and starved of resources government after government federal and provincial heat telling Canadians that we just can't afford the kind of universal healthcare we used to have back in the 60s and yet this claim simply does not stand up to the figures in the late 60s canada's annual GNP was just under $100 billion afterwards Canada produced $100 billion worth of stuff in every year in the late 60s today canada's GNP is over $2 trillion a year in other words our economy today is more than 20 times as large as it was in the 60s and yet we're being told we could afford Medicare then but we can't afford it now I don't think so Medicare is not underfunded because the government doesn't have any money it is underfunded becausr right wing politicians did liberally underfunded to force Canadians to turn to the private sector without the problems which chronic underfunding has caused two Medicare private healthcare corporations would never even have got their foot in the door in Canada and yet as I said in a vicious circle the private sector creates these problems and then uses those very problems to support calls for still further cutbacks to public health care and the 5th and final cause of privatization is that private corporations have developed a cunning strategy to promote public support they tell lies lines which are of course known as advertising the private sector always claims to do things better cheap more efficiently than the public sector but the numbers say otherwise as I said before non profit Canadian hospitals offer about three times as much care but dollar As for profit U S hospitals similarly nonprofit Canadian workers comp boards offer between 8 and 10 times as many benefits per premium dollar as do private workers comp insurance in the US for profit Healthcare is always more expensive than non profit healthcare essentially by definition because if you are for profit then by definition your prices must include a profit margin if you are non profit then your pro prices do not include a profit margin so by definition the businessman's profit increases the prices as we've seen wherever privatisation has taken place prices have immediately been raised significantly as soon as privatisation happens prices go up sharply private corporations tell many more lies to promote themselves another common lie is the claim that the private sector increases customer choice compared to a government monopoly well as we've seen this is the exact opposite of the truth the reality is that private insurance companies actually greatly restrict customers choice restricting them to select it lists of doctors and services whereas with Medicare you can go to any doctor you wish and it covers much more services not all but more another charge that the private sector often levels at the state is that it is over bureaucracy tized the private sector we're told can provide lower ministrative costs 'cause we don't have all these government bureaucrats but a study in 2003 by Harvard Medical School found that healthcare administrative costs in Canada were $307 US per patient in the US healthcare administrative costs were $1059 US per patient in other words private private sector costs about triple what the public sector costs as usual this study attributed this higher cost in the private sector primarily to two things firstly they said there's a great deal of duplication of records people go to different insurance companies so the same person ends up with records in several different insurance companies and so their records are duplicated which costs more in Canada there is just one central Medicare registry where a person is registered there is no duplication so right there that makes state run system cheaper than a decentralized privately run system but even more importantly private insurance companies have to hire a lot of insurance claim adjusters able to decide whether to look at the fine print of the contract and decide whether they actually have to cover this health care cost or not and alongside those the insurance companies also have to hire a lot of expensive lawyers to fight the endless lawsuits the private healthcare brings with it I would argue that the very fact the private healthcare triggers so many lawsuits from people who are clearly so unhappy with the way they've been treated that they are ready to take the matter to court that this in itself is an indictment of the private system and the final private sector claim I want to examine is the they argue we must choose between equality and efficiency we've been told that well yes the public sector may provide equality but the private sector provides efficiency what not only is the private sector not always more efficient than the public sector but when it comes to healthcare I would argue that efficiency in healthcare must surely be defined as providing the cheapest healthcare to the greatest number of people but if we accept that definition that equality doesn't get in the way of efficiency On the contrary equality is essential to efficiency it is inequality that creates inefficiency on a social scale because inequality skews the distribution of health care resources towards the rich the rich get the best of care but that leaves most of society with inadequate healthcare as in the US equal and universal access to healthcare is I would argue the only way to provide truly efficient healthcare on a national scale and not just for the rich all of these lies told by the private sector are easy to see through if you have the facts but most people do not most people don't take sociology of health courses most people only know what they see in the media and the media are big businesses which generally present the viewpoint of big business our media have a right wing bias which is supported by right wing politicians and right wing business leaders as a result the Canadian media since the 80s has run countless stories criticizing Medicare and promoting private healthcare instead and in the 80s and 90s this propaganda campaign made some headway but fortunately for Canada it has somewhat ground to a halt in the 21st century for one simple reason it has been counteracted by the steady stream of horror stories about private U.S. healthcare which are now coming across the border Canadians visit the US and hear from family friends how the cost of healthcare drove them to declare bankruptcy or they fall ill themselves while in the US and receive strona mickle bills from private healthcare companies either way most Canadians have now become very aware that private healthcare means expensive healthcare and this has renewed most Canadians commitment to Medicare despite its flaws despite its underfunding Medicare has become part of canada's national identity Medicare is I would state quite bluntly one of the things that makes Canada a better country to live in than the US most Canadians are very proud of Medicare thanks includes what I have to say on the causes of privatisation in Canada in the next lecture I will have some conclusions on privatisation that's it for now

Lecture 15

Update students this lecture we shall finish off section two of the course with some conclusions on privatisation now for many years there has been an ongoing debate between right wingers and left wingers concerning the appropriate roles of private capital and the state not just in healthcare but in the economy as a whole the right calls for privatisation the left calls for nationalisation the right says private capital does things better the left says the state does things better no I have been very critical of private healthcare in this course so you may think that in my conclusions I shall just take the leftist position actually I would argue that the very fact that this debate has gone on for so long shows us that neither side is entirely right or entirely wrong now one thing that can be stated with certainty is that capital in the state or if you prefer corporations and governments are the two most central and most powerful institutions in modern society no other social organization comes close to those two in wealth or power and neither of these institutions is perfect both of them have their good points and their bad points this strengths and their weaknesses indeed I would argue that each of them is strong where the other is weak and for this reason I would argue but we should not have to choose between one or the other but instead we should use them together but use them not the way we have been with them competing but rather use them in such a way that they compliment each other each doing what it is best at and I would argue that there is in fact a very simple way to do this it is by following the most basic and most natural division in any economy that between second go to services every economy comes down to providing goods or things or products and providing services in other words doing things for other people I would argue that what history shows is that the private sector is are at prospect lighting goods well the state is better at providing services when it comes to healthcare this means that corporations should provide the cures while the state should provide the care I proposed that capital and the state each have two big pluses two big pluses too big minuses we should not examine these in turn beginning with the pros and cons of private capital in the market first of all where private capital excels above all is in the creation of new technology from the industrial revolution of the 18th century to the present day capitalism has created an explosion of technological innovation such as the world has never seen before the creation by capital of the world market has given businesses the opportunity to make a lot of money very quickly if they can just come up with some new gadget the people will buy so when it comes to the invention of new medical technology I would argue that we should also look primarily to the private sector when it comes to developing new laboratory equipment prostheses pharmaceuticals or new techniques like genetic modification in all of these areas it is the private sector that is mostly led the way and I would argue will continue to lead the way check and where private capital excels is mass production corporations do not just invent new technology they invent technology to make that technology capital invents or returned production goods which manufacture consumption goods and that means that if capital can make one of something then it can make millions of it and capital will find away to make the most goods that it can as quickly cheaply and efficiently as it can so when it comes to supplying our health care system with the physical goods that needs on a mass scale like equipment and drugs it is the private sector that is best equipped to do so the private sector in short should provide our health care system with its cures however alongside these two big pluses the private sector also has two big minus the first is that the natural tendency of private capital and the market is always to increase social inequality money makes money means that overtime the rich get richer and the poor get poorer the market does not operate on the basis of need it operates on the basis of your ability to pay and as we've seen in the US means that overtime more and more resources including healthcare resources go to the rich and less and less go to the rest of society do use an automotive metaphor the rich man drives a brand new Cadillac the working man drives a used Ford and the unemployed man walks in healthcare terms in EU S the rich get the best healthcare in the world the working class get minimal healthcare and millions of poor people get no health care that is the inevitable consequence of koepel privatisation and it is a situation that only the state can prevent from happening in Canada the second big problem I would argue with the private sector is the problem of standardization this is a problem we've already looked at standardization is not a problem as long as you're dealing with machinery with things mass production works because machines can be standardized so if a machine in your factory breaks down you just replace some standardized parts and get back to work but people are not machines we may all be similar but we are not fully identical so when the private sector tries to standardize people this causes problems and private healthcare companies have tried to standardize people and treatment of people because they have a financial incentive to do so private healthcare companies have attempted to introduce factory style standardized identical treatments for all patients with a particular health issue we saw this with both TQM and lean management but the standards which have been introduced are the lowest and therefore the cheapest standards possible all patients get treated to standards which are appropriate to young white male middle class adults with no previous history of serious health problems in other words the healthiest section of the population but unfortunately the majority of society does not fit into this category and so most people require more care sometimes a lot more care for example a surgical procedure which a person in their 20s can recover from in a few days might take a person in their 60s weeks or even months in hospital to recover from people's health depends on a wide variety of factors age gender ethnicity class and so on and so on that is why patience and patient care cannot be standardized On the contrary they must be customized or individualized only state run healthcare can do this because the state doesn't have the financial pressure to increase its profits by standardizing treatments and therefore lowering standards the way private healthcare does so those are the pros and cons of private camp moving on now to the state I want to begin by saying that the state is weak in the two areas where capital is strong best of all the state is weak at developing new technology becausr government bureaucrats don't benefit from doing so On the contrary anything you just makes more work for bureaucrats have to come up with new forms and they get no additional reward for this and this is ultimately why the Soviet Union collapsed because when the state took over the entire economy technological innovation in Russia very soon just ground to a halt Russia found itself falling further and further behind the West in technological terms and therefore also economic and even military terms the West in the late 20th century invented computers the Internet the information economy meanwhile the Soviet state was still trying to restrict the flow of information as much as possible censoring everything it could well the only way for Russia to bridge this growing technology gap stop itself falling further and further behind the West was to switch to a capitalist economy so that's what it did in the 1990s so as I say the historical record shows that the state when it takes over the economy is nowhere near as good developing new technology as private capital needs similarly the Soviet state proved to be very bad at mass production in the Soviet bloc goods of all kinds were always in chronically short supply and when they did arrive they were frequently outdated and generally a very poor quality again history has shown that the state is simply not as good as private capital at manufacturing the goods that society needs including health care codes however things are very different if we look at services first strength of the state I would argue last night in the provision of services capital is better providing products better providing things manufactured items but the state is better at providing people in particular the state is good at providing educated professionals who provide important services now I wanna be clear when it comes to services I am not saying that the state should provide all of society's services on the country I would argue that small scale services are best provided by neither the state nor by big corporations but rather by small private businesses which normally means family businesses I'm talking now about things like hairdressers restaurants garages corner stores small scale services the state should not try to run into prices like that and it is when it comes to the large scale services that society needs close I would argue can only be properly provided by the state only the state can provide essential services on a national scale only the state can provide things like a national army a national police force utilities the transport infrastructure road and rail and for our purposes above all only the state can provide the three pillars of the welfare state health education and welfare only the state can deliver large numbers of highly trained professionals like doctors nurses teachers and profs in nationwide organisations universally available to every citizen only eight nonprofit state organize a function allocate vital resources such as healthcare resources on the basis of need not on the basis of income only state run healthcare could look after the health of society as a whole not just the rich in short the state can provide care not just cures now the distinction between care and cure may seem a bit fuzzy but in practice it's been determined by just one simple thing beds without beds a health care facility is simply a place that dispenses cures to customers whether it's pills or service like massage or something like that but ultimately it's just like a store selling customers of product but once you introduce beds everything changes because with beds a health care facility becomes what sociologists like to call a total institution local institution is an institution that has total control over its inmates or residents and so has to take total responsibility for the well being of its residents no while there is some disagreement over the terms clinic or hospital I would argue that it is beds that Turner clinic into a hospital without beds it's a clinic with beds it's a hospital and as we saw in our history there have been efforts to establish private so-called surgical units in practice hospitals in Canada but they have not been very successful however beds may also be found not just in hospitals or bold surgical centres they may also be found in long term care facilities such as elder care facilities and here as we saw the private sector has made substantial inroads in Canada well elder care I would argue provides us with a model of what canada's healthcare system as a whole would be like if it was privatized another look at Ontario nursing homes revealed some of the problems created by private care abuse neglect theft overcrowded and so on and so on private nursing homes as we saw have had to be forced by a series of laws to provide even minimally adequate care well some of these problems with the private sector can perhaps be illuminated by closer government oversight other problems are just built into private care because the profit motive always gives owners an incentive to raise their profits by cutting costs when you cut costs in nursing homes this means things like allowing buildings to fall into disrepair providing poor quality food providing poor quality care replacing train staff with untrained staff and so on any kind of total institution this kind of cost cutting will inevitably have a negative impact on residents quality of life on the other hand state run homes for the aged which are non profit and therefore free from the constant pressure to make as much money as possible the homes for the ages from the agent have taken a more innovative long-term approach to cutting costs that is to say don't provide less services provide more state run homes for the agent don't try to get as many residents as possible so as to make as much money as possible'cause they're not operating to make a profit instead what these homes for the ages have done is to provide alternatives to institutionalization they do the exact opposite they do things to try to keep elders out all these homes able to continue to live in their own homes add homes for the aged have developed a variety of outreach programs for the elderly which include things like Meals on Wheels providing meals for the elderly so they don't have to cook for themselves which becomes difficult daycare vacation care shopping services transportation services and much of this work is done by community volunteers as unpaid charity work something that nobody does pro corporation and indeed surveys show that most seniors prefer to stay at home live at home if they can with just some help having more of the elderly staying at home takes some of the pressure off for elder care institutions stops them from getting so overcrowded the record concerning the treatment of elders in private and public institutions is I would argue quite clear private nursing homes treat their residents like objects to make money from public homes for the aged treat their residents like people to be careful respected empowered and current buzzword is sorry one second reactivate current goal is to reactivate the elderly the difference between private nursing homes and public homes for the aged shows us I would argue just why there is or should be no room for the profit motive in healthcare select the first strength of the state providing educated trained professionals that can provide essential services the second strength of the state I would argue lies in its ability to stab lish regulations because corporations need to be regulated the profit motive may push corporations to develop knew and better technology but it also pushes them to ignore any collateral damage that they do both to people and to the environment so Linda my causing horrific birth defects was just one example of corporations getting too far ahead of themselves believing a product was safe when it was not work related accidents most of them preventable kill and injure literally millions of workers globally every year industrial pollution poisons the land the water and the air which of course ultimately means that it poisons people too in the field of healthcare pharmaceutical companies these days put out more and more drugs with shorter and shorter periods of testing time leading to more and more harmful long term side effects only the state has the power to force private capital to slow down to put public safety before corporate profits similarly only the state can counteract the private sector's tendency to standardize ation at the lowest possible level only the state can pass laws which forced the private sector put here adequate standards for all only the state can create a public health care system which provides healthcare professionals with the resources and the freedom to customize their care to provide each individual with care based on their needs not their bank account now that is how north american's healthcare system worked when it was first set up both Canada and EU S after the Second World War but as we've seen things changed and I just wanted to give you a little bit more background here with a brief economic history going back to the 1920s and 30s in North America there was very little government regulation of corporations they could do whatever they want the result was the speculation and overreaching which caused the US stock market crash of 1929 which in turn caused the Great Depression of the 1930s well after millions of people were thrown into unemployment poverty politicians learned their lesson they learned corporations could not just be allowed to do whatever they wanted so in the 40s and 50s when western governments were building their welfare states they didn't just create gnu social programs they also created international network of regulations governing trade and governing corporate activity such as those in particular imposed buy gas agreement on trades and tariffs these regulations as I say were brought in in the course of the 40s and 50s underpinned the unprecedented social prosperity of the 1960s with these regulations in place this has been called the age of regulated capitalist 40s fifties and 60s the late 70s saw the rise of the so-called knew right in politics and the early 80s so knew right wing politicians like President Ronald Reagan introduced their policy of deregulation effectively dismantling those regulations that had forced the corporations to share the wealth instead deregulation now allowed these corporations to do whatever they wanted and of course what any corporation wants is to maximize its profits regardless of the social cost deregulation is what allowed the swift privatisation of American healthcare and the partial privatization of Canadian healthcare therefore I would argue deregulation is what needs to be rolled back the state needs to introduce a new era of regulated capitalism capitalism that works for everyone not just for the rich now the private sector of course doesn't like these regulations the private sector always calls these regulations government red tape and is very scornful of them and says well they just get in the way of businesses making profits well yes the regulations do limit corporate profits but they don't do so because governments are interfering busybodies they do so to protect society as a whole from the excesses of private capital that is why I would argue we need a return to the strong government regulations of the 50s and 60s we did it once we can do it again in conclusion I would argue that both corporations and governments have shown that they are much too powerful and can do too much harm for either one of them to be allowed to run society purely on its own terms when the state took over the economy in the Soviet Union it led to a brutal dictatorship but when the corporations took over American healthcare it led to growing inequality illness and human suffering on a mass scale This is why state and capital should serve as check and balance on each other each should rein in the others excesses and they should stimulate each other to provide their best in a word they should compliment each other not compete with each other what our society and our health care system needs is a balance between state and capital not a war between privatization has tipped that balance in favor of capital and we need to restore that balance in order to restore our society to health now after the Second World War left wing politicians like Tommy Douglas spent a generation building the welfare state including Medicare but from the late 70s onwards right wing politicians like Brian mulroney spend the next generation introducing cutbacks to social programs like Medicare and instead promoting privatization well since then in the 21st century the millenial generation a scene and uneasy truce between these two sides in the 21st century in the face of strong opposition from most Canadians most Canadian politicians have backpedaled on their proposals for healthcare privatization and have instead declared their support for the Canada Health Act and Medicare however they have not acted to reduce the private sector as it is grown so far summary statistics in 1975 the private sector got 23% of healthcare expenditure in Canada with the help of right wing politicians this rose steadily for the next 20 years reaching a peak of 32% in 1997 but since then things have stabilized today the private sector's share remains at about 32% in other words we continue to have a health care system that is about 1/3 privatized we continue to have a health care system that is mostly public but that is chronically underfunded by the state this is a situation which cannot continue indefinitely about 90% of the private sector's income goes to about 250 large corporations some of them are Canadian many are American these corporations are literally just waiting to pounce waiting for the first opportunity to kill Medicare in Canada and feed on its carcass these corporations know from their experience in EU S the mirror big profits in private healthcare end when you care for profits as much as these corporations do you find a way to care for profit only the Canadian government with the support of the Canadian people can fight off these corporate wolves and provide a healthcare system that meets the healthcare needs of all Canadians not just the rich Canada needs to show these corporations that we care for our health more than they care for their profits and I believe that in the long term we will Canada built Medicare once and in the future we can and I believe we will rebuild Medicare bigger and better than ever hour just when that will happen well that's something we'll just have to wait and see and that concludes section two of the course on privatization bye