Cream skimming by private clinics only makes situation worse for Ontario’s hospitals

There is no question that hospitals are struggling these days. This is the second year of a base funding freeze that effectively translates into a real cut of three per cent or more each year. Many hospitals also have to contend with the impact of a funding formula that appears to reward hospitals in wealthier urban areas and penalize those in regions where the economy is struggling. Now Health Minister Deb Matthews has introduced a new regulation that would effectively allow private for-profit independent health facilities to “cream skim” services from the hospitals. Cream skimming is where for-profit entities are allowed to take over fee-based services hospitals rely upon.

We’ve seen examples of this in the past. When the province ended a 10-year program by a handful of small rural hospitals to do community lab work, every single hospital in the program told the province’s consultants that community lab work helped to make the hospitals labs more efficient and supplied the additional revenue needed to extend hours and purchase new equipment. The province didn’t care that the same consultants told them the private for-profit labs were doing this testing at a considerably higher cost to the provincial budget.

The effect of such cream skimming will only make hospitals less efficient and compound existing financial problems.

Matthews has always insisted the transfer of services from hospital would be to not-for-profit entities, frequently mentioning the Kensington Eye Clinic as her prime example.

However, we have seen repeatedly that this is not the case.

When she talked about ending the relationship with private for-profit OHIP licensed physiotherapy clinics earlier this year, it turned out that under the new model many of the same large for-profit companies that owned these clinics were simply getting the work back, just through the Community Care Access Centres and long term care homes, not the Ministry. That wasn’t the big turn to not-for-profit delivery that was promised.

The next wave of transfers is to a sector that is overwhelmingly for-profit. How can Matthews dare to compare this to the not-for-profit Kensington Eye Clinic when the Auditor General of Ontario noted last year for-profit corporations owned 97 per cent of the 825 independent health facilities in Ontario? Is she really suggesting this new regulation is about the three per cent which are not-for-profit?

Further, there is nothing in the regulation that limits the Local Health Integration Networks to transferring such services only to not-for-profit entities – something she could easily do if that was her true intention.

Deb Matthews told the Canadian Press “if they (patients) don’t need to go to the hospital, if a procedure can be done outside of a hospital, that’s good for patients and its good for the system.”

The question is, why?

As we have demonstrated in the lab case, it doesn’t automatically lead to savings nor does it necessarily make the hospitals any more efficient.

Independent health facilities are largely urban phenomena – we wonder once these services start to transfer how patients in rural and northern areas will fare? Even within these urban areas not all clinics will be as easily accessible by public transit as are the public hospitals. This means more running around for patients, not less.

We have had numerous incidents in this province to indicate that it is not necessarily safer, such as the private endoscopy clinic in Ottawa where equipment was not properly sterilized and the nurse in charge of monitoring vital signs was instead required to advance the scope.

There is no question that the province is gearing up for a massive privatization of hospital services. These private clinics received $408 million in fees paid by the province in 2010-11. Expect that to be much more in the coming years.

In the UK – which appears to be the model for Ontario’s Neo-Liberal politicians – this kind of siphoning of hospital services has already taken place. Not surprisingly the private clinics skim the wealthier, healthier and lighter-care patients, leaving the heavy cases for public hospitals. That doesn’t lead to more efficiency.