Tag Archives: For-profit delivery of public health care

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.

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Home care reform: how wrong are these incentives?

We probably wouldn’t have believed it had we not received the documents outlining the new plan for specialized home care funding.

It’s staggering in its ability to further complicate administration of home care and create so-called “efficiencies” for which the benefits would neither flow to the patient or the Ministry/LHIN/CCAC to facilitate more care.

Stuck with hundreds of contracts to supply home care and support services, the government has now decided it needs a new funding scheme to add to the long journey the modest health care dollar has to travel before reaching a home care client.

Keep in mind the home care dollar starts in the high altitudes of the Ministry of Health, where each spring it rushes down the slopes to the Local Health Integration Networks, where it pools and gently flows towards the Community Care Access Centres. From there it branches out from the CCACs into hundreds of small tributaries before reaching the home care agency. Sometimes that money is used by the agency to provide direct care by agency employees, other times it continues to trickle down to individuals who are treated as independent contractors. This is a journey that can often take the better part of a year for the home care dollar.

Within that long journey there are many eddies and pools in which this money gets trapped en route to serving the needs of Ontario’s home care patients. It’s one of the reasons why administrative costs for home care are conservatively estimated to be about 30 per cent (as compared to less than 10 per cent for hospitals).

It is at the CCAC level where the real action begins. The CCAC case managers, sometimes called care coordinators, assess clients, assign care services, and follow-up to ensure the client is receiving appropriate care. Often they have to play the role of advocate on behalf of their clients. They also play the role of system navigators and ensure a seamless transition to those in their care. New accountability requirements placed on these case managers have meant they have been able to spend less time face-to-face with patients and more time filling out paperwork. That has meant about $100 million more spent on case management between 2007-08 and 2010-11.

If that wasn’t enough, now the province is actually piloting a new funding and administration model, where much of the coordination presently done by the CCAC case manager is devolved to the private home care agency.

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